FROM THE FUTURE ERA OF HONEST AND TRANSPARENT BUDGETING...,
2009-02-26 13:25:04
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this is getting personal...,
2009-02-28 10:14:30
a sustainable apocalypse:
"Current spending trends are absolutely unsustainable," complains the Heritage Foundation, along with, I dunno, everybody and anybody who fashion themselves loyal adherents to fiscal hawkery regardless of their past support for gigantic federal deficits so long as they were created on behalf of their own particular set of policy preferences.
What determines the sustainability of deficit spending is future net interest payments in relation to future growth. According to the White House's rosy scenarios, by 2019 net interest payments will rise from 2008's $250 billion to $622 billion, and GDP rises from $14 trillion to $22 trillion, so the bill goes from 1.7% of GDP to 2.8%. Heritage uses the CBO baseline, which is tinted a bit darker. I have reservations here, because the CBO doesn't project the coming hick apocalypse due to the election of a Democrat, and as that is clearly inevitable we should be skeptical of the reliability of these baseless baselines. Nevertheless, in this allegedly unsustainable and overly optimistic CBO scenario Heritage finds:
As the budget deficit increases over the next decade [nacht, as budget deficits increased over the past decade], so will net interest spending, from $196 billion (1.4 percent of GDP) in 2009 to $761 billion (3.4 percent of GDP) by 2019.
So assuming the country doesn't break apart into enclaves of heavily armed, fratricidal communes, we face the prospect of net interest payments on the order of 2.8 to a backbreaking tsunami of 3.4 percent of our economic activity. While it's true that 3.4 percent is greater than 1.7, it is also just a return to levels of debt service we sustained for the 15 years between 1983 and 1997 - see this convenient historical table of interest payments as a fraction of GDP if you really care. Apparently this is not the return to the Reagan era Heritage wants, but it does seem to be the return to the Reagan era Obama promised.
Even without considering their oblivious encore performance in jacking up our debt burden, conservatives can't seem to put forward a serious argument here. What they need is a realistically millenarian baseline of retarded growth and successive waves of economic disaster: just with the Obama administration's hopeless response to the banking crisis and stunted action on climate change this would be a trivial task for a two year old. Instead we have an opposition party that is incoherent on the one and in denial of the other, and seems to be devolving in front of our very eyes back to a primitive larval stage in which virtually all of the conservative organism's resources are dedicated to spinning magnificent tinfoil cocoons. I guess it'd be kind of heart wrenching if it wasn't so hilarious.
