“When we say we are going to cut spending, read my lips: We are going to cut spending,” Boehner said. It’s no surprise that political leaders are talking a good game. Americans have finally grasped the rough outlines of their government’s looming fiscal collapse — and are demanding deep cuts in an effort to restore some semblance of sanity to the spending process.Unfortunately, Obama has proposed trimming just $30 billion from a $3.66 trillion budget, while Boehner’s cuts total a mere $61 billion.
You’ve heard the expression “using a bazooka to kill a fly”? Well, these proposals are akin to using a fly swatter to kill a charging rhino.
But glaringly inadequate spending reductions are only the beginning of the problem — far graver dangers lurk within our government’s shoddy accounting and chronic refusal to address the root causes of this impending implosion. Consider these numbers: In 2008, the White House Office of Management and Budget projected a total three-year deficit of $334 billion for fiscal 2009-11.
These projections were made before the onset of the recession, obviously, but a year later — when America’s economic free fall was in full effect — OMB was still projecting ludicrously low deficits. In fact, two years ago OMB projected a total three-year deficit of only $302 billion for fiscal 2010-12.
The actual shortfalls for fiscal 2009 and 2010 ended up being $1.4 trillion and $1.3 trillion, respectively — the largest federal deficits since World War II. And the projected deficits for fiscal 2011 and 2012 are currently estimated at $1.6 trillion and $1.1 trillion.
Yet even these astoundingly high numbers are based on dubious fiscal forecasting. For example, the Congressional Budget Office is projecting that the government will owe $5.5 trillion in interest payments on its ballooning $14.2 trillion debt over the coming decade. But that figure represents the best-case scenario. More realistic forecasts put the 10-year interest tab closer to $7.5 trillion.
Whichever amount you assume, interest payments on the debt will dwarf the $478 billion in cuts that Obama has proposed over the coming decade — as well as the $2.5 trillion in cuts proposed by the Republican Study Committee over the same time period.