Under Obama's plan, the federal government will never again see an annual deficit as small as the $458.5 billion of 2008. His smallest annual deficit would be $724 billion in 2014. After that, the annual deficit would head ever higher and never look back, passing the $1 trillion mark again by 2018, and reaching $1.25 trillion by 2020, the last year calculated by the CBO.
As the government borrows more and more under Obama's budget plan, it will need to pay more and more interest to cover its growing debt. Over the next 10 years, according to CBO, the government's annual net interest payments will almost triple as a percent of GDP, climbing from 1.4 percent to 4.1 percent. By 2020, thanks to the Obama budget, the government's annual interest payments will take up a larger share of our national economy (4.1 percent) than the average annual deficits took up (3.4 percent) in the profligate Bush years.
Redistributionist welfare-state programs, primarily Social Security and Medicare, are the main drivers behind accelerating government borrowing and spending. Obama's nonsensical answer to the fiscal problem they pose is to create a new and bigger redistributionist welfare-state program, a national health care system in which the federal government will subsidize health insurance for everyone earning up to 400 percent of the poverty level.
Soon, politicians in Washington will not be able to tax and borrow enough to pay for the entitlement programs they and their predecessors have created without breaking the economy. Or as Rep. Ryan said, "They literally crash the U.S. economy, if these kinds of deficits that he's proposing, persist,"
Today, the welfare state is sustained by what the government can take from your hard-earned paycheck and what it can borrow from willing lenders. Tomorrow, your paycheck will have no more to give, and lenders will no longer be willing.