Praise be to Washington. David Horowitz on the trend.
When Obama took office in 2009 and racked up trillion-dollar deficits, it shocked the nation and spawned the Tea Party movement to push reductions in spending. Thanks to passage of the Budget Control Act under a GOP Congress, deficits declined to roughly $400-$600 billion during Obama’s second term in office.
Fast-forward to the new decade, and despite high revenue and record low unemployment, annual deficits will forever remain above $1 trillion, barring major structural reforms to government, according to the latest budget and economic outlook from the Congressional Budget Office (CBO).
According to the 2020 budget outlook released on Tuesday, the deficit for this year is projected to reach $1.015 trillion. There will be no turning back from there, as deficits are slated to grow every year for the remainder of the 10-year budget window, topping $12.4 trillion of cumulative new deficits by the end of the decade.
Perhaps the most shocking element of this report is the fact that unemployment is so low, yet deficits are as bad as they were during the worst times of the Great Recession. “Not since World War II has the country seen deficits during times of low unemployment that are as large as those that we project — nor, in the past century, has it experienced large deficits for as long as we project,” said CBO Director Phillip L. Swagel in a press conference on Tuesday.
It’s no coincidence that since the debt has exploded over the past generation, we’ve never achieved solid economic growth, despite record low unemployment. Previously, during years in the 1960s, mid-1980s, and late 1990s, periods of low unemployment coincided with years of 4-5% GDP growth. Yet despite the lowest unemployment rate in half a century, the economy is growing right around 2%.
The time for growing our way out of the debt bomb seems to have long passed, as the debt itself is acting as a wet blanket on economic growth and efficient investments, even during a period of job creation.
Then, it’s time to cut the debt bomb loose, before it really explodes and takes the economy with it. But, people who bragged about only having half-trillion-dollar deficits and now own the whole T figures, aren’t going to do that. The price of sorcery is measured in more than just dollars.