Let The Truth Be Told
The real culprit in the current financial crisis is the current administration and the previous democratic controlled Pelosi-Reid congress. Americans need to understand (and of course with no support or help from the press) that the current debt ceiling is only a trigger on the proverbial “gun”—the gun has been the enormous spending boom of the last three years under the complete control of Obama-Pelosi-Reid. What makes matters worse is that two of the these three players and the press lack the political will to reduce spending in years to come—and are simply doing everything in their power to focus away from spending and instead muddying the water with tax revenue promotion. What a crock!
Spending is the problem and in the last three years the Obama-Pelosi-Reid regime has had an extraordinary blowout. We have not seen anything like it since WWII. Nothing even close—and no, not even during Bush’s second term. The chart below gives a graphical depiction of what we are talking about—and this should be place on every news wire day after day after day until folks can understand what the real problem is.
This chart clearly tracks federal outlays as a share of Gross Domestic Product since 1960. The early peaks represent the Johnson “Great Society” spending and then the high of 23.5% with the recession of 1982 coincident with Reagan’s defense buildup.
From this point, spending declined mostly during the 90’s when Clinton radically cut back defense spending to 3% of GDP in 2000 from Reagan’s peak of 6.2% in 1986. During George W Bush’s years spending bounced back up to roughly 20% of GDP, but no more than 20.7% as recently as 2008!
Then the Obama “blowout” in concert with his team in Congress—Pelosi-Reid! The Democrats basically blew up the national balance sheet, lifting federal spending to 25% in 2009, the highest level since 1945. Though the supposed recession ended in 2009, spending in 2010 stayed high at nearly 24%, and this year, 2011, it is heading back toward 25%.
Federal debt held by the public as a share of GDP is another interesting perspective. In 2008, it was 40.3%, then 53.5% in 2009, 62.2% in 2010 and an estimated 72% this year, and is expected to continue rising in the future—driven of course by ObamaCare. These are heights not seen since the Korean War, and many analysts think the US debt will soon hit 90% or 100% of GDP—-think Greece boys and girls!
Now, Congress, under the leadership of Pelosi-Reid was responsible for the way so much spending was wasted, resulting in little job creation and the slowest economic recovery since 1930s. In the US system however, historically, President’s are supposed to be the fiscal watchdogs. When they fail to do so, the Congress if allowed spends like they are on steroids! This is exactly what has happened.
Now, what is all ironic about this is that all of a sudden, President Obama has got religion, and is claiming to now have found “fiscal virtue.” In fact, what he is really doing is using the debt-ceiling debate as a battering ram not to control spending but to command a tax increase! Why is the press not demanding specifics from Obama on the spending side of the equation! He has provided nothing—that is fact and what little he has said about cuts in spending are negligible. The only things that I have heard is his offer for immediate domestic nondefense discretionary cuts of $2BB—a drop in the proverbial bucket!
As for Obama’s proposed entitlement cuts—nada! His vague suggestions are nibbling around the edges of programs that are growing faster than inflation—and ObamaCare—is untouchable despite its $1 trillion in additional spending over the next several years and growing faster even afterwards!
So, now the showdown over the debt limit which has to be raised to accommodate all of “his” spending. And Obama of course instead of taking responsibility for the spending and focusing on reducing it is blaming the Republicans for being irresponsible because they won’t raise taxes in return for modest future spending restraints. And people are falling for this BS and the media does not have the guts to speak the truth! What a sad state of affairs!