You would think that after all the articles, research papers, and government reports that have come out in the past year and a half about our country’s unsustainable fiscal condition, there wouldn’t be a single American who doubts that our major entitlement program need serious reform and that government spending needs to be seriously cut. I mean c’mon hasn’t everyone been reading our blog?!?

Unfortunately, Democrats still haven’t gotten the message.

They haven’t offered a single serious proposal for Social Security reform, even after killing President Bush’s reform proposal during his second term. Senate Majority Leader Harry Reid set the Democrats lackadaisical tone when he said “this is a manufactured crisis.” Going so far as to say, “that the so-called Social Security crisis exists in only one place — the minds of Republicans.”

They haven’t offered a single serious proposal for Medicare and Medicaid reform. Well, unless you consider cutting $400 billion from the program “reform.” Of course all that money and more will be pushed into creating yet another massive entitlement program: Obamacare.

Can you say ‘out of touch?’

Now, the CBO, in their Long-Term Budget Outlook, joins the chorus of economists warning of a upcoming fiscal crisis. This is not the first time they’ve sounded the deficit alert. The CBO’s prior warnings have been drowned out by the roar of the printing presses needed to pump out all the money our government is spending. Peter Orszag, director of the CBO, has to be a little discouraged by his inability to get through to the thick-headed White House (join the millions of voters who tried to sound off on Obamacare). Nevertheless, the CBO presses on, trying to get the attention of Washington to face up to the fiscal problems ahead of us.

The CBO found that:

[I]f current laws do not change, federal spending on major mandatory health care programs will grow from roughly 5 percent of GDP today to about 10 percent in 2035 and will continue to increase thereafter…Under current law, spending on Social Security is also projected to rise over time as a share of GDP…All told, CBO projects, the aging of the population and the rising cost of health care will cause spending on the major mandatory health care programs and Social Security to grow from roughly 10 percent of GDP today to about 16 percent of GDP 25 years from now if current laws are not changed.

By comparison:

[S]pending on all of the federal government’s programs and activities, excluding interest payments on debt, has averaged 18.5 percent of GDP over the past 40 years.

In just a quarter century, federal spending on health care will almost equal our historic spending on every federal program. Unless revenues skyrocket, our government will not be able to afford anything but entitlement programs. Highways crumble. Schools lag. Troops march into battle underequipped.

Even taking into account an expected economic recovery and assuming that all the budget-cutting provisions of Obamacare are actually enacted (ha!), our nation will still face a budget crisis in the immediate future.

The CBO outlined our dire fate in two separate budget predictions, based on slightly different assumptions about government policy.  Even under the most optimistic scenario the CBO predicts:

Federal debt held by the public would grow from an estimated 62 percent of GDP this year to about 80 percent by 2035. Interest payments, which absorb federal resources that could otherwise be used to pay for government services, currently amount to more than 1 percent of GDP; under this scenario, they would rise to 4 percent of GDP (or one sixth of federal revenues) by 2035.

The worst-case (which Washington usually finds a way to make worse) scenario predicts that:

[D]ebt would reach 87 percent of GDP by 2020, CBO projects. After that, the growing imbalance between revenues and noninterest spending, combined with spiraling interest payments, would swiftly push debt to unsustainable levels. Debt as a share of GDP would exceed its historical peak of 109 percent by 2025 and would reach 185 percent in 2035.

Debt held by the public jumps 76% of GDP in 10 years! That doesn’t even include money the government owes itself. Is this to be our future?  A national debt greater than our entire economic output of the nation?  Imagine a year in which every American citizen and business donated the goods and services they created that year to pay off the national debt. Even if that fantasy happened, we’d still have a debt-GDP ratio equal to today’s.

That will be our future if our government doesn’t wake up to our quickly approaching entitlement crisis.

Of course these are not the only two scenarios. In the absence of any Democrat proposals to reform federal entitlements, Republican congressman Rep. Paul Ryan has put forth a “Roadmap for America’s Future,” a bill that, according to the same CBO now making dire predictions, would:

[M]ake the Social Security and Medicare programs permanently solvent [and] lift the growing debt burden on future generations, and hold federal taxes to no higher than 19 percent of GDP

The Roadmap would also give us a budget surplus and eliminate the national debt by 2080.

In its June report, the CBO stated that:

[T]he sooner that long term changes to spending and revenues are agreed on, and the sooner they are carried out once the economic weakness ends, the smaller will be the damage to the economy from growing federal debt.

Republicans are ready to act now.  We have serious, well-thought out plans to reform our entitlement and stave off the crisis the CBO is predicting.  Will the Democrats join us or are they bound and determined to drive our nation’s finances into the ground? What we need is a change in our nation’s leadership.  A change to a government that is willing to take address the real problems facing our nation – unemployment, burdens on business, health care costs, and the unsustainability of our entitlements. These problems will not solve themselves. Worse, they will be accelerated if we maintain the current trajectory of government spending put in place by Democrats. We need a party that recognizes the problem, not ignores it. We need a party with a plan, one that doesn’t involve bigger government. We need a party with a fundamental commitment to fiscal sustainability, not paternalistic government programs.

That will be change we can believe in.

By Brandon Greife and Avi Snyder of the College Republican National Committee

http://speakout.crnc.org/blog/2010/07/14/cbos-long-term-budget-outlook-shows-obamanomics-dire-consequences/