In a very clear way, using numbers provided by the governments own Congressional Budget Office, Heritage.org does a fantastic job of illustrating where Obama and the democrats are taking us. For you liberals who think we spend too much on defense, take note. Defense spending (at approximately 9% of GDP) is individually less than Medicare, Medicaid, or Social Security, and is only a drop in the bucket compared to all social spending combined. That’s kind of ironic when you consider that without a strong national defense there will be no society to secure.
Obama and the democrats are destroying us economically, not to mention socially and morally. They are spending money we will not have for generations to come, they are devaluing the dollar by printing more and more money, they have driven the dollar from its historic place as the central trading currency in the world, and they have sold most of our country to the Chinese who can now destroy our economy on a whim. All to buy votes and gain political power.
The charts below come from Heritage’s 2009 Federal Revenue and Spending Book of Charts. You can download the entire Book of Charts in PDF format HERE.
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Obama’s Budget Would Increase Debt by 26.3 Percent of GDP Compared to CBO Baseline
The non-partisan Congressional Budget Office projects that publicly held debt (Debt issued in the form of treasury securities; unlike government-held debt that is issued from one part of the U.S. government to another.) will reach 56.1 percent of GDP under current law. If President Obama’s budget is implemented, CBO projects debt to reach 82.4 percent of GDP.
Debt Held by the Public as a Percentage of GDP
Source: Congressional Budget Office; White House Office of Management and Budget.
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Obama’s Budget Would Create Unprecedented Deficits
Since the 1960s, deficits driven largely by increased levels of spending have been the norm, while surpluses were an exception. The 2009 Congressional Budget Office deficit projection under President Obama’s plan is far above the 45-year historical average of 2.2 percent of GDP.
Average Federal Deficit as a Percentage of GDP by Administration
Source: Congressional Budget Office; White House Office of Management and Budget.
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The Unfunded Liabilities of Entitlement Programs Dwarf Recent Bailout Spending
Recently, massive federal government spending on programs such as the Troubled Asset Relief Program (TARP), the 2009 economic stimulus bill, and the bailout of AIG has dazzled the nation with their enormous price tags. However, the cost of the unfunded obligations for Social Security and Medicare are more than 61 times the cost of TARP alone.
Total Unfunded Obligations for Medicare and Social Security vs. Bailout Spending
Source: U.S. Department of Treasury; U.S. Government Accountability Office; Congressional Budget Office.
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The Long-Term Entitlement Spending and Deficit Problem Could Be Resolved Without Tax Increases
In May 2008, Congressman Paul Ryan (R-WI) introduced The Roadmap for America’s Future, a comprehensive bill that would reform entitlements and hold taxes near their historical average of 18.4 percent of GDP. The Congressional Budget Office scored his proposal and found that it would eliminate long-term deficits without tax increases.
Federal Spending as a Percentage of GDP Under Rep. Paul Ryan’s Proposal
Source: Congressional Budget Office.
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Entitlement Spending Will More Than Double by 2050
Entitlements (Program providing guaranteed benefits to eligible parties, such as retirees; funding levels grow automatically.), fueled by demographic changes and rising health care costs, will cause federal spending to explode. Medicaid (Federal health care program for low-income individuals and families with children.) spending will more than double, increasing from 1.5 percent of GDP (Gross domestic product is the total value of goods and services produced in the United States.) in 2005 to 3.1 percent in 2050. Medicare (Federal health care program for retirees; includes inpatient and outpatient care and drug coverage.) spending will more than triple, increasing from 2.7 percent of GDP in 2005 to 8.9 percent in 2050.
Entitlement Spending as a Percentage of GDP
Source: Congressional Budget Office.
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Entitlements Alone Will Eclipse Historical Tax Levels by 2052
Spending on the three major entitlements, Medicare, Medicaid, and Social Security, will more than double in the next 40 years. Without major reforms, entitlement spending will consume all federal tax revenues by 2052.
Three Major Entitlements and Tax Revenues as a Percentage of GDP
Source: Congressional Budget Office.
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If Tax Revenue Is Held At Historical Levels, Total Spending Could Reach 67 Percent of GDP
Historically, tax revenues have hovered around 18.4 percent of GDP. If taxes are kept at these levels, spending from the three major entitlements, Social Security, Medicare, and Medicaid, will push spending levels to unsustainable heights, crowding out all other programs by 2052.
Federal Spending and Revenue as a Percentage of GDP
Source: Heritage Foundation calculations based on White House Office of Management and Budget and Congressional Budget Office data.
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http://www.heritage.org/research/features/BudgetChartBook/Obama-Scenario.aspx
Obama’s Budget Ignores Entitlement Crisis
The entitlements – Social Security, Medicare Medicaid – will impose costly burdens on future generations if they are not modernized. Unfortunately, President Obama’s budget fails to address spending on these programs and does nothing to address America’s long-term deficit problem.
Federal Spending and Revenue as a Percentage of GDP Under President Obama’s Budget
Source: Heritage Foundation calculations based on White House Office of Management and Budget and Congressional Budget Office data.
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The Ratio of Workers to Social Security Beneficiaries Is Declining
As the baby boomers age, the nation’s demographic makeup will change greatly. Currently, there are approximately 3.3 workers for every Social Security beneficiary, while in 1945 the ratio was approximately 42 workers per retiree. This declining ratio means that fewer and fewer workers will be left to support more and more beneficiaries.
Covered Workers per Social Security Beneficiary, Intermediate Scenario
Source: 2008 Social Security Trustees Report.
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Repealing Tax Cuts and Not Fixing AMT Won’t Balance the Budget
If the 2001 and 2003 tax cuts expire and the AMT (Alternative Minimum Tax. A parallel income tax system increasingly falling on the middle class.) is not fixed, taxes will soon grow to unprecedented levels. Even this massive increase in federal revenue will not solve the spending imbalance driven by Medicare, Medicaid, and Social Security.
Federal Spending as a Percentage of GDP Under the Extended Baseline Scenario
Source: Heritage Foundation calculations based on Congressional Budget Office data.
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Social Security Spending Soon to Rise Rapidly
Although Social Security spending has remained relatively constant since the early 1980s, the approaching wave of retiring baby boomers is set to send Social Security spending to levels never before seen.
Social Security Spending as a Percentage of GDP
Source: Congressional Budget Office.
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Tax Rates Would Need to More Than Double If Entitlements Are Not Reformed
Under current law, the costs of Medicare, Medicaid, and Social Security will rise substantially. If this spending were funded solely through federal income tax increases, tax rates would more than double, even for the lowest tax bracket.
Increased Tax Rates Necessary to Pay for Entitlement Spending
Source: Congressional Budget Office.
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