Minor Thoughts from me to you

Just in case you're case curious, the current projected 10-year U.S. budget deficit is now $9.1 trillion. That's on top of the $11.7 trillion of debt that the U.S. currently owes. The Wall Street Journal has further information on the rather grim news.

CBO predicts that debt held by the public as a share of GDP, which was 40.8% in 2008, will rise to 67.8% in 2019--and then keep climbing after that. CBO says this is "unsustainable," but even this forecast may be optimistic.

Here's why. Many of the current budget assumptions are laughably implausible. Both the White House and CBO predict that Congress will hold federal spending at the rate of inflation over the next decade. This is the same Democratic Congress that awarded a 47% increase in domestic discretionary spending in 2009 when counting stimulus funds. And the appropriations bills now speeding through Congress for 2010 serve up an 8% increase in domestic spending after inflation.

Another doozy is that Nancy Pelosi and friends are going to allow a one-third or more reduction in liberal priorities like Head Start, food stamps and child nutrition after 2011 when the stimulus expires. CBO actually has overall spending falling between 2009 and 2012, which is less likely than an asteroid hitting the Earth.

Federal revenues, which will hit a 40-year low of 14.9% of GDP this year, are expected to rise to 19.6% of GDP by 2014 and then 20.2% by 2019--which the CBO concedes is "high by historical standards." This implies some enormous tax increases.

CBO assumes that some 28 million middle-class tax filers will get hit by the alternative minimum tax, something Democrats say they won't let happen. CBO also assumes that all the Bush tax cuts disappear--not merely those for the rich, but those for lower and middle income families as well. So either the deficit is going to be about $1.3 trillion higher than Washington thinks, or out goes Mr. Obama's campaign promise of not taxing those who make less than $250,000.

What would the deficit projections look like it the CBO forecasts matched Congress's behavior? Even more depressing. The Concord Coalition publishes a "plausible baseline" that uses more realistic assumptions. They project the 10-year deficit as $14.4 trillion.

If we continue on the spending path that we're on, we'll more than double the national debt in only a decade.

One more thing. These numbers are what the budget looks like before passing a healthcare bill that's forecasted to add another $1 trillion to the deficit all by itself.