By Jared Allebest
Although we are currently $15 trillion in debt, the forecast of our economic future is bleak. Recently, a report was published that looked at the future liabilities to future revenue to be $222 trillion:
The U.S. fiscal gap, calculated (by us) using the Congressional Budget Office’s realistic long-term budget forecast -- the Alternative Fiscal Scenario -- is now $222 trillion. Last year, it was $211 trillion. The $11 trillion difference -- this year’s true federal deficit -- is 10 times larger than the official deficit and roughly as large as the entire stock of official debt in public hands.This fantastic and dangerous growth in the fiscal gap is not new. In 2003 and 2004, the economists Alan Auerbach and William Gale extended the CBO’s short-term forecast and measured fiscal gaps of $60 trillion and $86 trillion, respectively. In 2007, the first year the CBO produced the Alternative Fiscal Scenario, the gap, by our reckoning, stood at $175 trillion. By 2009, when the CBO began reporting the AFS annually, the gap was $184 trillion. In 2010, it was $202 trillion, followed by $211 trillion in 2011 and $222 trillion in 2012.
1) It would spend $40.135 trillion over 10 years, compared with the $46.959 trillion the White House said its budget would spend over 10 years.2) It would bring in $37.008 trillion in tax revenue over 10 years, compared with $40.274 trillion in the White House plan.3) Lowers tax rates and cuts tax breaks. But the report doesn’t say which tax breaks would be targeted for new limits or elimination.4) Overturns the White House’s health care law and replaces it with changes. New Medicare rules would not go into effect for those already using the program or about to qualify for benefits. They would be able to use the existing program.5) On Medicare, it would give Americans a choice to enroll in a Medicare-type plan. The government would subsidize part of the payments for private-run insurance plans. Mr. Ryan believes this competition between firms “will help ensure guaranteed affordability.” For the poor or those with more health risks, Medicare would offer additional assistance.6) The Medicare piece is perhaps the biggest flashpoint in the entire plan. The White House and Democrats have said it would gut benefits for seniors, and even former Massachusetts Governor Mitt Romney has kept some distance from it.7) On Medicaid, the budget would turn it into a federal block grant program, “thus freeing states to tailor their Medicaid programs to the unique needs of their own populations.”8) The plan offers no details for changes to Social Security, other than calling on Congress and the White House to pursue modifications to it.9) On taxes, the plan calls for two individual income tax rates – 10% and 25%. It also proposes “clearing out the burdensome tangle of loopholes that distort economic activity,” but it doesn’t identify which ones should be cut.10) It calls for overhauling the corporate tax code by gutting exemptions and lowering the top corporate rate from 35% to 25%.11) The Ryan budget would reduce the deficit to just 3% of gross domestic product by fiscal year 2014, three years faster than the White House estimated its plan would reach that level. For comparison, the deficit is expected to be $1.2 trillion this year, 7.8% of GDP.12) The Ryan budget would not, at least according to its 10-year window, balance the budget, as tax revenue would always lag behind spending.