Federal spending soars 25% before bailout

Federal spending soars 25% before bailout
Taxpayers get $1 trillion debt

The government’s spending commitments exploded by 25 percent in 2008, putting taxpayers more than $1 trillion in the hole even before the astronomical costs of the economic bailout were taken into account, according to an annual report released Monday by the White House.

A joint report by the White House budget office and Treasury Department said that much of the increase in obligations came from an unexpected jump in veterans benefits liabilities, while revenues remained mostly flat because of the recession that began a year ago.

Jim Nussle, director of the White House Office of Management and Budget, called the report “sobering.”

The report showed that U.S. debts and liabilities are close to passing the value of the U.S. population’s net worth, said Peter G. Peterson Foundation, a nonprofit organization devoted to promoting fiscal responsibility.

“The value of this report is that it shows the long-term cost of expensive commitments we are making today,” said Brian Riedl, a budget analyst for the Heritage Foundation.

“The government makes a lot of commitments that cost a little in the short run but a lot in the long run, and this document is one of the only government documents that show the long-term cost of the long-term commitments,” Mr. Riedl said. “What it shows is that future trends are completely unsustainable because the government has promised more benefits than the taxpayers can pay for.”

The costs of the $700 billion economic rescue package were not included in the report because it covered only the budget year that ended Sept. 30. The bailout was passed and signed into law in early October.

However, the Treasury did borrow $300 billion from taxpayers in fiscal 2008 to “to increase cash balances at the [Federal Reserve] so that the Fed can assist with market stabilization efforts,” the report said.

Peterson Foundation President David Walker, the nation’s former comptroller, called for President-elect Barack Obama to make “tough choices … to strengthen the government’s financial condition once the economy begins growing again.”

The report said current revenues are sufficient to pay only half of what the government will owe in 30 years and that the government’s debt has put the country on a path to “create financial sector instability, increasing risk and uncertainty across many sectors of the U.S. economy.”

The $1 trillion “net operating cost” in the report - up from $275.5 billion in fiscal 2007 - is different from the federal budget deficit because it uses proper accounting standards to include future spending obligations. The federal budget measures only “dollars in and dollars out” in a given year, Mr. Riedl said.

The deficit in fiscal 2008, which ended Sept. 30, was $454.8 billion, up from $162.8 billion in fiscal 2007. The deficit itself is expected to be about $1 trillion in fiscal 2009

The Peter G. Peterson Foundation said the report showed “an estimated $56.4 trillion in debts, liabilities and promises for Medicare and Social Security versus a total household net worth of $56.5 trillion.”

washingtontimes.com/news/2008/dec/16/spending-soars-25-before-bailout/

:eek:

We are spending away our super power status, as well as our freedoms. This may be the beginning of the end for the once great US of A. Most nations that survive this long, usually die from within.

add close to another trillion in spending over the next two years. I wonder who’s going to get stuck with the tab on this?:rolleyes:

news.yahoo.com/s/ap/20081217/ap_on_go_pr_wh/obama_stimulus

people have been warned about this for years.

yet we continue to elect leaders who spend, and spend, and spend, none are held accountable ,and the majority of these clowns in the federal government are the most fiscally irresponsible people on the planet.

the U.S. government just spent 650 millions dollars on a visitors center for the Capital, 3 years late and close to 400 million dollars over budget.

I wonder how many other worthless projects has taxpayer money been spent on? Unconstitutional wars? Bailing out failed companies?

“America will never be destroyed from the outside. If we falter and lose our freedoms, it will be because we destroyed ourselves.”~Abraham Lincoln

your freedoms are being and have been eroded by the federal government for years. they are not interested in the well-being of the PEOPLE.

I remember when Reagan was running for President he was upset that the national debt was almost 1 trillion. This year we’ll have almost 2 trillion in deficit spending with all the bail outs. WE CAN NOT SUSTAIN THIS RATE OF SPENDING. Every single dime needs to be looked at for viability…if necessary we will have to not only cut spending but raise taxes…FLAT TAX NOW!

Taxpayers don’t care about deficits and “rate of spending”… they want lower taxes and more programs and better roads. And they’ll vote for the guy who gives it to them.

No matter how bad the economic crissis the government grows and grows regardless of whether there is a republican or democrat in office. If we mix in some fear they can take away rights too. A good portion of the blame rests on the media which is hardly a watch dog but rather a mouthpiece for the government.

And by the end of his first term, the national debt was double that, thanks to tax cuts and a huge hike in military spending. By the end of Reagan’s second term, the national debt was triple what it was when Reagan entered. George Bush has simply followed the same model, using the same justification of “supply side economics.” Sadly, it doesn’t work.

Having the government pump massive amounts of money into the economy will give a short term economic boost. But unless that money is invested in making the economy more efficient it is just a short-term fix. Military spending, while necessary, is dead-end spending. It has a low multiplier effect. We need to be investing in things such as the energy grid and making more efficient factories. Government has a role in this (after all, utility companies haven’t managed to upgrade the electrical grid on their own, despite being monopolies in most areas) and so does business. Cutting corporation taxes usually brings back more money than is lost to the government. The same is not true of cutting income taxes.

We need to stop funding our government on IOUs. Unfortunately, neither party is committed to fiscal responsibility.

Wow. And with a national debt in the trillions of dollars I have to ask, will it ever stop? This is getting ridiculous. Federal spending should be decreasing, not increasing!

Dale_M;

But unless that money is invested in making the economy more efficient it is just a short-term fix. We need to be investing in things such as the energy grid and making more efficient factories.

How does this aid the long term economy? And aren’t our factories pretty darn efficient right now?

Cutting corporation taxes usually brings back more money than is lost to the government. The same is not true of cutting income taxes.

Isn’t the bold: Supply side economics? How about we cut all tax rates AND federal liabilities?

We need to stop funding our government on IOUs. Unfortunately, neither party is committed to fiscal responsibility.

Sad, but true. But our largest federal responsibillity are social programs. Neither party will cut or fix those. And the people do not want to. So, when our government cuts their own throat(and ours), the people are to blame.

Holly3278;

This is getting ridiculous. Federal spending should be decreasing, not increasing!

That will not happen. And if it does, the main target will be the millitary. Even though social programs are our lagerst, most consistant expense, and that won’t happen.

When some homeowners take out mortgages they can’t afford, they default, and lose the house and investment.

When Washington spends more of our money than we can afford, same will happen to our country. Sort of.

One trillion deficit in one fiscal year. The government only takes in 2.5 trillion or so a year. I don’t know about you, but I can’t spend 40% more in a given year than my budget allowed.

The only thing worse than Washingtonians are the people who elect them. We will get what we deserve. And in my estimation, the worst is yet to come.

-Tim

timotheos;

We will get what we deserve.

Sadly, I welcome that. The time has come to clean up this mess and rebuild. 1) Americans will see that we need to stop the madness, and 2) The rest of the world will see that they ruined a great thing.

You were bold in your wickedness and said,
‘There is no one to see me’.
That wisdom and knowledge of yours
led you astray.
You said to yourself,
‘I, and none besides me’.
A calamity shall fall on you
which you will not be able to charm away,
a disaster shall overtake you
which you will not be able to avert,
unforeseen ruin
will suddenly descend on you.
[RIGHT][INDENT][INDENT] - God[/INDENT][/INDENT][/RIGHT]

I wonder if they have factored in the tremendous windfall the government is going to get from the Federal Estate Tax when the Baby Boomers die.

I think Obama and the Democrats in Congress are going to feel very safe in retaining it or even reducing the Lifetime Exemption. After all, it’s just another “tax on the rich” isn’t it? Add some second-term inflation, which is sure to happen, and the overnment is going to make out like a bandit on the “death tax”.

It would be smart for anyone with any significant assets to gift them in trust to their children RIGHT NOW while asset values are deflated and while the Lifetime Exemption still exists. Otherwise, their children are going to end up with nothing but a big canceled check for estate taxes later on.

With the likely increase in taxation in the future, that might be the only chance your children have of acquiring anything.

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