The sky is falling

Growing up, I had what I thought was a typically fatal assessment of the world I was going to inherit.

I have a vivid 1980 recollection of my friends and I all agreeing that the world would end in nuclear holocaust. This was assumed by all to be fact in the same way that we assumed that one day we would all have to get jobs and pay taxes. Oh sure, it would be dreadful, but it was so far off – and besides, what could be done about it?

Thankfully, we were only right about jobs and taxes.

The new looming catastrophe (aside from our nation's incessant flirting with despotism) is financial. The country will go broke.

This has affected me in a similar fashion. I know that this is a tangible possibility, but it will happen decades from now. Besides, politicians have been stupid for generations, what in the world can be done about it?

Heck, it might not even be real – I mean, if the country really was in dire financial straits, wouldn't somebody be sounding the alarm?

Quick scans of Election 2008™ doesn't show any serious coverage. Opinion polls don't list anything like "Country going broke," but list Jobs/Economy a distant third behind Iraq and health care.

We either don't know, don't care, or both.

Enter the GAO, the Government Accountability Office.
Their April report entitled The Nation’s Long-Term Fiscal Outlook (PDF) lays out some pretty appalling data.

Their first talking point:

The Bottom Line: Federal Fiscal Policy Remains Unsustainable

(the alternate scenario is letting the Bush tax cuts expire, the baseline extended assumes they do not)

The report also shows comparisons of what federal spending will look like over time as expressed in percentages of the Gross Domestic Product.

Here's the vanilla scenario: The Bush tax cuts are allowed to expire and revenue (as a share of the GDP) increases through 2017 because of bracket creep, more taxpayers being subject to the AMT and more revenue from tax-deferred retirement accounts (presumably due to larger numbers of retirees taking out their tax-deferred money).

Here's what that looks like:

Okay, that sucks rocks.

Now here's the same time interval with the Bush tax cuts extended and the AMT exemption amount retained at the 2006 level through 2017.

That sucks even harder.

Wow, who'd have thought that lowering our tax revenue would adversely affect our national financial picture?

The GAO, in its usual antiseptic prose, spells out what is new about this report:

Despite some improvement in the near-term projections for Social Security and Medicare, the long-term outlook has not changed: it remains unsustainable.

So here we are, hell bent on winning the war on anyone the administration targets – while behind us the country is quietly going broke.

It would be a gross misstatement to say that this is the fault of one administration – a series of presidents have been unwilling to tell the public that they will have to pay more or get less.

However, the Bush tax cuts will hasten our financial ruin – and we need to challenge any and all candidates for national office to ask them what the hell they plan to do with our country.