Richardcyoung.com

The Online Home of Author and Investor, Dick Young

  • Home
  • How We Are Different
  • About Us
    • Foundation Principles
    • Contributors
  • Investing
    • You’ve Read The Last Issue of Intelligence Report, Now What?
  • Your Survival Guy
  • The Great Reset
  • COVID-19
  • My Rifles
  • Dividends and Compounding
  • Your Security
  • The Swiss Way
  • Dick Young
  • Debbie Young
  • Key West
  • Paris
  • Dick’s R&B Top 100
  • Liberty & Freedom Map
  • Your Health
  • Ron Paul
  • Bank Credit & Money
  • Dick Young’s Safe America
  • Your Survival Guy’s Super States
  • Critical Race Theory
  • NNT & Cholesterol
  • Work to Make Money/Invest to Save Money

Entitlement Programs “Roaring Towards Insolvency”

August 12, 2013 By Richard C. Young

The sequester has wrought wonders in reducing the budget deficit.And unlike the hand wringing from neocon hawks, it poses zero risk for the defense of America.Click to my accompanying posts on the Cato Institute’s Chris Preble for the real story on defense. Chris is America’s foremost scholar on “Realistic Foreign Policy.” His book, The Power Problem is a landmark, and must reading for any serious foreign policy analyst, student or historian. Here Stephen Moore lays out the miracle of the sequester and points to entitlements as the next area to attack.

Consider the numbers: According to the Congressional Budget Office, annual outlays peaked at $3.598 trillion in fiscal 2011. After President Obama’s first two years in office, many in Washington expected that number to hit $4 trillion by 2014. Instead, spending fell to $3.537 trillion in fiscal 2012, and is on pace to fall below $3.45 trillion by the end of this fiscal year (Sept. 30). The $150 billion budget decline of 4% is the first time federal expenditures have fallen for two consecutive years since the end of the Korean War.

This reversal from the spending binge in 2009 and 2010 began with the debt-ceiling agreement between Mr. Obama and House Speaker John Boehner in 2011. The agreement set $2 trillion in tight caps on spending over a decade and created this year’s budget sequester, which will save more than $50 billion in fiscal 2013.

As long as Republicans don’t foolishly undo this amazing progress by agreeing to Mr. Obama’s demands for a “balanced approach” to the 2014 budget in exchange for calling off the sequester, additional expenditure cuts will continue automatically. Those cuts are built into the current budget law.

In other words, Mr. Obama has inadvertently chained himself to fiscal restraints that could flatten federal spending for the rest of his presidency. If the country sees any normal acceleration of economic growth (from the anemic 1.4% growth rate so far this year), the deficit is on a path to drop steadily at least through 2015. Already the deficit has fallen from its Mount Everest peak of 10.2% of gross domestic product in 2009, to about 4% this year. That’s a bullish six percentage points less of the GDP of new federal debt each year.

And on entitlement programs:

But the fiscal story isn’t all rosy. The major entitlements remain on autopilot and are roaring toward insolvency. Thanks in large part to Mr. Obama’s aversion to practical fixes, the Congressional Budget Office calculates that through July of this year Social Security, Medicare and Medicaid spending are up $73 billion from just last year. This doesn’t include ObamaCare, which is scheduled to add $1 trillion of new costs over the next decade.

So the fiscal progress reported here is no excuse for complacency. But it does call into question the wisdom of a government-shutdown confrontation over the budget this fall or a debt-default showdown that runs the risk of suspending the spending caps and sequester and revitalizing an increasingly irrelevant president.

If you’re willing to fight for Main Street America, click here to sign up for my free weekly email.

Related Posts

  • The Entitlement Titanic Has Already Hit the Iceberg
  • VIDEO: Krauthammer's Take: Reform Entitlement, or Else We'll 'Go Over a Cliff'
  • Trump's Budget Proposes Overdue Reforms for a Wide Range of Programs
  • Author
  • Recent Posts
Richard C. Young
Richard C. Young is the editor of Young's World Money Forecast, and a contributing editor to both Richardcyoung.com and Youngresearch.com.
Latest posts by Richard C. Young (see all)
  • Dollar Strengthens as “Least Bad” Currency Today - July 6, 2022
  • BANKRUPTCY: Airline Restructures as Exhausted Pilots Demand Relief - July 6, 2022
  • BIDEN OUT OF TOUCH: Will America See Recession, or Worse? - July 5, 2022

Dick Young’s Must Reads

  • My Battle-Hardened Stock Market Strategy for the Worst of Times
  • A NEW CONTRACT WITH AMERICA: Rick Scott Finally Gives the GOP Something to Run On
  • Tom Brady Is Proof You Shouldn’t Retire if You Still Love Your Work
  • The Common Ground of Democracy is Sinking Beneath Americans’ Feet
  • The Problem in America
  • V4 Stands Against North African and Middle Eastern Invasion
  • “The Losses are Taking a Toll on Their Health”
  • FARM AMERICA: New York City’s Finest Cheesemongers
  • We’ll Burn the Place Down!
  • Hungarian Hardliner Viktor Orban Shows European Globalists the Way

Disclosure

RSS Youngresearch.com

  • Red States Churning Out Jobs While Blue States Lag Behind
  • Avoid This Serious Tax Mistake in Retirement
  • “Talk to Me, Goose!” Time Flies in Top Gun: Maverick
  • Could Car Dealers Get Flooded with Cars Mid-Recession?
  • Happy Independence Day
  • Even Without Food and Gas, Inflation is Soaring
  • Despite Inflation, Best Year Ever for Vacation Demand
  • Time to Save, Troubles Dining Out, and Intelligence on Yellowstone
  • Purchases of Gaming Chips for Crypto Mining Tailing Off
  • RURAL RENAISSANCE: America Finds the Country Again

Dollar Strengthens as “Least Bad” Currency Today

Biden’s Economic Illiteracy and Shameless Demagoguery

“Shooter! Run!”

FOOD SHORTAGE: Drought in Italy Leaves Farmers High and Dry

BANKRUPTCY: Airline Restructures as Exhausted Pilots Demand Relief

BIDEN OUT OF TOUCH: Will America See Recession, or Worse?

Copyright © 2022 | Terms & Conditions | About Us | Dick Young | Archives