The disastrous fiscal legacy of the Bush Administration

We are SO fucked:

The comptroller general of the United States is explaining over eggs how the nation's finances are going to hell.
"We face a demographic tsunami" that "will never recede," David Walker tells a group of reporters. He runs through a long list of fiscal challenges, led by the imminent retirement of the baby boomers, whose promised Medicare and Social Security benefits will swamp the federal budget in coming decades.

The breakfast conversation remains somber for most of an hour. Then one reporter smiles and asks, "Aren't you depressed in the morning?"

Sadly, it's no laughing matter. To hear Walker, the nation's top auditor, tell it, the United States can be likened to Rome before the fall of the empire. Its financial condition is "worse than advertised," he says. It has a "broken business model." It faces deficits in its budget, its balance of payments, its savings — and its leadership.

Walker's not the only one saying it. As Congress and the White House struggle to trim up to $50 billion from the federal budget over five years — just 3% of the $1.6 trillion in deficits projected for that period — budget experts say the nation soon could face its worst fiscal crisis since at least 1983, when Social Security bordered on bankruptcy.

Without major spending cuts, tax increases or both, the national debt will grow more than $3 trillion through 2010, to $11.2 trillion — nearly $38,000 for every man, woman and child. The interest alone would cost $561 billion in 2010, the same as the Pentagon.

From the political left and right, budget watchdogs are warning of fiscal trouble:

• Douglas Holtz-Eakin, director of the non-partisan Congressional Budget Office, dispassionately arms 535 members of Congress with his agency's stark projections. Barring action, he admits to being "terrified" about the budget deficit in coming decades. That's when an aging population, health care inflation and advanced medical technology will create a perfect storm of spiraling costs.

• Maya MacGuineas, president of the bipartisan Committee for a Responsible Federal Budget, sees a future of unfunded promises, trade imbalances, too few workers and too many retirees. She envisions a stock market dive, lost assets and a lower standard of living.

• Kent Conrad, a Democratic senator from North Dakota, points to the nation's $7.9 trillion debt, rising by about $600 billion a year. That, he notes, is before the baby boom retires. "We're not preparing for what we all know is to come," he says. "We're all sleepwalking through this period."

• Stuart Butler of the conservative Heritage Foundation projects a period from now until 2050 in which tax revenue stays stable as a share of the economy but Medicare, Medicaid and Social Security spending soars. To avoid big tax increases, he says the government has to "renegotiate" the social contracts it made with its citizens.

• Alice Rivlin and Isabel Sawhill of the centrist Brookings Institution put their pessimism into a book titled Restoring Fiscal Sanity. Rivlin, who became the first director of the Congressional Budget Office in 1974, says it will take an "economic scare" such as the 1987 stock market crash to spur action. Sawhill likens the growing gulf between what the government spends and takes in to a "Category 6 fiscal hurricane."

Aside from blaming the baby boomers for the problem because we're refusing to be the first generation of the 20th century to be asked to die the minute we turn 65, it's not a bad article. But frankly, it's a bit disingenuous to be asking seniors and poor people for massive cuts in programs at the same time as the Administration is asking for ever more and deeper tax cuts for those who already have more money than they and their heirs can spend in five lifetimes.

The increase of the FICA tax in the 1980's was supposed to handle baby-boomer retirement -- except that the government used that money and now has no intention of paying it back.

The fact of the matter is that for all that Republicans love to equate government spending with welfare queens in Cadillacs (which shows you just how old that particular chestnut is), most Americans love their programs. They want Social Security. They want Medicare. They want federal funds for schools, and highways. They even want guaranteed health insurance.

Conservatives still try to make you believe that "rich people create jobs". This may be true. But if the jobs are being created in China, or in Bangalore, or Siberia, or Indonesia, those jobs are not benefitting Americans. Yes, they may mean cheaper goods, but when Americans aren't employed, they have no money to even buy cheap goods.