The Coming Economic Situation

Doug Elmendorf, the CBO Director, was talking to the House of Representatives’ Budget Committee the other day.  What he presented was a demonstration of the level of understanding of economics possessed by the present administration.

Congressman Tom McClintock (R, CA) asked Elmendorf whether more or fewer people were working today than at the start of 2009.    Elmendorf’s answer was unequivocal:

I believe the answer to that is there are fewer people, Congressman.

That was just one item.  The CBO director had lots more to say:

The pace of the recovery has been slow since the recession ended two and a half years ago.  And we project that it will continue to be slow for the next two years.

Elmendorf went on:

[E]conomic growth will be only 2 percent this year — and 1.1 percent next year. … [T]hat will leave the unemployment rate at 8.9 percent at the end of this year, well above current the current rate of 8.5 percent….  [I]n 2013, CBO estimates unemployment will be even higher — at 9.2 percent.


“…the fundamental fiscal challenge during this decade and beyond remains the aging of the population and rising costs for health care.  The number of people aged 65 or older will increase by one-third in the coming decade, substantially raising the costs of Social Security, Medicare and Medicaid.”

In addition, he said, the new federal health care overhaul will significantly increase the number of non-elderly people receiving assistance through federal health care programs, such as Medicaid.

All of that is likely to balloon current levels of debt.

Despite this, though, Progressives refuse to allow Social Security, Medicare and Medicaid to be fixed, or altered in any way.  President Obama, for instance, has said through his Press Secretary Jay Carney, the Republican effort to reform Medicare contained in the House-passed budget would “end Medicare as we know it,” as if that’s a bad thing.

The CBO did forecast a shrinking budget deficit over the coming years “under existing law.”  But existing law has the Bush tax cuts ending next year—for everyone, including those of us and small businesses with incomes under $250 thousand per year.  Existing law also has the that required 30% reduction in doctor reimbursement under Medicare reimbursement schedules.

And the Progressives are attempting to spin this coming disaster with distortion.  Congressman Bill Pascrell (D, NJ) insists

…there are people here that want to destroy the government, that it has no responsibility and it can’t live up to the obligations….

Of course, this elides the destructiveness toward our individual liberties from an ever expanding, ever intruding government.  This elides the destructiveness of government’s arrogating to itself responsibilities that ought to be ours, decisions that ought to be ours.  And it ignores the fact that among those obligations that government “can’t live up to” are those Social Security, Medicare and Medicaid programs that the Progressives won’t allow to be altered.

Congressman Chris Van Hollen (D, MD) has his distortion, also.  He insists that absent Progressive policies and President Obama’s “stimulus” plan, things would have been much worse.

The Recovery Act did serve its purpose.  It’s kind of like when you’re walking up an escalator that’s going down very quickly.  If you take no action you will go down very fast[.]

This would be amusing under other circumstances.  It ignores the fact that our economy now would be much better off had it not been for Big Government’s interference with it.  Indeed, in Van Hollen’s terms, if you’re walking up the down escalator, it might actually be better to get off that one and get on the up escalator.

No wonder the Progressives are running away from their records, away from our country’s future.

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