Washington's numbers experts in the non-partisan Congressional Budget Office say that the national debt — despite a slightly improving trend currently — will soar from 73 percent of economic output now to 100 percent by 2038. And that's the good news. If that's the good news, do we really want to hear the bad? Probably not. But let's hear it anyway.
According to an “alternate fiscal scenario” CBO calculated, by 2038 America's national debt actually may be 190 percent of economic output (Gross Domestic Product). How bad would that be? That would be even worse than dysfuctional Greece today with its addiction to “entitlements” aggravated by a national disposition to resist paying taxes. (Greece's unemployment is 27 percent — a figure that exceeds the U.S. rate at the depths of the Great Depression.)
The CBO's alternate 190 percent debt figure isn't a frightful projection hauled out for Halloween. CBO says its 190 percent calculation is, if anything, more realistic than its 100 percent one. That's because the 100 percent figure comes from a long-shot assumption that the politicians American voters send to Washington in coming years will make certain difficult decisions they previously ducked and are ducking now. The higher, 190 percent number comes from a better-odds bet that American voters will go on sending to Washington politicians who'll continue to tell people what they want to hear — namely, that there's a free lunch, (or should be), and somebody else can always pick up the tab.
But as the financial weekly, Barron's, recently reported, there's an ever-larger proportion receiving benefits from the government cornupopia — Social Security retirement, Social Security disability, food stamps, Medicare, Medicaid, ObamaCare. And there's an ever-dwindling proportion paying contributions into the cornucopia to keep it replenished. So the simple, inexorable, mathematical reality is that America's running out of Somebody Elses to stick with the mounting entitlement bill.
Right now there are 44.7 million Americans over 65. By 2038 there'll be 79.1 million. The “dependency ratio” — the ratio of those paying money into the cornucopia vs. the number taking money out of it — is projected to drop from a cutting-it-close 4.4 now to a simply-won't-cut it 2.7 in 2038.
Meanwhile, Capitol Hill is swarming with mischief-makers wearing costumes of responsible elected officials. It's Republican trick vs. Democrat treat.
Republicans pretend that the challenge can be met with scorched-earth policies — with tax reductions, cold-turkey benefit cutoffs and magical free-market nostrums. This can be done smoothly and without turmoil, Republicans want you to believe.
Democrats — two-thirds of the problem since they occupy two-thirds of the government — have discovered that envy and resentment are highly effective political pitches. Their cry is: More treats for all! We need only to force the rich to share more of their haul of goodies, they insist. President Obama has raised the envy-resentment pitch to an art form of hustle. This Halloween season, be scared. Be very scared.