CBO Report Says Obama’s Spending Spree Will BREAK America’s Economy

In 2008, America’s national debt was hovering around $10 trillion. Today, that number is approaching $18 trillion.

Archaic social welfare and poverty programs–Social Security, Medicare, and Medicaid–coupled with new ones like Obamacare, are throwing America’s spending spree into hyperdrive.

And, according to a new Congressional Budget Office report, our skyrocketing federal debt will eventually suffocate our economic potential and throw us into a death spiral that will force more borrowing and spending to pay for a growing list of programs.

We are on a highway to economic hell and we are quickly running out of exits.

So what can we expect if we stay on this dangerous course?

“At some point, investors would begin to doubt the government’s willingness or ability to meet its debt obligations, requiring it to pay much higher interest costs in order to continue borrowing money,” CBO report says. “Such a fiscal crisis would present policymakers with extremely difficult choices and would probably have a substantial negative impact on the country.”

In the immediate future, CBO predicts pain that will effect private sector job growth, your ability to save money, and economic competitiveness:

• The large amount of federal borrowing would draw money away from private investment in productive capital over the long term, because the portion of people’s savings used to buy government securities would not be available to finance private investment. The result would be a smaller stock of capital, and therefore lower output and income, than would otherwise have been the case, all else being equal. (Despite those reductions, output and income per person, adjusted for inflation, would be higher in the future than they are now, thanks to the continued growth of productivity.)
• Federal spending on interest payments would rise, thus requiring the government to raise taxes, reduce spending for benefits and services, or both to achieve any targets that it might choose for budget deficits and debt.
• The large amount of debt would restrict policymakers’ ability to use tax and spending policies to respond to unexpected challenges, such as economic downturns or financial crises. As a result, those challenges would tend to have larger negative effects on the economy and on people’s well-being than they would otherwise. The large amount of debt could also compromise national security by constraining defense spending in times of international crisis or by limiting the country’s ability to prepare for such a crisis.

So how do we avoid the coming economic calamity?

Cutting government-backed investments that produce half of that found in the private sector. Of course budget cuts could help avoid stagnation down the road. A massive reduction in tax rates, which would help spur private investment.

And of course we would first have to elect politicians with spines, ones more focused on digging America out of this mess than they are about making themselves rich.