GAO: Federal Government On Unsustainable Long-Term Fiscal Path
Information received since the Federal Open Market Committee met in October suggests that economic activity and employment have continued to expand at a moderate pace in recent months, apart from weather-related disruptions. Although the unemployment rate has declined somewhat since the summer, it remains elevated. Household spending has continued to advance, and the housing sector has shown further signs of improvement, but growth in business fixed investment has slowed. Inflation has been running somewhat below the Committee’s longer-run objective, apart from temporary variations that largely reflect fluctuations in energy prices. Longer-term inflation expectations have remained stable.
Let’s look at another release, this one from the GAO
(Daily Caller) The Government Accountability Office warned in a report Monday that if cuts are not made to mandatory spending – including Social Security and Medicare – there will be a fundamental gap between spending and revenue as more baby boomers retire.
“Significant actions to change the long-term fiscal path must be taken,” the GAO warned.
The first line of the report warns
GAO’s simulations continue to illustrate that the federal government is on an unsustainable long-term fiscal path
Continuing the Daily Caller write-up
The GAO warned that discretionary spending is not the crux of the problem. “Discretionary spending limits [which includes defense spending] alone do not address the fundamental imbalance between estimated revenue and spending, which is driven largely by the aging of the population and rising health care costs.” (snip)
“[S]pending for the major health and retirement programs will increase in coming decades, putting greater pressure on the rest of the federal budget,” the GAO study pointed out, attributing this trend to an aging population.
While we certainly need to make cuts in discretionary spending (and, yes, the military needs to see some cuts, as well. We can start with closing bases that are remnants of the Cold War, particularly overseas, and reduce their waste and antiquated weapons systems), it is the big safety net programs that are the danger. Welfare, Social Security, Medicaid, Medicare, ObamaCare, and massive government pensions eat up more and more of the federal budget. These are promises that lawmakers have made that cannot be sustained and will drive this country further into bankruptcy.
As most of you know last week I was down in Cancun, Mexico reporting on the U.N. Climate Change Summit
In The New York Times Tamar Lewin laments the slow death of the humanities in our system of higher learning.
At a $40,000 a head fundraiser Monday night (weird how the Occupiers weren’t outside protesting) Obama said (Politico) “I’m confident