THE TICKING TIMEBOMB

I was recently criticized for using the term "ticking timebomb" to discuss the looming crisis over public employee benefit packages. As such, I will now refer to the entire entitlement structure as a ticking NUCLEAR bomb. This information comes from Congressman Paul Ryan's office:

Even before the current financial crisis occurred, the government faced a tidal wave of entitlement spending that is now at hand, as the first of the baby boomers begin to retire.
* Based on Treasury’s financial report, the government has $56 trillion in unfunded liabilities (of which $36 trillion is in one program: Medicare).
* Each year Congress fails to act, that long-term problem grows by $2 trillion to $3 trillion.
* This unsustainable rate of spending will smother the U.S. economy and sacrifice the longstanding American legacy of leaving the next generation better off.

According to the Congressional Budget Office, federal spending is projected to outpace revenue by an unprecedented $1.186 trillion this year (fiscal year 2009). That deficit will be the largest in history, more than twice last year’s deficit of $455 billion. At 8.3 percent of gross domestic product, it is also the largest deficit as a share of the economy since World War II (the previous post-war record was 6 percent in 1983). If the additional costs of “stimulus” legislation are added, the deficit rises to 12 percent of GDP.

But because that deficit is based on “current law” – assuming only enacted legislation, it does not account for additional policy actions Congress is certain to take, which will significantly increase the government’s red ink. For example, the Obama stimulus plan could add another $500 billion to the deficit. In fact, Ryan's office projects a $1.72 TRILLION deficit by the end of the current fiscal year. The National Debt exceeded $10 trillion last September. Based on CBO estimates and projected costs, the debt will increase by $2 trillion this year, to $12 trillion.

By the way, the CBO also projects the economy will shrink by 2.2 percent this year and recover only slightly in 2010, and the unemployment rate eclipsing 9 percent early next year unless the Obama administration steps in. Unfortunately, stepping in means those deficits will grow.

And I keep wondering why people like Dave Obey and Tom Petri and Jim Sensenbrenner keep being sent back to Washington over and over and over...