As it is when a country is at war, other important matters go unnoticed. This is certainly true when it comes our federal government’s finances.
Congress just passed a $2.9 trillion dollar budget plan for the fiscal year starting October 1, 2007. The bill is a blueprint for Congress to follow this year as it writes tax and spending legislation for next year. And, the Democrats put their stamp on the federal budget.
The measure would increase spending for favorite Democratic programs, such as education, community development grants and veterans’ medical care. However, the Republicans faulted the plan for failing to allow for looming shortfalls in benefits programs such as Medicare, Social Security and Medicaid.
Spending on these senior citizen programs increases automatically with inflation and as new beneficiaries become eligible. With the first of the baby boomers set to begin retiring next year, the rolls of recipients will climb rapidly. Some studies show Medicare, Social Security and Medicaid payouts bankrupting the federal government by 2030.
Although the plan calls for a small surplus by 2012 although, it would increase deficit over the next few years. But, don’t make any bets that a surplus will be achieved in 2012. Projected surpluses have a way of disappearing as forecasts give way to reality.
Besides, when it comes to the federal deficit, the books are cooked.
The best way to see what the federal government is actually doing is to monitor the official debt. On January 1, 2000, the official federal debt stood at $5.78 trillion; today it is about $8.71 trillion, nearly a 51% increase in less than eight years, with no end in sight to increases in federal spending.
And, have you noticed that the financial state of affairs of the federal government is NOT an issue in the embryonic presidential campaign? How can the problem be addressed if it is not even recongized by the presidential candidates?