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Math is Hard. If You Are The President, That Is

Home - by Lori Ziganto - November 24, 2009 - 19:26 UTC - 11 Comments

Good News! Obama may not be mortgaging our kids future into bankruptcy! Bad news: He’s already mortgaged ours!  Obama proves once again that basic math is beyond his scope. Anyone who has a mortgage or, you know, can balance a checkbook would have seen this coming. Not Obama!

Wave of Debt Payments Facing U.S. Government

WASHINGTON — The United States government is financing its more than trillion-dollar-a-year borrowing with i.o.u.’s on terms that seem too good to be true.  But that happy situation, aided by ultralow interest rates, may not last much longer.

Treasury officials now face a trifecta of headaches: a mountain of new debt, a balloon of short-term borrowings that come due in the months ahead, and interest rates that are sure to climb back to normal as soon as the Federal Reserve decides that the emergency has passed.

Even as Treasury officials are racing to lock in today’s low rates by exchanging short-term borrowings for long-term bonds, the government faces a payment shock similar to those that sent legions of overstretched homeowners into default on their mortgages.

I’m just a chick from the sticks like the Left likes to call Sarah Palin, but even I know that you don’t spend more than you earn and you don’t take out what amount to be ARMs on the “hope” that your income will magically double before the rates go up. It’s how I somehow managed to escape all those nefarious predatory mortgage lenders by renting and not entering into loans that I couldn’t afford (I also escaped tonsil reapers. I might be a witch, as, apparently this is unheard of.)

With the national debt now topping $12 trillion, the White House estimates that the government’s tab for servicing the debt will exceed $700 billion a year in 2019, up from $202 billion this year, even if annual budget deficits shrink drastically. Other forecasters say the figure could be much higher.

In concrete terms, an additional $500 billion a year in interest expense would total more than the combined federal budgets this year for education, energy, homeland security and the wars in Iraq and Afghanistan.

Last night, Obama had a meeting on strategy in Afghanistan and the chief of the White House Office of Management and Budget was in attendance. Dude, not only is that a case of instituting a sexual harrassment policy AFTER you’ve already hired David Letterman, but why on earth would you choose A WAR to start pinching pennies?

Not to mention the trillions of dollars the arguably unconstitutional take-over of our health care system will cost. Hey, maybe Sen Landrieu could give back her $300 million vote pay-off to offset some of this debt? Now THAT would be a ‘happy ending’ with which I could get on board.

The timing is a perfect poopstorm as well, which, again, anyone who has run even just a household budget should have realized. The baby boomers are all coming of retirement age. Hello, utter and complete drain on Social Security and Medicare!  Has the Smartest Man Alive planned for this? Of course not, old people aren’t hip (and if they break one under Obamacare, too bad!)  nor part of his cult of personality. He probably plans to just give them all a little blue or red pill and send them on their way.

“What a good country or a good squirrel should be doing is stashing away nuts for the winter,” said William H. Gross managing director of the Pimco Group, the giant bond-management firm. “The United States is not only not saving nuts, it’s eating the ones left over from the last winter.”

The rest of the news that the article divulges is just as devastating and anger-inducing. It boils down to this:

Americans now have to climb out of two deep holes: as debt-loaded consumers, whose personal wealth sank along with housing and stock prices; and as taxpayers, whose government debt has almost doubled in the last two years alone, just as costs tied to benefits for retiring baby boomers are set to explode.

The competing demands could deepen political battles over the size and role of the government, the trade-offs between taxes and spending, the choices between helping older generations versus younger ones, and the bottom-line questions about who should ultimately shoulder the burden.

I’m looking forward to showing them which side of the “battle” we are on and which strategy must win in 2010.  For us and For The Children ™ (unlike the Left, we don’t use children as a political prop. We actually care about their future.) Then, instead of change the government keeps taking more and more of, it really may be change we can believe in.

(maybe Obama should look at purty pictures like this graph (click to enlarge). Perhaps it would make math easier and less icky for him)

(h/t DPunch Tosst Salad)