America's Alternate Economic Reality

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American Spectator:

Despite enormous federal spending, deficits, and debt, many Americans remain relatively unconcerned. With evidence of uncontrolled debt's consequences so clear in Europe, how can so many so easily ignore it at home? The answer is that competing economic realities divide America, obscuring our fast-approaching tipping point.

Under the President's own budget and estimates, the deficit this year will be $1.327 trillion. If correct, this will be the fourth consecutive budget deficit over $1 trillion and the highest deficit since 2009. Prior to this, America had never had one deficit over $1 trillion.

This year's $1 trillion-plus deficit will amount to 8.5 percent of GDP. Excluding those of the previous three years, it will be the largest since WWII. Under the President's own assumptions, the deficit will not fall below 2.7 percent of GDP -- and not reaching that until 2018 -- in any year of the next decade. As recently as 2007, the deficit measured just 1.2 percent of GDP.

Under the President's own budget and own estimates, the size of government never drops below 22 percent of GDP -- meaning government will consume almost a quarter of all America produces for the foreseeable future. Excluding the previous three years, the budget's lowest level would be the government's highest in 20 years.

Finally, under the President's own budget and estimates, debt held by the public will reach $11.6 trillion this year -- double 2008's $5.8 trillion level.

Prior to the recession, such levels of spending, deficits, and debt were unthinkable. During the recession, they were seen as unavoidable. Now, many seem to believe them acceptable. How can so many not see spending and debt's danger? It is not unseen, but rather seen through an alternate economic reality.