Spending Daily | July 30, 2012

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Bankrupting America’s Cartoon Highlighting National Debt

As seen in Politico’s Morning Money  “MONDAY FUNNIES – Bankrupting America has a new cartoon using the Olympics to highlight the size of the U.S. debt: http://bit.ly/MNMfAR.”
Entitlements leaving us with “an infrastructure unfit for a 21st-century economy”
In a New York Times editorial, Bill Keller examines a study on entitlement spending in the U.S. by Democratic think tank Third Way. He writes, “In 1962, we were laying down the foundations of prosperity. About 32 cents of every federal dollar, excluding interest payments, was spent on investments, only 14 percent on entitlements. In the mid-70s the lines crossed. Today we spend less than 15 cents on investment and 46 cents on entitlements. And it gets worse. By 2030, when the last of us boomers have surged onto the Social Security rolls, entitlements will consume 61 cents of every federal dollar, starving our already neglected investment and leaving us, in the words of the study, with ‘a less-skilled work force, lower rates of job creation, and an infrastructure unfit for a 21st-century economy.'”
$1 Trillion Deficit for 5th Straight Year
The Washington Times reports, “The federal government will flirt with its fifth-straight trillion-dollar deficit next year and is still on track to notch $25 billion in debt within a decade, the Obama administration predicted on Friday as it released an update of the country’s fiscal picture. Spending in 2012 is actually running at a slower pace than the White House predicted in February, but will still reach $1.2 trillion — a fourth straight year. And the deficit for 2013 is now projected to be $991 billion, which is nearly 10 percent deeper than President Obama predicted in February when he sent his budget to Congress.”
Healthcare Law Does Little to Address Doctor Shortage
The New York Times reports, “The Association of American Medical Colleges estimates that in 2015 the country will have 62,900 fewer doctors than needed. And that number will more than double by 2025, as the expansion of insurance coverage and the aging of baby boomers drive up demand for care. … Experts describe a doctor shortage as an ‘invisible problem.’ Patients still get care, but the process is often slow and difficult. … Moreover, across the country, fewer than half of primary care clinicians were accepting new Medicaid patients as of 2008, making it hard for the poor to find care even when they are eligible for Medicaid. The expansion of Medicaid accounts for more than one-third of the overall growth in coverage in President Obama’s health care law.
Unemployment to Remain High for a Decade
Politico reports, “The numbers that have the White House projecting an unemployment rate dipping below 8 percent before November still show the economy struggling to recover until well after the next presidential election, with rates not expected to stabilize to pre-recession levels until after the second term President Obama is hoping to win. …The OMB, in its Mid-Session Review to Congress released Friday, projects unemployment will drop gradually, to 7.7 percent in 2013, 7.3 percent in 2014, 6.7 percent in 2015, 6.2 percent in 2016, 5.7 percent in 2017 and remaining at 5.4 percent from 2018 to 2022.”
Euro Zone a Sinking Ship
Reuters reports, “Over the past couple of years, Europe has muddled through a long series of crunch moments in its debt crisis, but this September is shaping up as a ‘make-or-break’ month as policymakers run desperately short of options to save the common currency. … “‘In nearly 20 years of dealing with EU issues, I’ve never known a state of affairs like we are in now,’ one euro zone diplomat said this week. ‘It really is a very, very difficult fix and it’s far from certain that we’ll be able to find the right way out of it.’ … The euro zone does not seem to have enough cash in the current setup to deal with a scenario of Spain and Italy needing a rescue, and a sense of doom is growing among some policymakers. Fighting the crisis, said the euro zone diplomat, is like trying to keep a life raft above water. ‘For two years we’ve been pumping up the life raft, taking decisions that fill it with just enough air to keep it afloat even though it has a leak. But now the leak has got so big that we can’t pump air into the raft quickly enough to keep it afloat.'”
Uncertainty Yields Severe Economic Pessimism
In The Washington Post, Robert J. Samuelson editorializes, “Just as ‘irrational exuberance’ drove the economic boom, so the bust is sustained by an almost-pathological and self-fulfilling pessimism. The unspoken faith in economics — that governments could prevent another Great Depression and ensure that recessions, though unavoidable, are limited — has given way to profound skepticism. … Low confidence will subvert recovery; an aborted recovery will subvert confidence. Whoever wins in November will face this cycle. His challenge will be to break it.”
Spending Cuts Showdown
Roll Call reports, “There’s no doubt that in the coming months, lawmakers will issue breathless warnings about the looming ‘fiscal cliff.’ But what is in question is who will win a policy and political battle that’s played out in déjà-vu-like ways during the past two years — if anyone can win at all. Although sequestration, the automatic across-the-board discretionary spending cuts set to kick in starting in January, is the name of the current game, Democrats and Republicans are preparing to articulate their differences using talking points on revenues and spending cuts they’ve honed this Congress through a series of fiscal crises largely of their own making. And with relatively few legislative days left between now and the elections, and very little feasible legislation to be done anyway, lawmakers will yet again spend most of their energy talking about revenues, spending cuts and fiscal solvency.”
Public Notice Research and Education Fund Launches $1.2M Campaign Urging Debt Reduction
 Public Notice Research and Education Fund (PNREF) on Friday announced a national advertising campaign urging Washington to focus on debt reduction as the national debt approaches $16 trillion. The more than $1.2 million campaign will run until Friday, Aug. 3, and will include national cable as well as online advertising. The ad, titled “Washington is Still Digging,” will air on A&E, Bloomberg, CNN, Discovery, Fox News, History, Lifetime, MSNBC and USA. Click here to view the ad.

Gretchen Hamel, president of Public Notice Research and Education Fund, commented, “The national debt has become a national disgrace made even worse by Washington’s steadfast refusal to agree to a long-term strategy for fiscal responsibility. While our elected officials are content to play political games, the weight of the debt on our economy grows heavier.”