The new budget outlook published by the Congressional Budget Office contains disturbing news about federal deficits. Even given the questionable assumption that the economy will grow faster this year than last, Uncle Sam is now projected to spend $544 billion more than he takes in during fiscal 2016.
That's up a lot from last year's $439 billion, and on its way to more than $1 trillion a year by 2022, the CBO warns.
This is not due entirely to more spending or the economy's lugubriously slow growth, which depresses tax revenues. It's driven partly by recent tax changes. Congress made several tax breaks permanent that had technically been temporary but were repeatedly renewed and so, effectively, permanent already.
This change in accounting has freed the non-partisan CBO to tell the truth, as it had not been for many years. And the truth is ugly. The new figure puts the lie to oft-heard claims from Obama and his acolytes about rapidly shrinking deficits since 2009.
The real reason deficits have shrunk is that what goes up must come down. The unprecedented economic interventions by the late Bush and early Obama administrations — bailouts and stimulus spending especially — were one-time events that drove deficits into the stratosphere. That they sank back toward the mean is not a sign of real deficit reduction, any more than a family can congratulate itself on its frugality because it bought a car last month and then didn't buy a car this month.
A quick comparison of deficits from 2006 ($248 billion) and 2016 (again, $544 billion) demonstrates that Washington and the nation are appalling spendthrifts.
It isn't just because of waste in the government's ordinary programs. Mandatory spending on retirement and health benefits beyond Congress's routine annual control, will consume 73 percent of all government revenues. Every annual appropriation, including the entire defense budget and all of the other agencies' funding, must come either from the remaining quarter of revenues or else from more borrowing.
The federal budget is thus structurally crippled. Worse, its most malign effects are only just beginning. The various entitlement trust funds, which in truth are empty, are about to start paying out more than they bring in on aggregate.
So Washington cannot properly be compared to a family that spends too much on luxuries. Rather, it is the family that foolishly bought far more house than it could afford, and is now saddled with a mortgage that cuts deeply into its budget for groceries.
No amount of belt-tightening on ice cream could produce the funds needed to service the debt. The federal government must reform entitlements. This will enormously difficult, given that both the leading contender for the Republican presidential nomination and all the contenders for the Democratic nomination are on record opposing the only measures that could set the national accounts right. The House Speaker, Paul Ryan, was willing to present a workable plan to get America out of its fiscal mess several years ago. What the country needs now is president with the same courage. In fact, the country cannot afford to elect anyone who lacks it.