Smith Faculty Opinion Article
The 30 Seconds Outlook
January 1, 2012
“Amazingly, the U.S. government has now accumulated a total debt of 15
trillion dollars. When Barack Obama first took office the national debt was
just 10.6 trillion dollars.”
- Michael T. Snyder, Seeking Alpha, December 19, 2011
Our Future with Continued Growth in Government and
Spending
1. Government spending will rise from 23% of GDP in 2010 to 35.2% in 2035.
2. Government revenue will rise from 15% of GDP in 2010 to 19.3% in 2035.
3. The budget deficit will increase from minus 9% of GDP in 2010 to minus
15.9% in 2035.
4. Government borrowing is 40% of each dollar it spends.
5. Government debt is nearly 70% of GDP and climbing to 100% by end of this
decade.
6. The three largest entitlements represent 43% of government spending and
10.3% of GDP.
Some Results
1. Economic growth will remain below the long-term trend and, finally,
collapse.
2. Living standards will decline for our grandchildren.
3. The growth in government debt is unsustainable and will lead to a further
devalued dollar and much higher interest costs.
4. To pay current entitlement promises would require a doubling of tax rates.
5. To currently fund (unfunded) Social Security and Medicare programs to meet
future promises would require $40 trillion.
Your choices are to: (1) continue towards a state controlled economy with
higher taxes, lower economic growth and reduced freedoms, or (2) return to a
constitutionally limited government with lower taxes, increased individual
incentives and freedoms, and higher economic growth.
John A. Haslem
