The Tea Party Must Fight For Economic Growth
By Louis R. Woodhill
June 30, 2014
The Tea Party movement (TPM) began as a spontaneous uprising against federal government overreach. Like all true grass roots movements, the TPM is inchoate, unfocused, and disorganized. Politicians have tried to harness TPM energy to help win elections and/or further their agendas, with mixed results to date.
The TPM is Jacksonian (after Andrew Jackson) in its impulse. Those Americans whose life plan calls for working and providing for themselves and their dependents tend to be Jacksonians. They believe that a growing federal government, and especially an ever-expanding federal welfare state, means diminished prosperity and prospects for people like them. And, they are right.
The TPM was a reaction to the federal bailouts of banks and auto companies in late 2008 and early 2009, President Obama’s early-2009 “stimulus” bill ($842 billion), and Obamacare (2010). However, a major source of public anxiety and TPM energy was the publication by the Congressional Budget Office (CBO) of its “Long Term Budget Outlook” (LTBO) on June 30, 2010.
The 2010 LTBO forecasted (fiscal) Armageddon, with federal debt as a percent of GDP rising from 62% in 2010 to 947% in 2084. The CBO forecast produced responses ranging from futile (the Simpson-Bowles “Chairmen’s Report”) to politically disastrous (Paul Ryan’s 2011 budget plan).
Now, let’s fast-forward three years, to the CBO’s September 2013 LTBO (which is their most recent long-range projection).
In the CBO’s “Alternate Fiscal Scenario” case (which they consider much more likely than their “Extended Baseline” case, which assumes politically implausible spending restraint), America’s (fiscal) world comes to an end, as shown in the chart below.
Read the rest at Forbes Magazine's Unconventional Logic Blog.