"Why does Obama want to institutionalize perpetual borrowing
from the Chinese, Saudis, and Japanese?" – ALG President Bill Wilson
January 26th, 2010, Fairfax, VA—Americans for Limited Government President Bill Wilson today called upon the U.S. Senate to reject a $1.9 trillion increase in the national debt ceiling, which would bring the national debt limit to $14.29 trillion.
The call came amid an Obama Administration proposal to "freeze" spending expected to be unveiled at tomorrow's State of the Union Address, which Wilson called "nothing more than window-dressing to disguise the unpayable debt the nation faces."
"Barack Obama is completely disconnected from reality. He is ready to show up at the State of the Union Address promoting his 'spending freeze' program, which will do absolutely nothing to pay off the $12 trillion national debt," Wilson said.
"Simultaneously he is prepared to sign legislation that will actually increase the national debt by some $1.9 trillion," Wilson noted, adding, "The American people are simply not that stupid. This is just one more reason why Obama's believability is in the toilet."
According to the Washington Post, "the freeze would shave no more than $15 billion off next year's budget — barely denting a deficit projected to exceed $1 trillion for the third year in a row."
Wilson said "The immediate effect of the spending 'freeze' will be to freeze into place, and institutionalize, the record-setting $1.4 trillion deficit," Wilson explained, adding, "which is not the sort of freeze the American people support."
Wilson asked of Obama prior to his first State of the Union Address, "Why does Obama want to institutionalize perpetual borrowing from the Chinese, Saudis, and Japanese?"
Wilson said the "real solution is to draw down entitlement spending, balance the budget, and pay off the debt."
According to an Americans for Limited Government analysis of Office of Management and Budget (OMB) data, annual entitlement spending has grown from $386.4 billion in 1992 (27.98 percent of budget outlays totaling $1.381 trillion) to $1.36 trillion in 2009 (38.17 percent of budget outlays totaling $3.653 trillion). (Sources: www.gpoaccess.gov/usbudget/fy10/pdf/hist.pdf, and http://www.whitehouse.gov/omb/asset.aspx?AssetId=1702.)
According to OMB data, entitlement spending as a percent of budget outlays will continue to increase, while defense spending will decrease. In 2019, OMB projects that entitlements spending will stand at $2.482 trillion (45.93 percent of outlays totaling $5.403 trillion).
Meanwhile, interest payments on the $12 trillion debt are set to increase drastically. According to the New York Times, "the White House estimates that the government's tab for servicing the debt will exceed $700 billion a year in 2019, up from $202 billion this year, even if annual budget deficits shrink drastically."
In a recent column, Wilson wrote that "as interest repayments grow exponentially, the debt will not shrink. In fact, the national debt has grown every single year since 1958. And the government projects that trend will continue unabated for the next decade."
Wilson recently said that the growth of the debt could be directly correlated and shown to be caused by the growth of entitlements. The national debt has grown by over 295 percent since 1992, and will have grown by over 492 percent by 2020. Entitlement spending has grown by over 351 percent since 1992, and will have grown by over 642 percent by 2020.
"Entitlement spending is the greatest contributor to the growth of the national debt because it is growing at an even faster pace than the budget as a whole. That means it is, without a doubt, the most uncontrolled, profligate, unaffordable and unsustainable portion of the budget," Wilson explained.
Currently, the national debt stands at over $12 trillion and is projected to top the Gross Domestic Product (GDP) in 2011 at over $14 trillion. By 2020, it will top $20 trillion.