Fact: As of approximately 4:00 p.m. EST on April 22, 2009, the federal debt was $11,196,972,027,411.75. By the time you read this, the federal debt will have increased by several billion dollars. It has been increasing at the rate of $3,830,000,000 per day since September 28, 2007. If your stomach can take it, you can track the federal debt by clicking on www.brillig.com/debt_clock.
Fact: The national debt does not include the government’s unfunded liabilities for Social Security and Medicare benefits. In a speech delivered on May 28, 2008, Richard W. Fisher, President of the Federal Reserve Bank of Dallas, said the government’s unfunded liabilities from Medicare and Social Security come to $99,200,000,000,000. The traditional Medicare benefit represents 69% of this amount, the Medicare drug benefit represents 17%, and Social Security represents the remaining 14%.
Fact: The Obama Administration is proposing a federal government budget for fiscal year 2010 of approximately $3,500,000,000,000, which includes massive amounts of new spending for health care, education, and energy. The new budget contemplates a deficit of approximately $1,200,000,000,000. The deficit represents the difference between the amount the government will collect in revenue (primarily taxes) and the amount the government will spend. The amount of the deficit, of course, will increase the national debt.
Fact: The amount owed by the federal government equals 41% of the country’s gross domestic product. According to The Kiplinger Letter, this percentage will double by 2019. The Kiplinger Letter reports that interest on the federal debt currently represents 4.2% of government spending but will increase to 11% of government spending by 2013 and will still be headed higher.
Fact: In January 2008, the Congressional Budget Office issued a 10-year forecast that projected annual government spending would reach $4,300,000,000,000 by 2018. Kevin Hassett, writing for Bloomberg.com, points out that President Obama, who was elected in November 2008, now plans to spend an additional $550,000,000,000 annually by 2018. Mr. Hassett says President Obama is proposing that government spending over the next 10 years be $5,300,000,000,000 higher than the Congressional Budget Office projected just last year.
Fact: Despite unprecedented levels of new government spending, President Obama has promised that, “if your family earns less than $250,000 a year, you will not see your taxes increased by a single dime. I repeat: not one single dime.” President Obama, however, is proposing substantial tax increases for couples earning over $250,000 and individuals earning over $200,000. In an article on The Heritage Foundation’s website, Brian Riedl wrote, “This $1 trillion tax hike on ‘the rich’ would fall on the backs of only 3.2 million tax filers—an average tax hike of more than $300,000 per filer over 10 years on a group that is already shouldering an increasing portion of the income tax burden.”
These are among the facts that inspired several hundred thousand people in hundreds of cities across the country to take to the streets last week to protest high taxes and out-of-control government spending. These gatherings were referred to as tea parties. According to media reports, the largest tea party occurred in Atlanta, Georgia, where the crowd was estimated at approximately 20,000. The Atlanta tea party lasted from 7:00 p.m. to 10:00 p.m. on Tax Day, April 15, 2009. I was there for the first hour, and then I left. The crowd was so large I could not get close enough to see the stage. Because of the sound system, I could hear but I could not see.
The participants in the Atlanta tea party were orderly and polite. They were packed together shoulder-to-shoulder and covered several city blocks around the Georgia Capitol. The participants appeared to represent all walks of life—young, old, and middle-aged, but mostly middle-aged and probably middle class. I saw several blacks and Hispanics, but most of the participants around me were white. I heard several people say they had never before participated in a public protest. Many carried signs complaining about big government, out-of-control government spending, and high taxes. I did not hear or observe any obscene chants or gestures or see any tasteless signs like those that are common when left-wing groups are holding anti-war rallies or when unions are organizing picket lines.
As could be expected, the members of the Obama Administration and the news media were not impressed or concerned with the facts that inspired the tea parties. Instead of addressing the issues that concerned the protesters, they downplayed the significance of the tea parties and hurled insults at those who participated in them. There is a pattern with these people. They cannot stand anyone who disagrees with them, and they believe in the right to free speech only for those who share their views.
David Axelrod, a top adviser to President Obama, called the tea parties unhealthy and said the participants were misdirected. MSNBC gave airtime to Janeane Garofalo, a left-wing actress, who said the participants in the tea parties were racists and “tea-bagging rednecks.” NPR’s Nina Totenberg called the tea parties “cockamamie” and “a good stunt.” ABC’s Dan Harris said corporate interests were behind the tea parties. CBS’s Dean Reynolds said the tea parties were embraced by “a fistful of rightward leaning websites and commentators.” A so-called reporter for CNN embarrassed herself by verbally attacking one of the participants in the Chicago tea party.
Can you imagine how the media would have covered simultaneous anti-war demonstrations involving hundreds of thousands of people in hundreds of cities around the country? Do you think the coverage would have been different? You can answer these questions for yourself.
A small bit of good news followed the tea parties, but I do not think the tea parties were responsible. Earlier this week, the media reported that President Obama plans to ask members of his Cabinet to identify a combined $100 million in budget cuts over the next 90 days. This is a nice symbolic gesture, but it is basically meaningless in the big picture. Writing for National Review Online, Brian Riedl pointed out that $100 million, which sounds like a lot of money to me, represents (1) 1/40,000 of the federal budget, (2) 1/7,830 of the size of the recent stimulus bill, (3) 1/1,845 of this year’s budget deficit, and (4) the amount spent by the federal government every 13 minutes.
Referring to the $100 million in proposed budget “cuts”, Greg Mankiw, a professor of economics at Harvard University, said, “To put those numbers in perspective, imagine that the head of a household with annual spending of $100,000 called everyone in the family together to deal with a $34,000 budget shortfall. How much would he or she announce that spending had to be cut? By $3 over the course of the year—approximately the cost of one latte at Starbucks. The other $33,997? We can put that on the family credit card and worry about it next year.”
It takes a politician to use the term “budget cuts” when talking about a budget that calls for substantial spending increases. Have I “cut” my budget if I increase my overall level of spending by $20,000 but decide to cancel a magazine subscription in order to save $20? Politicians think we are stupid. They must be right because we keep electing them.
Ironically, President Obama’s request for $100 million in “budget cuts” only served to highlight the absurd level of government spending. Government spending is out of control and getting worse. The people who participated in the tea parties were making a feeble effort to call attention to a very serious problem that does not seem to concern most of our politicians and most members of the news media. Unfortunately, it will take a lot more tea parties involving a lot more people before our politicians wake up and take notice.
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