Vice President Biden is absolutely right -- this election (I hope) is a stark choice, between continuing over the looming fiscal cliff with the Obama administration or (possibly) taking the painful medicine needed to get the nation's fiscal house in order. Neither route will be pleasant; both will no doubt be painful in the extreme.
To reiterate a few of the key the "inconvenient truths" we face:
The federal debt now stands at just about $16 TRILLION dollars, growing at just under $4 BILLION per day. That is more that 100% of the nation's gross domestic product ($15 Trillion at the end of 2011). Economists generally think that sovereign debt of more than 80% of GDP is in the danger zone -- we are already well past that.
On the Obama administration's current budgets proposals, this is projected to grow to about $23 TRILLION by the end of his (possible) second term. This administration has proposed NOTHING to reduce the debt -- in fact they have continued to increase it.
We currently borrow about 40% of each year's federal budget, which is what is driving the ballooning federal debt. So far the Euro crisis has kept lenders buying Treasury notes as a safe haven. When that crisis ends, the bond markets are likely to push the interest rates up sharply, costing us even more to service the debt, which currently costs us about $450 Billion per year.
Medicare, Medicaid and Social Security currently consume about 42% of the federal budget ($1.6 Trillion out of a federal budget of $3.8 Trillion in 2013) . These programs are contributing more to the ballooning federal debt than any other program. Current projections show these programs consuming ALL federal income by about 2045. This is driven in part by the bulge of baby boomers who are now retiring.
So the "stark choice" is between continuing to ignore these facts (the Obama administration) until we hit a Greek-style crisis, or (possibly, if Romney-Ryan have the political will) beginning to make the painful cuts that are essential.
These cuts WILL come.The only choice is whether we wait for the inevitable crisis or we begin to solve the problem before it becomes a crisis. Either route is painful.. Either route will change "Medicare as we know it", as Obama claims in his ads. But one route will be a lot more chaotic, painful and unfair than the other.
But the question is: are American voters smart enough and willing enough to suffer the painful cuts and withdrawal from Federal handouts, or do we all want the band to keep playing until the Titanic sinks under the waves?
It is indeed a stark choice.
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