Borrowing, Spending and Regulating, Oh my!

By Alan Caruba

It sometimes seems to me that the Congress and the White House are determined to put an end to the nation through a combination of exorbitant borrowing and insane spending.

At the end of May, an article in USA Today reported that “The government took on $6.8 trillion in new obligations in 2008, pushing the total owed to a record $63.8 trillion.”

These trillions reflect various retirement benefits such as Social Security, Medicare, Medicaid, and the new prescription medicine benefits. Then there are programs to aid Americans who have lost jobs, are behind on their mortgage payments, or just want to buy a new car by declaring their old one a “clunker.” When you add in the so-called “stimulus” bill, the bailout of General Motors, and the TARP bailout to financial and insurance firms, it adds up.

Robert Samuelson, a syndicated columnist, asked in May “Just how much government debt does a president have to endorse before he’s labeled ‘irresponsible’?”

While facing $63.8 trillion in obligations, Samuelson noted that “From 2010 to 2019, Obama projects annual deficits totaling $7.1 trillion; that’s atop the $1.8 trillion deficit for 2009.” It doesn’t stop there, however, “Obama’s health plan might cost $1.2 trillion over a decade; he has budgeted only $635 billion.”

Did President Obama and every member of Congress flunk arithmetic in grade school? How can they possibly believe that the actions they have taken and presumably intend to take with regard to an insane healthcare reform and massive tax on all energy use add up to anything than the total financial failure of the United States?

It adds up, according to USA Today, to “an extra $55,000 a household to cover rising federal commitments made just in the past year…” I don’t know about you, but I don’t have $55,000 to spare. The economy has pretty much wrecked any plans I made to earn enough to cover my present expenses.

According to the Investor’s Business Daily, “American families over the last year already lost 8% of their net worth—in part as a result of inept government meddling, past and present.”

The result will be “Near-record deficits increasing at record rates (that) will push the public debt of the U.S. beyond the economy’s plausible capacity to pay—70% of GDP (Gross Domestic Profit) by 2012, heading quickly to 82% of GDP in 2019 and on pace to be astronomically higher soon thereafter.”

As someone who thanks a merciful God for the ability to check my checking and savings accounts’ balances via the Internet, all these enormous numbers and percentages tend to make my head spin. I understand them in the abstract, but I can barely get a grip on them in terms of the vast amounts of money they represent.

There are, however, still other numbers that are strangling the nation’s capacity to somehow get out of this mess.

For several years, Wayne Crews of the Competitive Enterprise Institute has taken an annual look at the growth and the cost of federal regulations. He deserves to be beatified for this task. They are published in a report titled “Ten Thousand Commandments: An Annual Snapshot of the Federal Regulatory State.” On June 3, the latest report made its debut. Here’s a snapshot of how a nation strangles to death on regulations:

Federal agencies issued 3,380 new rules in 2008. Federal regulations ate practically 10% of what the U.S. economy produced last year. At $1.172 trillion, the cost of regulation is nearly equal with $1.2 trillion in income taxes.

Regulatory costs are a huge hidden tax. The federal government spent $2.98 trillion in 2008 and businesses spent more than a third of that amount on regulatory costs.

Crews points out that, “Rolling back regulations would constitute the deregulatory stimulus that the U.S. economy needs.

We’re all on this roller coaster together and there can be no happy ending to the ride.