"Why The House GOP's Budget Resolution
Hides A $4.4 Trillion Deficit Fraud"
by David Stockman
Excerpt: "What in the hell are these GOP fiscal frauds thinking? The whole point of the 1974 budget act and its mechanism of budget resolutions and reconciliation instructions was to enable elected politician to curb their propensity to spend and borrow, and to thereby put an effective lid on the public debt. A half century latter, however, the House Republicans are making a sheer mockery of the act with a resolution which actually instructs four leading House Committees to do the opposite. That is, to RAISE the deficit by $6 trillion over the next decade!
You can’t make this up! Here are the GOP’s budget resolution "instructions" for massive amounts of more red ink. House GOP’s Deficit Increase Instructions–Next 10 Years:
• Ways and Means Committee for tax cuts: +$4,500 billion.
• Judiciary Committee for crime and border control: +$110 billion.
• Armed Services Committee for Pentagon increases: +$100 billion.
• Homeland Security Committee for border control: +$90 billion.
• Implied higher interest expense: +$1,200 billion.
• Total Deficit Increase: +$6.0 Trillion.
We will get to the largely phony spending cuts and "economic growth" offsets in a moment, but the larger point here is the grotesque insanity of ordering $6 trillion more of red ink, which would come on top of the $22 trillion of cumulative deficits already built into the baseline for the next decade.
That is, even before counting the new flood of red ink depicted above, today’s $36 trillion public debt would be nearly $60 trillion by the end of the current 10-year budget window; and by the lights of CBO’s rosy scenario, which says the US economy will be recession-free, inflation-free, interest rate flare up-free, energy crisis-free and otherwise performance perfect for the next 25 years, the public debt would hit a staggering $150 trillion by mid-century.
In other words, we are not dealing with a tad too much borrowing or chronically lax fiscal discipline. What is built-in now is a veritable fiscal doom-loop under which soaring debt fuels an eruption of annual interest expense, which, in turn, drives the public debt and interest expense higher still.
During FY 2026, in fact, Federal interest expense will exceed $1.0 trillion and absorb 18 cents from every dollar of Federal revenue. But that interest expense ratio will hit 22 cents per dollar of revenue by 2035 and nearly 40 cents per revenue dollar by 2052.
Of course, the chart below will never happen this smoothly in the real world. Once it is clear to the bond markets that the Fed can no longer monetize massive gobs of US Treasury paper without re-accelerating inflation, bond yields will lurch skyward, far above the 3.4% average yield embedded in the chart below.
In turn, even another 250 basis points of average treasury yield (i.e. to 5.9%) would nearly double debt service to $3.3 trillion per year or to 41 cents on the dollar of revenue by 2035. And thereafter financial catastrophe would be virtually guaranteed.
What this means, of course, is that any political party with even a modicum of fiscal responsibility would write a budget resolution that unequivocally and sharply reduces these baseline deficits for each and every year during the 10-year budget window ahead, and do so through sweeping spending cuts and minimally disruptive revenue gains.
For crying out loud. In light of the debt service chart below alone, the very idea of mandating jurisdictional committees to add even one dime to the baseline deficits, to say nothing of $6 trillion, is a sign of the degree to which the House GOP has degenerated into rank foolishness and cowardice."
Full article is here:
As the Mogambo Guru said, "We're so freakin' doomed!"
And we are, oh yes we are...
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