Another budget battle looms on the horizon as Congress returns from recess next week to continue work on the nation’s finances and debates whether to raise the debt limit, now at $14.3 trillion. In the last year, no single issues has captured the attention of Americans more. And for good reason. Spending and debt are skyrocketing, causing many to question what kind of course we are on. Hyper-drive spending is what last year’s elections were really all about.
To understand what that all really means — and why deep spending cuts and fiscal reforms are paramount — Americans must understand how bad the nation’s fiscal situation has gotten. Just in time for the debt limit debate, The Heritage Foundation has launched a special preview edition of its 2011 Budget Chart Book which paints a clear picture of how much the federal government is spending, how deep it’s in debt, how massive entitlement programs are, and what we pay in taxes.
Want to dive into the Budget Chart Book? Here’s a great place to start. Just this week, The Washington Post reported that all across Western Europe, countries are starting to tighten their belt and cut back on costly social welfare programs because they simply can’t afford them anymore. Countries like Greece and Portugal have suffered or are anticipating financial crises as a result of mounting debt. As our chart shows in dramatic detail, U.S. debt is, unfortunately, on track to fuel that kind of economic crisis.
Wall Street is taking notice of the problem. Last week, Standard & Poor’s lowered its outlook on the U.S. credit rating, warning that America needs to get its spending problems under control or else it’s in serious trouble. The 2011 Budget Chart Book shows just how bad that spending has gotten. See for yourself how federal spending has increased by 162 percent since 1965. Think we can fix this by just getting rid of foreign aid? See where our dollars are spent. Wonder how much we’re spending on entitlements? Check out the giant chunk Medicare, Medicaid and Social Security take out of the budget.
There are plenty of other charts, too, that fill in the blanks on how bad the budgetary picture really is. If you’ve got the post-Tax Day blues, our charts might not make you feel better, but they’ll arm you with valuable information. You can see how the total tax burden is rising to the highest level in history and visualize how the top 10 percent of income earners paid 70 percent of all federal income taxes (while 49 percent of U.S. households paid no income tax at all).
Unfortunately, these pictures aren’t pretty, but neither is the U.S. budget crisis. Some, though, just don’t get it and are insisting on borrowing more money without enacting much-needed reforms to get the government on a fiscally sustainable path. Yesterday, White House Press Secretary Jay Carney warned, “It would be terrible folly to play games with [the debt ceiling],” and Treasury Secretary Tim Geithner resorted to inflated hyperbole to warn of what’s at stake:
I mean, the idea that the United States would take the risks — people would start to believe we won’t pay our bills — is a ridiculous proposition, irresponsible, completely unacceptable risk for us to take.
Here’s an unacceptable risk: Spending keeps going up along with the national debt, and we are spiraling into an economic crisis. Yet President Barack Obama is calling for an increase in the $14.3 trillion debt limit without one single meaningful spending reform. That’s why it’s crucial to understand the facts and put vital reforms like those found in Rep. Paul Ryan’s (R-WI) budget resolution, passed recently by the House, into context. The Heritage Foundation’s 2011 Budget Chart Book will arm you with the facts you need to make sense of any discussion of the nation’s spending, taxes and debt.
Editor’s Note: Stay tuned for an updated, final version of the 2011 Budget Chart Book in mid-June. A print version of the 2011 Budget Chart Book is also available.