President Obama’s budget puts America on the path toward Greece. It is a reckless document, a stunning betrayal of U.S. economic interests. By its own numbers, Obamanomics leads to national bankruptcy. Unless there is a dramatic course correction, we will share the bleak fate of the Greeks: riots, chaos and internationally imposed austerity measures. We, too, are committing fiscal suicide.
Mr. Obama’s 2013 federal budget is a political document. It is a blueprint for Democratic governance, as well as a liberal template for Mr. Obama’s re-election. The budget embodies the entitlement state on steroids. It lavishes spending on every special-interest group – environmentalists, public school teachers, unions, government workers, the unemployed, minorities, college students and the elderly. It is full of accounting gimmicks to obscure the true extent of Washington’s deficit crisis. For example, its future projections of high economic growth rates, soaring tax revenues and supposed government “savings” are fictional and provide the illusion of fiscal competence. Yet, what matters is the budget’s real numbers regarding the administration’s record on spending during its first term.
Mr. Obama has buried America under a mountain of debt. For fiscal 2012, the budget estimates that spending will rise by $193 billion to $3.8 trillion. Think about this: The U.S. budget now stands at nearly $4 trillion – the highest level in our history. The deficit for 2012 will be $1.3 trillion, an increase from 2011. This means that for four consecutive years, Mr. Obama has racked up deficits of more than $1.2 trillion. In one term, Mr. Obama has accumulated $5 trillion in debt. Mr. Obama has achieved a historic record. He has created the most indebted nation in history. If one includes the nearly $100 trillion in unfunded liabilities to entitlements, such as Social Security, Medicare and Medicaid, the United States is on the verge of insolvency. Never mind the massive costs of Obamacare, which is another multitrillion-dollar entitlement.
Still, the president refuses to tackle entitlement reform or curb government spending – outside of savage defense cuts. Even Treasury Secretary Timothy F. Geithner recently admitted that Mr. Obama’s budget is fiscally “unsustainable.” The president’s men know he is pushing the country off a financial cliff.
European-style socialism leads to European-style taxation. Mr. Obama’s big deficits inevitably will result in huge tax increases – and not just for “the rich.” Everyone will get soaked. His plan raises taxes for anyone making more than $200,000 a year for individuals and $250,000 for families. These rates also apply to business owners. He wants to increase investment taxes on the wealthy. His plan also calls for massive tax hikes on capital gains and dividends on all Americans. Moreover, the administration is calling for a “global minimum tax,” hoping to punish companies that relocate overseas. Yet, businesses and investment capital are fleeing to escape America’s burdensome tax and regulatory policies. A minimum tax will only compound the problem, not fix it.
Mr. Obama’s redistributionist, class-warfare liberalism is shackling the private sector, punishing job creators and investors. President Calvin Coolidge said “the business of America is business.” Under Mr. Obama, the business of America is to destroy business.
The result is anemic growth, economic stagnation and permanently high deficits. By Mr. Obama’s own estimates, the budget deficit for fiscal 2013 will be $901 billion and never will fall below $575 billion in any year for the next decade. Trillions more will be added to the debt. This is a guaranteed prescription for national default.
Yet, as Mr. Obama unveiled his budget, another major fiscal event was taking place.
The Greek parliament voted to pass severe austerity measures. Desperate to receive another government bailout from the European Union – or else default on its debt obligations – Athens agreed to slash pension benefits, substantially shrink public spending, scale back the minimum wage and fire more than 150,000 government workers by 2015. Tens of thousands of angry protesters, including senior citizens, took to the streets. Riots erupted. Shops and businesses were torched. Government buildings were defaced and damaged. Downtown Athens was reduced to a hollowed-out wasteland. Greece – the cradle of Western democracy – is being torn apart, slowly descending into social anarchy.
This is America’s future.
For years, the Greeks indulged in generous entitlements and high social spending, ignoring their country’s runaway deficits and ballooning debt. Government interventionism suppressed the private economy. Tax revenue dried up. Corruption spread. Cronyism became a feature of life. Greece was transformed into a sclerotic, bloated welfare state. The bill has now come due, and present and future generations must pay for money that was borrowed – and squandered – yesterday.
This is why big-government liberalism is unsustainable and immoral. It robs our children and grandchildren to finance our reckless lifestyle.
Greeks feel cheated and betrayed. Their political leaders lied to them, selling them the false promise of economic self-indulgence and cradle-to-grave social security. The sad reality is that Greece is broke. It has become a Balkan basket case – essentially a ward of the international community. The Greeks have lost their national sovereignty, prosperity and – above all – their dignity.
Mr. Obama is applying the Greek model to America. In three to four years, if current trends continue, Americans will find themselves in the exact same position as the Greeks – bankrupt, betrayed and bewildered. Global creditors will demand that severe and swift austerity measures be imposed upon us. Riots and civil upheaval will ensue. Mr. Obama’s real legacy is to ensure that America’s fate will be just like that of Greece: Two budgets, two disastrous courses leading to national upheaval.
* Jeffrey T. Kuhner is a columnist at The Washington Times and president of the Edmund Burke Institute.