For Immediate Release: January 8, 2006 Contact: Ian Mathias 410-864-1652 imathias@agorafinancial.com
Bush’s New Plans for Balanced Budget are “Too Little, Too Late”
Baltimore, MD: President Bush, the same man who presided over the creation of more national debt than any president in U.S. history, announced last week that the time had come to “make sure we spend the people's money wisely.” The president then unveiled his plan to install a new federal budget early next month that will ultimately eliminate the federal deficit by 2012. After carefully examining the President’s 2007 Budget Report, one expert on U.S. debt calls this latest cry for fiscal restraint little more than “lip service to one of the greatest threats to the national future.” “After listening to President Bush’s press conference,” commented Addison Wiggin, author of NY Times bestseller Empire of Debt, “I doubt that his proposed budget will have a serious impact on our national debt...even if he is able to pull it off.”
Wiggin noted first that, according to White House projections, the Bush administration had quietly put the U.S. $423 billion in the red in 2006, a substantial 3.2% of the GDP. A core component of Bush’s new proposal is his intent to bring the national deficit down to almost half of its 40-year average by 2009. That average, 2.3% of the GDP, is a level he himself has been unable to attain during his stay at the White House. Chopping the deficit down to the target 1.4% is ambitious. Even if Bush and the new Congress are able to turn over a new leaf, Wiggin commented, “His projections make no sense. In fact, they are too little, too late.”
If President Bush is able to completely reverse the trend of his administration’s wild spending and reduce the deficit to a projected 1.4% of the GDP by 2009 and balance the deficit by 2012, the national debt crisis would be in no way solved.
“The truth is, if everything goes exactly as Bush plans, we will still be nearly $10 trillion in debt by 2012 – $1 trillion more than we are today,” said Wiggin. Wiggin also noted that none of those statistics include unfunded liabilities like Social Security, Medicare, and Medicaid (which former Treasury Secretary Paul O’Neal estimated to be well above $44 trillion) or “off-budget” expenses for the wars in Iraq and Afghanistan.
“This new budget will have a lot more to do with posturing and political positioning than actual fiscal restraint,” Wiggin warned, “and will have nothing to do with addressing the national debt.”
Addison Wiggin is the editorial director of The Daily Reckoning, a daily, free e-letter that weaves information about the financial world, investing, and everyday life into an educational and entertaining format. Along with Bill Bonner, Wiggin is the author of Empire of Debt - a New York Times Bestseller that draws attention to the ever-rising U.S. debt crisis. He also serves as the executive publisher of Agora Financial, a multi-million dollar financial research firm and publishing group based in Baltimore, Maryland.
Source: www.dailyreckoning.com
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