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A fiscal nightmare of government's creation

| Sunday, Oct. 7, 2012, 8:57 p.m.

The way the federal government runs things already is bad enough, but it'll just get worse in the years ahead, according to the government's own top-level number crunchers.

In fiscal year 2011 — Oct. 1, 2010, to Sept. 30, 2011 — the Congressional Budget Office (CBO) reported that the federal government spent $3.6 trillion, or 24 percent of the gross domestic product ­— 24 percent of the monetary value of all the goods and services produced in the United States in that year, the highest federal-spending-to-GDP ratio since World War II.

Federal outlays averaged 19.6 percent and 19.8 percent of GDP, respectively, during the George W. Bush and Bill Clinton administrations.

The CBO reports that total federal tax revenues in fiscal year 2011 were $2.2 trillion, against $3.6 trillion in spending, producing a shortfall of nearly $1.4 trillion in red ink — a $1.4 trillion deficit added to the federal debt and paid for by borrowing and delivering the bill to future taxpayers.

Social Security payouts by the federal government in fiscal 2011 totaled $731 billion. Another $769 billion was paid out in federal benefits during the same period in three health insurance programs — Medicare, Medicaid and the Children's Health Insurance Program. An additional $230 billion went for interest payments on the federal debt.

In just these three categories — Social Security, the aforementioned health insurance programs and interest payments on the debt — federal payouts consumed 79 percent of the total tax revenues collected by the federal government in fiscal 2011.

Add the $159 billion that was spent in fiscal 2011 on the lost causes in Afghanistan and Iraq and the 79 percent increases to 86 percent.

That doesn't leave much money for everything else, just 14 cents out of each dollar collected in federal taxes to cover the cost of bridge repairs, tunnels to casinos, small business loans, highways, free cell phones, aid to Syria, mail trucks, tuition assistance, medical research, aid to Pakistan, food stamps, American military bases in 109 countries, citizen surveillance, veterans benefits, aid to Egypt, subsidized Amtrak sandwiches, urban renewal, job training, farm aid, federal weather balloons, environmental grants, airport body scanners, day care, solar handouts, rent subsidies, Head Start, federal payroll, congressional junkets, subsidized lunches and development of a missile-defense system.

But it gets worse, with the 14 cents falling to zero by the time today's first-graders are seniors in high school, according to a CBO analysis.

By 2025, according to the CBO forecast, payments to Social Security, Medicare, Medicaid and interest on the national debt will exceed the total of all federal tax revenues.

With no tax revenues left for anything else, we'll be stuck buying mail trucks and body scanners with Chinese money.

More optimistically, another scenario from the CBO says we can cut the red ink by squeezing doctors. The only problem is that a recent survey by the Doctor Patient Medical Association reveals that 83 percent of physicians are thinking of quitting because of ObamaCare.

So a visit to the doctor's office might be cheap, except no one will be there, just a chair and some old magazines.

The Chinese had a similar idea back during the Great Leap Forward. The idea was to remove greed from farming. It ended with people eating the bark off trees and millions dead from starvation.

Ralph R. Reiland is an associate professor of economics at Robert Morris University and a local restaurateur. Email:

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