(Alexandria, VA) -- The 362,000 National Taxpayers Union (NTU) this week released an Issue Brief recommending that taxpayers watch out for President Obama's "scoring," and we don't mean on the basketball court. The "scoring" NTU is talking about is how much money Obama's budget blueprint will cost the taxpayer: a cumulative debt that will reach more than $21,000,000,000,000 ($21 trillion) within ten years, at a service cost that could run over $15,000,000 ($15 trillion) over the same period.
NTU's Director of Government Affairs Andrew Moylan, who authored the brief, calculated a "score," similar to what the Congressional Budget Office uses to determine the cost of individual pieces of legislation, for the cost of financing the staggering budget deficits contained in President Obama's budget outline. According to the Congressional Budget Office's estimates, President Obama's plan assumes the federal government will spend nearly $9.3 trillion more than what is expected in revenue over the next decade. In case this figure is too difficult to fathom, it's roughly equal to the total amount of debt our nation accumulated from 1791 through the beginning of February 2008.
But Americans don't get off the hook simply by being forced to underwrite the whopping $9.3 trillion in new debt; that figure doesn't even include the interest to be incurred on the amount. Taxpayers will also have to foot the bill for interest on more than just the $9.3 trillion in debt we would rack up under Obama's budget outline; we have to pay interest on the existing debt $12 trillion debt as well. Assuming the existing overall debt-finance interest rate of 3.19 percent holds, the current and future debt will cost $5.4 trillion to finance over the space of ten years. This rate, however, is low by historical standards. If the rate averaged out at 6 percent, the debt service bill would rise to $10.18 trillion. Since debt-interest rates have in the past run much higher, Moylan also calculated an amount based on 9 percent. The result: a staggering ten-year, $15.27 trillion finance cost.
As Moylan points out in his brief, "While the recent economic recession has clearly exacerbated the financial challenges our country faces, the underlying cause is obvious: far too much spending. This data clearly shows that taxpayers will be trampled in coming years if Congress doesn't immediately start reining in our wildly out-of-control federal budget." NTU is a nonprofit, nonpartisan organization founded in 1969 to work for lower taxes, smaller government, and economic freedom at all levels. Note: NTU Issue Brief #172, "The Obama Budget: ‘Scoring' a Direct Hit on Taxpayers," is available online at www.ntu.org.
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