This completes the piece I wrote last week on the entitlements crisis. Look at the following graph and table.
Those are trillions of dollars that we are looking at, and a 14% growth rate over the last eight years, significantly outpacing GDP growth. Why did I not like Bush Jr., and why is Obama likely worse? There is no concern for the long run effects of current policies. Does it matter that current policy is unsustainable? This does not count in state defined benefit pension plans and retiree healthcare. Even without that, the deficit on an accrual basis is 3.5x GDP. Another way to think of this is that we are at least ten years behind in tax collections.
We are viewing the slow failure of the US Government. It may not be for years or decades, but the lack of willingness of the current administration to address the growing shortfall shows that they are more similar to the Bush, Jr., administration, than different from it. After all, who ran the biggest deficits? Obama, by a long shot.