The Obama campaign has unveiled a new interactive feature highlighting how a fictional girl named Julia would benefit from President Obama's policies over the course of her lifetime. The result is an ode to government dependence and celebration of the cradle to grave welfare state. Julia enrolls in head start, uses government student loans, gets Obamacare subsidies and lives off Social Security and Medicare in old age. Noticeably absent from Obama's presentation is any mention of the mounting debt that the nation's welfare state obligations are imposing on Julia and the spending for which she'll be on the hook. So I thought it was worth taking a moment to fill in the blanks.
Here's a chart depicting the nation's debt as a share of its economy through 2036. According to the Congressional Budget Office's alternative fiscal scenario (which assumes Congress will continue to behave as it usually does), it would soar to 195 percent of the economy by the time Julia reaches the age of 24 (assuming she's born today). By way of comparison, troubled Greece's debt-to-GDP was estimated at 165 percent in 2011, according to the CIA World Factbook.
The CBO tells us that after 2037, the debt-to-GDP ratio will remain above 200 percent, but it doesn't have an annual breakdown after that. It does have projections on government spending through 2085. According to the data, by the time Julia celebrates her 73rd birthday, government spending would equal 76 percent of the nation's economic output. To put that in context, it would mean that avoiding an annual deficit would require collecting taxes at more than quadruple the post-World War II average of roughly 18 percent of GDP.
Of course, these numbers are all hypothetical, as the economic and financial system would collapse well before we reached this point. What's Obama's plan to spare Julia from such a bleak scenario? As his Treasury Secretary Tim Geithner told House Budget Committee Chairman Rep. Paul Ryan, R-Wis., “We’re not coming before you to say we have a definitive solution to that long-term problem. What we do know is we don’t like yours.”