CBO: In case you’ve forgotten, entitlements are going to explode the deficit

Any time I mention the Congressional Budget Office, it's important to say this: Their "nonpartisan" projections are basically wild guesses, and to the extent they reflect the scoring of a spending bill proposed by Congress, they are always garbage-in-garbage-out projections based on numbers they are given by politicians. So I have argued many times that you can't cite a CBO report and act like it's gospel truth, and I won't make that claim about this one either.

Having said that, the CBO projections out today about the nation's long-term deficit picture should frighten the bejeezus out of everyone in the country. It could be overly pessimistic by a factor of a lot and still portend disaster. And it's all about the refusal of the political class to restructure entitlements. Take a look, from CNBC:

Near-term improvements in the U.S. debt and deficit outlook will be more than overtaken by the rising costs of caring for an aging population over the next 30 years, the Congressional Budget Office said on Tuesday. In new long-term forecasts, the CBO projected that with no changes to tax and spending laws, the deficit would reach 6.4 percent of gross domestic product by 2038 compared to 3.9 percent this year.

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Public debt held would reach 100 percent of GDP in 2038 versus 73 percent this year, the non-partisan CBO forecast.

If you're confused about that last point, a quick explanation: There is a distinction between the total national debt and the debt owed by the public, which is not 100 percent of the national debt. The total national debt exceeds GDP now. When debt owed by the public exceeds 100 percent of GDP, we are in huge trouble because at that point the nation's ability to generate enough wealth to service the debt is getting crushed under all the interest payments, taxes and other burdens necessitated by the debt - even more so than it is today, and make no mistake, the current growth level of 2 percent isn't going to do the job either. If 2038 looks anything like what the CBO is projecting, we'll long for the days of 2 percent growth. The most maddening thing is that all of this is preventable if we restructure entitlements to reflect modern-day reality, yet the political class absolutely refuses to do that. They still try to tell us they've accomplished something significant when they make "budget deals" that supposedly reduce the deficit by $400 billion over 10 years, when in reality that would represent a deficit reduction of less than 10 percent even assuming it would actually happen that way, which of course it won't. The Obama Administration is crowing these days because the deficit is down to "only" about $700 billion, which is higher than any Bush deficit except arguably the last one (which included the costs of TARP), but more to the point, is a temporary respite in the otherwise endless string of deficits north of $1 trillion - and they know it. They know entitlement costs have hardly even begun to explode, and that the nation is in no position to afford what's about to happen. Yet when anyone proposes a serious fix to the programs, the first thing Democrats do is air commercials like this one:

The bottom line is that the political class is simply not serious about solving the problem. They figure 2038 is a long ways off and most of them will probably be gone by then. So for now, why not pretend everything is OK while the voters keep re-electing them? It won't be their problem when the whole thing implodes.