Shut-down for Dummies

The President has due date every year for submitting his budget proposal to Congress.
President Obama has submitted the past four annual budget proposals after the required date.
Congress then negotiates with itself and the President and attempts to pass a budget.  If the
budget fails to pass what occurs is stop-gap appropriations are passed to fund government
programs.  The current spending legislation that includes funding the Affordable Care Act is occurring because the President once again submitted a proposed budget that could not pass Congress.  In fact, a budget has not passed Congress in several years.

The President's budget failure stops at his desk and his desk alone.  Obama's 2012 budget was defeated in the Democrat controlled Senate 97-0.  Not one Democratic Senator voted for it.  That means the proposal was horrible horrible horrible.  The 2013 budget proposal was defeated by Republican controlled House 414-0.  Not one Democratic Representative voted for it.  Again...horrible, horrible, horrible.

The budget continues to fail because it will add $1.5 trillion by the end of 2014 to the federal debt held by the public as we top a roust 77% of GDP.  Obama's idea for debt reduction included smoke and mirrors such as

• A cap on the extent to which deductions and exclusions can reduce a income tax liability
• A change to the way tax provisions and major benefit programs are indexed for inflation

Running in huge uncontrolled debt is loaded with massive consequences.

Increased borrowing by the government reduces private investment in productive capital, because the reduction of savings used to buy government securities would not be available to finance private investment. The result would be a smaller stock of capital and lower output and income. 

Federal spending on interest payments rises, requiring larger changes in tax and spending policies to achieve reduction in budget deficits and debt.

The government would have less flexibility to use tax and spending policies to respond to unexpected economic downturns or wars.

The risk of a fiscal crisis—in which investors demanded very high interest rates to finance the government’s borrowing needs increases.

From 2009-2012, the federal government recorded the largest budget deficits relative to the economy since the end of World War II cause the debt to soar.  The debt as a percentage of GDP is twice as high as it was at the end of fiscal year 2007.  If current laws remain in place, deferral debt held by the public will reach 100% of GDP by 2038.  This by the way is the doing of one Barack Hussein Obama anyone thinking otherwise and blaming George W. Bush is a fool.

 If the laws remain as they are now,  federal spending on the government’s major health care programs is expected to rise substantially relative to GDP. Specifically, net federal spending for those programs would grow from an estimated 4.6 percent of GDP in fiscal year 2013 to 8.0 percent in 2038.  This increase is due to the aging population massively increasing (baby boomers) and the implementation of the Affordable Care Act.  Now other health care programs, Social Security, and
net interest payments will decline to 7% of GDP (-4% of average), but the net interest payments would grow to 5% of GDP compared to the current rate of 2% because of the large federal debt.

All of these figures and much of the verbiage are from the CBO, OMB, and GAO.