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The U.S. is bankrupt. Of course, Uncle Sam has the power to tax. But at some point even Washington might not be able to squeeze enough cash out of the American people to pay its bills.

President Barack Obama would have everyone believe that he has placed federal finances on sound footing. When the administration unveiled its new budget earlier this month, White House spokesman Josh Earnest said “the president’s pretty proud of the success that we’ve had.”

The deficit did drop from over a trillion dollars during his first years in office to “only” $439 billion last year. But the early peak was a result of emergency spending in the aftermath of the financial crisis and the new “normal” is just short of the pre-financial crisis record set by President George W. Bush. The reduction is not much of an achievement.

Worse, the fiscal “good times” are over. The Congressional Budget Office expects the deficit to jump this year, to $544 billion.

This increase hike was a matter of deliberate federal policy agreed to by Republicans and Democrats alike. Explained the agency, “That increase is largely attributable to legislation enacted since August.”

The deficit is not caused by too little money collected by Uncle Sam. Revenues are rising 4 percent this year, and will account for 18.3 percent of GDP, well above the last 50-year average of 17.4 percent. But outlays are projected to rise 6 percent, leaving expenditures at 21.2 percent of GDP. That is well over the 20.2 percent average of the last half century.

Alas, this year’s big deficit jump is just the start. Explained CBO: “If current laws generally remained unchanged, the deficit would grow over the next 10 years, and by 2026 it would be considerably larger than its average over the past 50 years.”

Revenues will rise from $3.4 trillion to $5 trillion between 2016 and 2026. As a share of GDP they will remain relatively constant, ending up at 18.2 percent. However, outlays will rise much faster, from about $4 trillion this year to $6.4 trillion in 2026. As a percent of GDP spending will jump from 21.2 percent to 23.1 percent over the same period,

Thus, the amount of red ink steadily rises, and is expected to be back over $1 trillion in 2026. As a percentage of GDP the deficit is going from 2.9 to 4.9. The cumulative deficit from 2017 through 2026 will run $9.4 trillion. Total debt will rise by around 70 percent, going from about $14 trillion this year to roughly $24 trillion in 2026.

Reality is likely to be worse. So-called discretionary spending, subject to annual appropriations, is to be held to record, and probably unrealistic, low levels. In contrast, entitlements will be exploding.

Last June CBO published a report looking at the federal budget through 2040. Warned the agency: “the extended baseline projections show revenues that fall well short of spending over the long term, producing a substantial imbalance in the federal budget.” By 2040 the agency imagines revenues rising sharply, to 19.4 percent of GDP, but spending going up even further, to 25.3 percent of GDP.

Using its revised figures, CBO warned: “Three decades from now debt held by the public is projected to equal 155 percent of GDP, a higher percentage than any previously recorded in the United States.” Even when exiting World War II — 106 percent in 1946, the previous record.

CBO noted the potentially destructive consequences of such indebtedness. Washington’s interest burden would rise sharply.

There’s no time to waste. Uncle Sam is headed toward bankruptcy. Without serious budget reform, we all will be paying the high price of fiscal failure.

Doug Bandow is a senior fellow at the Cato Institute.

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