$10,000,000,000,000.00 Balloon Clause - NPR [View All]

[reprehensor]

From NPR's Marketplace - Feb.4/04 - Robert Reich.

http://www.robertreich.org/reich/20040204.asp

Not to worry, though. The President promises to cut the budget deficit in half over the next 5 years. But here’s the catch. You’ve heard of balloon clauses in loan agreements, haven’t you? A balloon clause says you start out paying back a little bit and then your payments increase until you’re walloped with huge payments later on. The President’s budget is like that. The really big-ticket items hit more than five years from now, starting in 2009.

Here’s one example. The White House admits that the ten-year cost of the new Medicare drug benefit will be more than half a trillion dollars. But what no one’s saying is that most of this kicks in after 2009, when the baby boomers begin retiring and taking advantage of the drug benefit.

Or consider the tax cuts. If they’re made permanent, as the President wants, the loss of revenues over the next ten years will be five and a half trillion dollars. And here’s the kicker: Most of this occurs after 2009. That’s because the tax cuts start out relatively small and grow.

By the year 2014, according to recent estimates from the Congressional Budget Office, the President’s budget will have added more than 10 trillion dollars to the national debt. And most of this happens after 2009. So cutting the deficit in half over the next five years doesn’t mean all that much, even if the promise is kept. Did you hear me? Ten trillion dollars. That’s ten thousand billion. Ten trillion dollars is just about the value of everything that everyone in this nation produces in an entire year.

Ten trillion dollars – with the biggest balloon clause in the history of the world.
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(If you have any 'fiscal-conservative' friends who are going to vote for W just because he is a Republican, send them this TEN TRILLION DOLLAR WAKE UP CALL.)