Free Markets, Free People

Notes on the “Big Plan”

Two major points about the budget plan the Obama administration has out there (from the Heritage Foundation):

Spending: Obama’s budget proposes $1.13 trillion in regular discretionary spending for 2010. This is a full 12% increase over the 2009 spending baseline. On top of this the Obama budget increases entitlement spending by another $700 billion. The proposed post-recession spending level of 22% of GDP has been exceeded only 8 times in the post-war era. And these numbers do not include the spending priorities of the unchecked far left in Congress.

The Chicago Tribune reports today “President Barack Obama will break a campaign pledge against congressional earmarks and sign a budget bill laden with millions in lawmakers’ pet projects … Taxpayers for Common Sense, a watchdog group, identified almost 8,600 earmarks totaling $7.7 billion.”

Deficits: The Obama budget claims to cut the deficit in half by 2012, but relies on audaciously optimistic economic forecasts that no one believes in. Adding the “stimulus” bill to a realistic budget baseline yields a projected 2010-2017 cumulative budget deficit of $8.4 trillion – 2.5 times the size of President Bush’s deficits over the same 8-year time period. Before the recession, revenues were 18 percent of GDP and spending was 20 percent. After the recession, President Obama would maintain revenues at 19 percent of GDP, and spending at 22 percent. In other words, all new tax revenues would finance new spending, rather than deficit reduction. President Obama’s structural budget deficit would exceed President Bush’s.

So you have, in the time of economic contraction and massive deficit, a 12% increase over the 2009 spending baseline in discretionary spending. 12%. And entitlement increase of $700 billion. In an 8 year time period (should he be re-elected in 2012) Obama plans to add 8.4 trillion to the debt – a full 2.5 times larger than the huge debt George Bush added. This is a phenomenal and eventually crippling level of borrowing and spending. There is no end in sight. Where the Bush administration spent 2% above the revenue, even with an increase in revenue from increased taxation, the Obama administration plans on maintaining a 3% spending gap of revenue/spending.

Untenable, unsustainable and ultimately, utterly destructive to a market economy.


11 Responses to Notes on the “Big Plan”

  • “Untenable, unsustainable and ultimately, utterly destructive to a market economy.”

    Is that a bad thing?

  • <blockquote>”The Obama budget claims to cut the deficit in half by 2012, but relies on audaciously optimistic economic forecasts that no one believes in.”</blockquote>

    So that’s what he meant by The Audacity of Hope.

    There seems to be a consensus that the damage he does will not be easily undone.  That we’ll be stuck with universal healthcare, nationalizing this and that, new entitlements, etc.  But I believe the potential is there for the President to be handily defeated by a platform of “rolling back the clock” on Obama’s “reforms.”  Thus, a mandate to scrap all the nonsense and get back to core principles. 

    If he gets everything he wants, I see a real possibily for some substantive libertarian reform in four years — because we have no choice but to do it.

  • How dare you used such biased sources as Heritage….

  • Wait, Bruce…  You mean that you don’t believe Obama’s stimulus package will lead to 3% and 4% GDP growth over the next few years?

    Why, that’s such a cynical view.  I’d suspect you even believe that it was throwaway money to pet liberal causes too!

    Where’s your sense of Hope & Change?

  • Right now I’m ‘hoping’ that we won’t agree to tie American taxpayers to an EU bailout for Eastern Europe.  Any takers on the odds against?

    • The only way Europe can “afford” it is do drag us into it, looker. And hide and watch, Brown will roll Obama.

      • Pretty much expect it, after all, we’ve always been the bottomless well every time the world needed water.  It’s bad enough we’re committing ourselves and our kids (and who knows how long beyond them) to technical serfdom to a socialist idea basing itself on the ‘comfort’ level that “we don’t want things to change! (no more GM, no more Chrysler, Climate Change! no more Bank X!).  For this Obama will commit us all to logical serfdom.  I don’t like being committed to serfdom for my fellow Americans, DAMNED if I want to be committed to it for Europe, but damned if I don’t think it’s about to happen.  After all, Obama has discovered we’re not out of checks in the check book yet!

      • O is a classic leftist looking for approval from a “superior” Europe.  For certain he will give the country away to these guys.

        Bootlickers all.

  • we only brought in 2.7 trillion in revenue in 2007.  I can’t wait to see the 2008 numbers and i bet we don’t even break 2 trillion for 2009.

  • Oh i figured it out.  He’s not talking about today’s deficit but the 2011 deficit.  By 2011 the deficit should have quadrupled according to my swag so cutting it in half by 2012 should be childs play. 

    Or he could be thinking in the literal sence and plans to print the deficit and then cut in half with scissors.  neither would surprise me at this point

  • Personally, I think these guys are hardcore Marxist’s and their intention is purposely to destroy capital altogether and therefore individuality. Without question this is clearly the most deadly attach ever carried out against the US. 

    Too me anyway…