Free Markets, Free People

The Obama Budget

Senator Tom Coburn’s office provides a few facts about the budget the Obama administration has submitted to Congress. Budget buster would most likely be a better description:

Total Spending:

Total spending under this budget is $3.9 trillion in 2009, or 28% of GDP, the highest level as a share of GDP since World War II.

Discretionary Spending:

This budget provides $1.2 trillion in discretionary budget authority for FY 2010 and increases discretionary spending by $490 billion over 5 years. Total spending in 2009 is 28 percent of GDP.

Mandatory Spending:

The Democrat budget includes $2.2 trillion in mandatory spending for FY 2010, which includes Social Security, Medicare and Medicaid spending.

So there are the basics. And remember the pledge that by 2012 the deficit will be cut in half. Well, with this budget, that doesn’t mean a whole bunch in terms of what’s left in the deficit. It will still most certainly be higher than any deficit prior to this one.

Deficit is one thing, debt is another. Politicians like to use smoke and mirrors with deficit and debt, preferring to ignore debt and talk about how they’re dealing with debt. Well let’s get serious about this – the debt is what we owe, the deficit is just how much more we’re piling up.

Total National Debt Today:

$11.055 trillion

Under the Democrat Budget:

FY 2010: $12.2 trillion
FY 2011: $14.3 trillion
FY 2012: $15.3 trillion
FY 2013: $16.1 trillion
FY 2014: $17.0 trillion

So now we see the bottom line. In FY 2011, we will have more debt than GDP (the US GDP is 13.84 Trillion). And, in all honesty, we don’t have to be – unless we pass this budget. You cannot spend yourself out of debt. And you cannot cure a credit problem by extending more credit.

More:

Public Debt:

This budget adds $4.96 trillion to the public debt by 2014. Debt will be about two-thirds of GDP for the entire budget window, and deficits will be at least $500 billion in each year of the budget window.

Deficit:

The Democrat Budget sets total outlays in FY 2010 at $3.53 trillion and total revenues at $2.29 trillion, for a deficit of $1.24 trillion.

This is truly the beginning of the end. And without cap and trade involved, without universal health care is factored in, just to pay for this mess, taxes are going to go up. The question is how high. And as you’ll see, it’ll be higher than the spin is spinning:

Tax Increases:

Against a baseline that assumes current law tax policy is extended, S. Con. Res. 13 raises taxes by $361 billion and allows for $1.3 trillion in additional tax increases. In addition their budget paves the way for additional tax increases from a proposed cap-and-trade tax in reconciliation.

If you’re wondering where the additional $1.3 trillion in taxation might (will?) come from, Coburn provides a little behind the scenes look at how the Democrats procedurally set up phantom funds that they can initiate through a majority vote anytime they wish to fund favored initiatives:

Deficit Neutral Reserve Funds:

The Democrat budget includes 15 “reserve funds,” which essentially “phantom spending” policy statements that allow the majority to say that they would like to fund a certain initiative. The deficit neutral requirement associated with the reserve funds typically require that taxes be raised in order to pay for the new policy initiative. If all reserve funds were to be fully enacted, total spending would increase by $1.3 trillion, financed by tax increases or spending decreases.

Welcome to “hope and change”. More debt, more spending, bigger deficit, and no end in sight.

Someone will end up paying for all of this mess, and my guess is it will be all of us – for generations.

~McQ

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6 Responses to The Obama Budget

  • All correct. However…

    Where is the outrage? Where are the commercials demanding us to call our members of Congress to tell them to throw this garbage over the side? Where are the marches on Washington? We cannot expect the pro-Clown media to say anything, but is there anyone else? So many people watch Fox News, but that is only a slice of America.

    We need to start websites, call our local media, send letters, do something. We need to stop this crap before the US becomes the SS Titanic under this thug in the White House.

  • It cannot continue, because no one will lend.    The charade of a Social Security Trust Fund is about to be unmasked.   The accounting sleight-of-hand is still there, but money or saleable assets are not.

    Where next?  Inflation.  There won’t be a default, the government can print pretty pieces of paper.  Too bad they won’t be worth much more than the full faith and credit of the United States, which will be worth nothing. 

  • Come on Erb – defend, defend, defend.

  • The debt has not been paid attention to in elections since Newt Gingrich and Bill Clinton. Bush and Republicans were in

    control of everything a few years ago, but they blew it, and that is the reason we have what we have. Voters think that

    elections are another reality TV show like American Idol. Republicans and Democrats together have done a successful job in

    making American voters care about other things instead of paying attention to the fact that politicians are bankrupting and

    destroying the country with debt to fill their pockets, and the pockets of their pals. The Republicans and Democrats are all

    crooks.

  • It could be the bond holders who pay for it. If things go badly enough and the currency or bonds become devalued, the debt goes away in a puff of smoke. Even a mushroom cloud has a silver lining…