China expresses some … um … “concern” about whether or not it will ever see its money back:
The Chinese prime minister, Wen Jiabao, expressed unusually blunt concern on Friday about the safety of China’s $1 trillion investment in American government debt, the world’s largest such holding, and urged the Obama administration to provide assurances that the securities would maintain their value in the face of a global financial crisis.
Speaking ahead of a meeting of finance ministers and bankers this weekend in London to lay the groundwork for next month’s G20 summit, Mr. Wen said he was “worried” about China’s holdings of United States Treasury bonds and other debt, and that China was watching economic developments in the United States closely.
“President Obama and his new government have adopted a series of measures to deal with the financial crisis. We have expectations as to the effects of these measures,” Mr. Wen said. “We have lent a huge amount of money to the U.S. Of course we are concerned about the safety of our assets. To be honest, I am definitely a little worried.”
Just a little? There’s an old saying to the effect of “if you owe the bank $1 Million, then the bank owns you; if you owe the bank $1 Trillion, then you own the bank.” China’s feeling pretty nervous because it knows it can’t sell its holdings except at a tremendous loss — both from the normal discount expected, and from the fact that it is by far the largest mover in the market (e.g. what do you think would happen to Microsoft stock if Bill Gates started selling off?) — and it doesn’t see a whole lot coming out of Washington to instill confidence.
But there’s no need to fret PM Jiabao! Unnamed economists are here to save the day:
While economists dismissed the possibility of the United States defaulting on its obligations, they said China could face steep losses in the event of a sharp rise in United States interest rates or a plunge in the value of the dollar.
Whew! That was close. Nothing but a little market risk to worry about there, Jiabao. Default? Pffft … never gonna happen.
Back in the land called “reality” however, default is plays a bigger part since, aside from reneging on the debt, there are only three other ways for the government to pay for its spending binge: higher taxes, printing more money, or borrowing. Higher taxes impedes growth and leads to less revenue. Printing money leads to hyper-inflation. So, even though those two choices will be used to a certain extent, further borrowing is the only viable alternative to default. But who’s going to lend to us?
The bulk of China’s investment in the United States consists of bonds issued by the Treasury and government-sponsored enterprises and purchased by the State Administration of Foreign Exchange, which is part of the People’s Bank of China … much of the Treasury debt China purchased in recent years carries a low interest rate, and would plunge in value if interest rates were to rise sharply in the United States. Some financial experts have warned that measures taken to combat the financial crisis — running large budget deficits and expanding the money supply — may eventually create price inflation, which would lead to higher interest rates.
This puts the Chinese government in a difficult position. The smaller the United States stimulus, the less its borrowing, which could help prevent interest rates from rising. But less government spending in the United States could also mean a slower recovery for the American economy and reduced American demand for Chinese goods.
It may just be the case that China’s best option is to support its investment by propping up its best customer with yet more loans. Unfortunately, that means that Washington will have little incentive to slow down spending (since it owns the bank). The nasty little cycle of borrowing > spending > inflation > rising interest rates > falling dollar, will continue necessitating even more borrowing. China, in turn, will have serious questions about the value of its investment, and the US will start having serious discussions about declaring a default.
In short, China’s not just “worried” about the current fiscal mess. It’s crapping its collectivist shorts.
President Obama and VP Biden are going to be watching you:
Obama and Biden both gave stern warnings yesterday about misuse of stimulus funds. “If we see money being misspent, we’re going to put a stop to it,” Obama told a gathering of state officials at the White House. How? Obama says “we will call it out and we will publicize it.” Biden, meanwhile, scolded: “If we don’t get this right, folks, this is the end of the opportunity to convince Congress that anything should go to the states.”
Of course, these were words spoken to representatives of states getting “stimulus” money.
Lost in the shuffle is the fact that there is no one to shout “BS” to the whole scheme and declare it all “misspent” money. A $787 billion dollar social spending scheme isn’t money “misspent?” Hah!
But other than that, I think Earl Devaney provides us with the ground truth about this upcoming spending debacle:
The chief watchdog for spending from the $787 billion stimulus package says it’s guaranteed there will be waste and fraud.
Earl Devaney, tapped by President Obama to track the giant spending plan, also said it will be at least a year before the government gets recovery.gov, the Web site the administration has touted as a key part of its transparency, up and running properly.
“I’m afraid that there may be a naive impression that given the amount of transparency and accountability called for by this act, no or little fraud will occur.
A “naive impression?”
Heh … nah, you don’t say?
The word “naive” seems to describe a lot of what is going on right now with the Obama administration.
Mark Sanford, the governor of South Carolina, said this the other day about the possible effects of all of the spending the Obama administration was doing and planning:
“What you’re doing is buying into the notion that if we just print some more money that we don’t have, send it to different states — we’ll create jobs,” Sanford said. “If that’s the case, why isn’t Zimbabwe a rich place?… Why isn’t Zimbabwe just an incredibly prosperous place. ‘Cause they’re printing money they don’t have and sending it around to their different — I don’t know the towns in Zimbabwe but that same logic is being applied there with little effect.”
A little oversimplistic, but this is “sound bite nation” so you have to condense. In effect his point is true to the extent it goes, and the example is a good and valid one, since Zimbabwe is printing money as fast as it can add zeroes to its demonimations. By now, the hyper-inflation it is undergoing from doing so should be well known to people versed in current affairs.
Unless, of course, you want to make a racial thing out of it. Rep. James Clyburn, Democratic Majority Whip, reacts to Sanford’s lesson and example of Zimbabwe:
“For him to compare the president of this country to Mugabe. … It’s just beyond the pale,” said Clyburn, who has sparred with Sanford over the Republican’s refusal to accept all the state’s stimulus funding.
“I’m sure he would not say that, but how did he get to Zimbabwe? What took the man to Zimbabwe? Someone should ask him if that’s really the best comparison. … How can he compare this country’s situation to Zimbabwe?”
Of course the “how” is fairly simple – if what is being touted as a solution here and was touted as a solution there, then Zimbabwe should be in great economic shape right now. But Clyburn would rather make a racial thing out of it. Obviously Sanford could have used Wiemar Germany of the ’30s, but it isn’t as relevant today as the case of Zimbabwe. And, he could have also used Venezuela. But Venezuela isn’t quite the basket case Zimbabwe is. Nope, in terms of a current example of what might happen, in terms of hyper-inflation from artificially pumping up he money supply, Zimbabwe is as good as it gets.
“Rep. Clyburn always plays the race card,” shot back Sanford spokesman Joel Sawyer, who said his boss has also compared the stimulus to failed government policies in Germany and Argentina. “This policy will result in hyper-infaltion. … [Clyburn] is ripping off the people he purports to represent.”
Round 2 to follow.
Barack Obama doesn’t have the votes to pass his $4 trillion budget:
Sen. Kent Conrad (D-N.D.) said he has spoken to enough colleagues about several different provisions in the budget request to make him think Congress won’t pass it.
Conrad urged White House budget director Peter Orszag not to “draw lines in the sand” with lawmakers, most notably on Obama’s plan for a cap-and-trade system to curb carbon emissions.
“Anybody who thinks it will be easy to get the votes on the budget in the conditions that we face is smoking something,” Conrad said.
Conrad joined Sen. Judd Gregg (N.H.), the top Republican on the Budget Committee, and Sen. Lindsey Graham (R-S.C.) in criticizing the administration’s cap-and-trade proposal for not doing enough to counterbalance increases in energy costs that will be felt by consumers and companies, especially those in energy states such as North Dakota.
Conrad said that it would be a “distant hope” to expect the climate change plan to pass unless it includes help for industries that would be hit hard by limits on carbon emission production.
That’s good news, though I don’t have much faith in Democrats holding the opposition.
Let’s face it, these policies will hurt the economy even in good times, so why try to pass them when the economy is already in shambles? It makes no sense.
The following was written by Andrew Davis for Conservative HQ. It has been posted here with his permission.
During the 2008 election, Ron Paul became a grassroots icon in his fierce denunciations of Big Government, Big Spending and the federal government’s failure to live by our Constitution.
Unfortunately, his actions don’t match his rhetoric.
According to a Houston Chronicle analysis of the $410 billion dollar spending bill passed by Congress at the end of February, Ron Paul had a role in obtaining 22 earmarks, totaling $96.1 million—making him the pork-leader of Houston’s congressional delegation.
Paul’s office did not respond to comment requests from the Chronicle; however, on Paul’s congressional Web site, it states: “As long as the Federal government takes tax money from [Paul’s] constituents, he will make every effort to return that money to his district.”
Comforting logic, consistent with our Constitution? Not really.
This isn’t the first time Congressman Paul has been caught with his hand in the federal cookie jar. In August of last year, a Wall Street Journal article highlighted Paul’s request for 65 earmarks costing nearly $400 million. This included $8 million for marketing shrimp, and $2.3 million for shrimp-fishing research.
At the time, Paul’s spokesperson told the Journal that, “Reducing earmarks does not reduce government spending, and it does not prohibit spending upon those things that are earmarked.”
“What people who push earmark reform are doing is they are particularly misleading the public — and I have to presume it’s not by accident,” the spokesperson added.
Again, not a very convincing logical justification. And, Paul’s spokesperson certainly didn’t explain how marketing shrimp is consistent with the U.S. Constitution.
Paul is far from the top of the list of Big Spenders in Congress, but he isn’t at the bottom either. Earmarks are a small portion of Congress’ overall spending; however, you have to start somewhere to cut spending, and eliminating earmarks is as good of a place as any.
Although Paul ended up voting against the $410 billion spending bill, he still had his hands in the cookie jar. At the end of the day, he’ll end up with taxpayer cash flowing into his district, but can boast about a clean record.
A list of Congressman Paul’s 2009 earmark requests can be found here.
Another day older and deeper in debt. Of course, that’s because you plan to spend $3.6 Trillion on budget over the next year.
WASHINGTON – President Obama laid out his first budget plan, a bold $3.6 trillion proposal that would transfer wealth from rich taxpayers to the middle class and the poor, and predicts a stunning federal deficit of $1.75 trillion this year – nearly four times last year’s record.
Obama blamed the expected federal deficit explosion on a “deep and destructive” recession and recent efforts to battle it, including the Wall Street bailout and the $787 billion stimulus plan.
Among the budget proposals, the plan would:
extend a $400 tax credit for most workers while letting expire former President George W. Bush’s tax cuts for couples making more than $250,000 a year. The budget contains almost $1 trillion in tax hikes over 10 years on individuals making more than $200,000 and couples earning more than $250,000;
close tax loopholes for the wealthy to raise $318 billion toward a down payment on Obama’s universal health care plan;
clamp down on the Pentagon budget, which would get a 4 percent boost next year, but would then get increases of 2 percent or less over the next several years;
make permanent the expanded $2,500 tax credit for college expenses;
spend more than $6 billion on cancer research at the National Institutes of Health next year, a 15 percent hike;
spend $3.9 billion to improve the nation’s sewage treatment plants and drinking water systems; and
raise $15 billion a year, beginning in 2012, from auctioning off carbon pollution permits to help develop clean-energy and renewable-energy technologies. The administration “will work expeditiously” to get Congress to approve an 83 percent reduction in global warming emissions by mid-century. There’s also more money at NASA for space-based monitoring of greenhouse gases.
After reviewing some of the comments from those intended to be taxed, as well as some of the criticisms of those taxpayers’ intelligence [as an aside, I think the liberals denouncing both the story and the interviewees are playing a little fast and loose with the assumptions, since the taxpayers displayed no misunderstanding of marginal rates, and voiced concerns solely based on principles], I got to thinking about how much money will this proposed tax hike really raise. This seems important, not only because of the size of proposed budget, but also since a common refrain from those in favor of letting the top rate snap back to 39.6% (from the current 35%) is that it will only cost those taxpayers 5 cents on the marginal dollar, which is very little to worry about much less enough to change behavior, or so the argument goes.
Before looking at the actual numbers, let’s get something straight first. While it is accurate to say that raising the top rate only costs these taxpayers a nickel per extra dollar earned, that is not all that is being proposed. These taxpayers will also be losing deductions and credits that they would otherwise have, as well as paying extra taxes on anything subject to cap-and-trade taxes, should that lovely piece of legislation be passed. Moreover, if you truly believe Obama when he says that those with incomes less than $250,000 per year will receive a tax cut, then it seems ludicrous to pretend that at least some, if not virtually all, of those taxpayers near the margin will change their working behavior so as to be in the benefit group rather than the extra-taxed one.
Nevertheless, for purposes of calculating the expected tax revenues generated under this plan, I’m going to assume that nobody changes their behavior in the slightest (i.e. everyone earns as much taxable income as possible), and that the number of taxpayers and the amount of taxes paid largely mirrors the 2006 numbers (which is the most recent data available).
According to IRS figures [xls], about 50% of all taxable income came from the $200,000 and above earners in 2006. By my calculations that came to $2.056 Trillion dollars in taxable income from 3,847,241 taxpayers (about 9% of all returns). This cohort paid approximately $522 Billion in taxes, or about 62.4% of the total $837 Billion in tax receipts. These are the people upon whom the new burden will be placed according to President Obama.
In order to figure out how much taxable income is above $200K (there is no breakout for $250K and above), I took all of the taxpayers in the $200K to infinity range (3,847,241) and multiplied it by 200,000 (= 769,448,200,000).
I then subtracted that number from the (rounded) total of taxable income for the same range (@ $2.056 Trillion), and got $1,286,551,800,000. If I thought about it correctly, then that should be the amount of taxable income above $200K.
I then took my above-$200K number and multiplied it by 5 cents, figuring that the increase in marginal rate of 4.6% would lead to about a nickel per taxable dollar earned in new revenues, if everything were to remain static.
From all of that I figured that approximately $64.3 Billion in new taxes would be raised by the new tax hike … to cover a $3.6 Trillion budget.
I sent my calculations to Dale, who became so engrossed in the matter that he put together an entire spreadsheet figuring the numbers in not one, not two, not three, but in six different ways. I realized later that asking Dale to check out my math was rather like standing on one foot and excitedly calling attention to my “skill” while in the midst of an acrobat convention.
After Dale played with the numbers [xls] for awhile, he arrived generally at the conclusion that the absolute most that could be raised was in the neighborhood of $85 Billion, and at worst around $55 Billion. On average, Dale calculated that approximately $65 Billion was the likely amount of new tax revenue that could be expected if all payers in the 2006 cohort behave exactly as they did then. Sticking with the metaphor, “Yes, Michael, that’s a decent one-legged stand you have there.”
In short, a complete klutz has a better chance of joining the Flying Wallendas than the bottom 95% of taxpayers do of getting a tax cut. Instead, they will all see a significant tax hike, whether in their marginal rates, in excise taxes, corporate taxes, fuel taxes, or other forms of indirect taxation. And as those taxes begin to mount up, and the national debt does it’s best imitation of the Challenger, people will work and produce less and less, and tax revenues will dry up.
That is the plan for our recovery. Read it and weep.
As you might imagine, the 5% (the taxable “rich”) are trying to figure out how to become a part of the 95% (the “tax cut” rest):
President Barack Obama’s tax proposal – which promises to increasetaxes for those families with incomes of $250,000 or more — has some Americans brainstorming ways to decrease their pay, even if it’s just by a dollar.
I’m sure this comes as a horrific surprise to those who have been clapping their hands gleefully in anticipation of the “rich” finally “getting theirs”. But the “rich”, or at least some of them, may have other ideas. The following anecdote best illustrates the most important points:
Dr. Sharon Poczatek, who runs her own dental practice in Boulder, Colo., said that she too is trying to figure out ways to get out of paying the taxes proposed in Obama’s plan.
“I’ve put thought into how to get under $250,000,” said Poczatek. “It would mean working fewer days which means having fewer employees, seeing fewer patients and taking time off.”
“Generally it means being less productive,” she said.
“The motivation for a lot of people like me – dentists, entrepreneurs, lawyers – is that the more you work the more money you make,” said Poczatek. “But if I’m going to be working just to give it back to the government — it’s de-motivating and demoralizing.”
Like the probable results of the Obama plan so far?
Fewer employees (that’s jobs for those missing the point), less money (which means a tax cut instead of a tax increase), less production (scarcity), less in taxes for the government and thus less in revenue with which to meet its spending goals.
She is, of course, exactly right – working to make the government’s coffers fatter is both de-motivating and demoralizing.
So assuming that the majority of that percentage of the population now under the tax hike gun is successful in lowering their earning profile to the “tax cut” category, what alternative does that leave for a government hungry for revenue?
It can redfine “rich”.
The cycle repeats with the “new” rich going through the same type of cutting back – letting employees go, doing less work and leaving government with less anticipated revenue. The engine of commerce – the engine of prosperity and jobs – goes into reverse as each new attempt to secure the funding necessary to move the dream agenda forward is scuttled by selfish Americans not willing to work just to hand over what they earn to government.
I can’t imagine why people still wonder why I want to see the Obama agenda fail?
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.
A lot of high-fives on the left concerning a portion of the budget dealing with energy. The Center For American Progress, in a post entitled “Energy Budget Is Sunlight After Eight Years of Darkness” says:
The most significant energy proposal in this budget is the inclusion of revenue in 2012 from the auction of all greenhouse gas emission allowances to major polluters under a cap-and-trade system. The budget assumes that this program will raise $646 billion between 2012 and 2019. Some of these funds would create jobs via a $120 billion investment in clean energy technologies over the same period. The auction revenue would pay for a “global warming tax cut” for working families with $526 billion. It would fund Making Work Pay, which provides a refundable income-tax credit for low-income working families. Any remaining funds would go to other families and businesses to offset higher energy prices.
In other words, CAP believes that adding huge additional costs onto the already high cost of producing goods, services and energy will “create jobs” to offset those lost apparently. And the money collected will be redistributed to make things fair.
As so-called members of the “reality based community”, you have to wonder if they’ve ever bothered taking off the rose colored glasses and glanced around the real world.
Alan Wood in Australia asks:
CAN the Senate save Kevin Rudd and Penny Wong from their global warming folly? It can, and it might, if it rejects the Government’s attempts to prematurely lock Australia into a flawed carbon trading scheme. Ask yourself, do you believe that the worst global recession since the Depression, with job losses accelerating, is the time for Australia to introduce a carbon trading scheme that will squeeze growth, jobs and investment? Business certainly doesn’t.
Is there anyone in the Congress who can do the same for Barack Obama? Probably not. Do they understand that the carbon trading schemes in place around the world are literally melting down? Again, probably not.
And jobs? Well right here at home we can learn from the impact of the draconian regulations and resultant costs imposed on industry by such schemes and what that means. California, as usual, provides the case study:
California regulators Thursday adopted the world’s first mandatory measures to control highly potent greenhouse gases emitted by the computer manufacturing industry. “The financial impact is going to be severe,” Gus Ballis, a spokesman for chip maker NEC Electronics America Inc., a subsidiary of NEC Electronics Corp. in Japan, told the board. Ballis warned, “We’re potentially on the chopping block — whether they are going to keep us or pull our production back to Japan.”
The painful loss of 1850 jobs at Pacific Brands in NSW, Victoria and Queensland is more than a byproduct of the global recession. The main reason for shifting to China, chief executive Sue Morphet said on Wednesday, is that manufacturing in Australia “is no longer a competitive advantage” to the company. The Prime Minister owes it to businesses large and small, as well as to Labor’s core constituency, workers, to re-evaluate the impact on employment of his emissions trading scheme, especially in mining, where Australia has such a strong comparative advantage.
The German biofuels industry is facing bankruptcy according to their industry association, despite millions of state-sponsored subsidies in recent years. “It is five to twelve, but few politicians understand,” said the chairman of the Association of German Biofuel Industry (VDB), Kurt Stoffel. “The biodiesel market for trucks has come to a complete halt,” said Stoffel.
Britain said on Thursday it backed the building of new coal plants and would make a decision soon on whether these must have expensive, climate-friendly technologies fitted called carbon capture and storage (CCS). “We will need new fossil fuel plants including coal if we are going to maintain diversity in energy mix and energy security….”,
Yet here we are getting ready to implement a scheme that is already seen to be worsening the economic conditions around the world (and being abandoned by those realing the losses). Unsurprisingly our implementation would most likely occur just as we are beginning to see an end to the recession.
The administration certainly seems to be aware of the cost of such legislation but still plans on pursuing it:
Steven Chu, President Barack Obama’s new Secretary of Energy, told The New York Times earlier this month that reaching agreement on emissions trading legislation would be difficult in the present recession because any scheme to regulate greenhouse gas emissions would probably cause energy prices to rise and drive manufacturing jobs to countries where energy was cheaper.
Yet, with blinders fully in place, and giddy at the prospect of sticking it to evil corporations while redistributing their ill-gotten gains, the left applauds a plan which will cripple our economy for decades to come.
If ever there were budget proposals poised to send us into darkness, it is this plan put forward by the Obama administration.
Barack Obama is about to submit his first budget to Congress.
Finally, because we’re also suffering from a deficit of trust, I am committed to restoring a sense of honesty and accountability to our budget. – President Barack Obama to a joint session of Congress, Feb 24, 2009
That’s the promise. The reality, as the Washington Post observes, isn’t quite in keeping with the promise:
President Obama’s spending plan is built on the assumption that lawmakers can resolve some hugely contentious issues — and it relies on a few well-worn budget tricks.
The tricks? The usual stuff – calling something what it isn’t and inflating future spending numbers to make the future real numbers appear to be “savings”. For instance:
And though Obama told Congress on Tuesday that his budget team has “already identified $2 trillion in savings” to help tame record budget deficits, about half of those “savings” are actually tax increases, administration officials said. A big chunk of the rest of the savings comes from measuring Obama’s plans against an unrealistic scenario in which the Iraq war continues to suck up $170 billion a year forever.
The tax increases, of course, include an increase in taxes on the top 2%. And further savings are based on pretending that the Bush administration planned on spending $170 billion (seems like a small number when compared to the numbers being thrown around these days, doesn’t it?) beyond 2011 when it planned on pulling the bulk of the troops out of the country.
“It’s a hollow number,” said Sen. Judd Gregg (R-N.H.), the senior Republican on the Senate Budget Committee, who recently withdrew as Obama’s nominee to head the Commerce Department. “You’re not getting savings if you’re assuming spending that isn’t actually going to occur.”
What accounts for the other major source of income?
But to pay for it, the president counts on a big infusion of cash from a politically controversial cap-and-trade system, which would force companies to buy allowances to exceed pollution limits.
The promise that energy costs are going to skyrocket seems one promise he’s bent on keeping. That of course will require more spending to offset the consequences (but don’t figure on being in on the subsidy, you probably won’t qualify). And then there’s the redistributionist “spread the wealth” bonus to be realized from cap-and-trade:
Obama also wants to use the money to cover the cost of extending his signature Making Work Pay tax credit, worth up to $800 a year for working families. That credit, which will cost $66 billion next year, was enacted in the stimulus package, but is set to expire at the end of 2010.
Cover the cost is a way of saying, making the program permanent.
Then there’s the deficit promise. Obama has set a goal of cutting the deficit in half by the end of his first term. As observers say, there’s absolutely nothing difficult about reaching that goal:
This year’s budget deficit is bloated by spending on the stimulus package and various financial-sector bailouts, expenses unlikely to be repeated in future years. The nonpartisan Congressional Budget Office recently predicted that the deficit could be halved by 2013 merely by winding down the war in Iraq and allowing some of the tax cuts enacted during the Bush administration to expire in 2011, as Obama has proposed. That alone would cut the deficit to $715 billion, according to the CBO.
Notice that final number, folks. That’s “half” of the deficit. In other words he’s going to be running a deficit north of $700 billion dollars and trying to convince you how well he’s done. In fact, all he’ll have done is add several trillions to the debt with several trillions more to come if reelected.
The era of big deficit financed government isn’t just back, it’s back on steroids sitting in a rocket sled pointed at economic hell.