I’ve allowed Obama’s coming fiscal year budget to digest, and it’s still giving me indigestion. I am sympathetic to the need to increase spending in some areas to promote job growth, but there is no effort to try and cut costs in other non-essential programs or to hold off on spending areas that do need improvement but not instantly. I am tired of his sorry excuse repeated over and over by progressives that if it wasn’t for President Bush, we wouldn’t have to build on this deficit. I know he got dealt a shitty hand. But it didn’t force him to fold when he got his party’s nomination. Since when do two wrongs make a right? What I think, is that he’s happy to deal with the problem because it allows him to pass more spending and promote some of his socialist views under the cover of recovering the economy. I don’t think it’s some sinister plot to destroy America…but he has made no qualms about hiding that he believes government can cure-all that ails us. Someone in this country, needs to make the tough decisions and get us back on track fiscally before our dollar has no value or our debt to foreign nation’s leads to something catastrophic.
First of all, with all the criticisms I have with the budget, I have to point out where the government can run effectively and still prosper. 10 years ago, President Clinton’s 2001 budget had outlays of $1.7 Trillion and receipts of $1.83 Trillion for a budget surplus. In 10 years, spending has inflated to $3.5 Trillion, with receipts earned of $2.1 Trillion. Considering inflation, government spending has increased 90% in a decade. Not only must spending freeze, it must be cut just to make us viable enough to cover our spending with our tax revenue. We need to borrow 40% of our spending from foreign governments, that we cannot rely on as a bank to harbor our mistakes forever. It’s a must that we get back to fiscally conservative practices that we haven’t seen since 2001.
Here are some quick numbers from the budget. What jumps out at you are the trillion dollar deficits, year in and year out. I understand that you can’t accurately project the future budgets without knowing where the economy is at that time. But it shows a lack of vision by the President that they are announcing that for the next decade they figure on a budget that continues to be in the red to the tune of $10 Trillion.
Remember the promised freeze to begin next year on non-discretionary, non-defense, non-major entitlement program parts of the budget? Well, that represents about 17% of the total budget spending that have the potential to be partly frozen. What it doesn’t address is that at some point, one of our future leaders will need to make a major decision on how to reform Social Security, Medicare and Medicaid. Obama will probably continue to punt this, because when Bush even suggested they look into privatizing Social Security – he got loudly chastised for even the thought. But in reality, if no reform is accomplished this decade, the only way we’d be able to pay the dues off while still running the programs would be to DOUBLE everyone’s tax rates.
Now the President is proposing taxing the rich more heavily to help increase tax revenues in a time of high unemployment to counter receiving less total revenue because of fewer workers. A dubious strategy considering the mounting evidence of how this will play out. Did you realize that in the last century, tax revenues have grown the most during periods of tax cuts by Coolidge, Kennedy, and Reagan? The burden of tax revenue hits the middle and lower classes HARDER when tax cuts are raised. People get rich because they are lucky or smart. And a smart guy is going to know how to invest his money to limit his exposure to increased taxes. Whereas middle/lower class has all their funds exposed because we need it to be more liquid. How would you react if someone told you they were going to take a greater share of your earnings? Probably hide it (legally) from the tax code, right?
Where are some of those increased spending dollars that are promoting job growth going? Well here is $550 Billion of it:
- Defense- $58 B
- International Affairs- $13.6 B
- Science & Space- $3.5 B
- Energy- $14.2 B
- Natural Resources- $11.4 B
- Agriculture- $4.3 B
- Transportation- $22.1 B
- Education/Training- $62.7 B
- Health- $38.0 B
- Medicare- $27 B
- Unemployment- $71.7 B
- Welfare/Assistance- $78 B
- Social Security- $38.5 B
- Veterans Programs- $29.5 B
- Dept. of Justice- $3.5 B
- General Government- $7.2 B
- Interest on Debt- $42 B
And finally, one of the scariest parts of the budget was not even in the budget. Despite comments made previously by Orszag when he felt the bailout to Fannie Mae and Freddy Mac should be included in the budget, now that he is control of the budget, he conveniently overlooked it. So now, hidden from the American public, is an additional $6.3 Trillion dollars that our government has guaranteed to cover their debt.
I am not trying to play this off as easy. It’s mind-numbingly difficult work. But you run for elected office to make difference for the country. Health Care, Clean Energy, Financial Reform, Job Recovery….none of that will have the impact on the President’s legacy more than his success or failure at improving our dire economic future.