Thoughts on Barack Obama’s deficits.
[Thursday morning update]
Related thoughts from John Stossel: “No matter what the numbers say, it’ll be called a success.”
[Another update a few minutes later]
Happy fiscal New Year! Out with the old deficits, in with the new.
For each of Obama’s years in office, the deficit is projected to be larger than any year during Bush’s terms.
Second, Obama is right to note that he inherited a large deficit in fiscal 2009.
The second sentence makes the first (which immediately precedes it) irrelevant. For all but one of Obama’s years in office, the deficit is predicted to be smaller than the one he inherited. Bush made the fiscal situation he inherited worse, Obama is making the fiscal situation he inherited better.
The August 2009 projections for instance, do not include any of the president’s healthcare reform spending
Because the CBO is scoring health care reform as deficit-neutral, or better.
For all but one of Obama’s years in office, the deficit is predicted to be smaller than the one he inherited. Bush made the fiscal situation he inherited worse, Obama is making the fiscal situation he inherited better.
This is a fiscally insane statement. What Obama inherited was mostly a one-time event (TARP). He is cementing into place deficits larger than that every year going forward.
“The second sentence makes the first (which immediately precedes it) irrelevant. ”
TARP was supposed to keep the financial system from collapsing, period. It was a one time expense, so to speak. Obama has heaped discretionary spending on top of this beyond the dreams of avarice.
“Because the CBO is scoring health care reform as deficit-neutral, or better.”
They are?
From the CBO,
On a preliminary basis, CBO and JCT estimate that the proposal’s specifications affecting health insurance coverage would result in a net increase in federal deficits of $500 billion over fiscal years 2010 through 2019. That estimate primarily reflects $287 billion in additional federal outlays for Medicaid (net of reduced outlays for CHIP) and $463 billion in federal subsidies that would be provided to purchase coverage through the new insurance exchanges.
That Kool-Aid is bad for your brain. You should do a PSA about it.
Your brain (Rand)
Your brain on “Progressive” Kool-Aid (Jim)
What Obama inherited was mostly a one-time event (TARP).
Which Obama voted Yea. In addition, Obama was a member of the Democratic Congress from 2006 and 2008 that wrote the spending bills that President Bush signed.
The economy began to tank after the Democratic Congress took over. Democrats can blame Bush all they want, but the facts are obvious. All opponents have to point out is that the last time the Dow Jones Industrial was over 14,000; there was a Republican Congress. Also, after the 2000 Dot com bust and 9/11 attacks that increased unemployment, the Republican Congress lowered the unemployment rate down to 4.6%, and then the Democratic Congress took over and the rate went up to 5.8% (and will likely be over 10% by years end).
The next election isn’t for President, and the Democratic Congress has proven to be an absolute failure.
What Obama inherited was mostly a one-time event (TARP).
No, what he inherited was the worst financial crisis since 1929. Look at the chart in the linked article. The January projected 2009 deficit was bigger than all but one of the projected 2010-2017 deficits before Obama even took office.
Bill:
I don’t know where your quote comes from, but the CBO report on the Baucus bill states:
Click my name for the whole thing.
No, what he inherited was the worst financial crisis since 1929.
And then he and the Congress worsened it more with Porkulus. These economic genii told us that if we didn’t pass their political payoff to their constituencies right away, without reading the bill, that unemployment would exceed eight percent. It’s now close to ten. But please, continue to beclown yourself defending them.
TARP has already been repaid. Arguing with someone who thinks that Bush caused any of this if silly.
Jim, the same place . Go to page 4. the devil’s in the details.
The thing about “Jim” is that his sum(p log_2 (1/p)) values are so low.
And then he and the Congress worsened it more with Porkulus.
Only in your imagination (does anyone really think the economy’s in worse shape today than it was in January?!?). According to Goldman Sachs and Moody’s, ARRA added approximately three percentage points to growth in the second quarter.
Jim, the same place . Go to page 4. the devil’s in the details.
Are you serious? You are citing the fiscal effects of one part of the Finance Committee bill as if it’s the whole thing! The detail you cite is a $500B increase in spending. The details you leave out (from page 3) are a $409B reduction in spending, and a $139B increase in revenue, resulting in the net $49B deficit reduction that I referred to above.
To repeat: according to the CBO, health care reform will not increase the deficit.
The thing about “Jim” is that his sum(p log_2 (1/p)) values are so low.
And, as usual, when the facts are inconvenient the ad hominem comments appear.
As usual, you are assuming the CBO is assuming the revenue will keep up with expenditures. This letter is just a statement of what happens if projections are correct. Show me where spending hasn’t been higher and revenues lower than projected and I’ll give you the difference. You also avoid this HUGE caveat:
Those estimates are all subject to substantial uncertainty. Furthermore, although we understand that the published document describing the Chairman’s mark was intended to reflect the specifications provided to us, CBO and JCT have not reviewed that document to determine whether it conforms in all respects to those specifications.
Which means, if all your WAGs come true, this is what will happen…maybe.
Only in your imagination (does anyone really think the economy’s in worse shape today than it was in January?!?)
Yeah, I’m pretty sure that people who had jobs then, but don’t now, think that.
I wonder if Jim has heard durable goods orders plummeted in August.
Now thats a double-dip of stimulus!
This from the man whose strategy to win a debate is simply to reject every counter-argument regardless of facts, logic, or his own past statements.
And, as usual, when the facts are inconvenient the ad hominem comments appear.
The following is not a fact:
Only in your imagination (does anyone really think the economy’s in worse shape today than it was in January?!?).
In what way is the economy in better shape now than in January?
Now back to the CBO, what I see is this:
Outgoing:
$287 bln additional federal outlays for Medicare (not what Medicare costs, additional)
$463 bln subsidies to purchase healthcare
$24 bln in tax credit to small businesses to encourage them to do what Obama says he not trying to do
Incoming:
$274 bln from hope and change (savings or receipts)
$215 bln from a new tax on the rich
$20 bln from penalities on individuals who want to opt out
$27 bln from penalties on businesses who want to opt out
$12 bln from fantasy land that hopes once again employers change individual health insurance due to government encouragement, which again is something Obama keeps saying in prime time addresses “isn’t going to happen”.
Note, the math doesn’t add up to a net gain (or reduction in deficit)…
So after reading the rationalle for spending $.75 trln to earn $.5 trln, because of a hope to insure 1/2 the elderly currently uninsured, you get more numbers…
By changing healthcare, we will get savings in Medicare and Chip, but how?
$182 bln by making permenant cuts in Medicare reinbursement to doctors
$123 bln by setting price controls
$48 bln by making temporary cuts in Medicare reinbursement to Hospitals
But to get that savings, a new Medicare Commission would have to be established, with no mention of the costs associated with that Commission. The job of the Medicare Commission is to make sure those predicted costs actually happen, because otherwise, spending growth is expected (as Bill Maron suggests).
Oh and some how $182+$123+$48+$23 (for the Medicare Commission doing a better job than the basic) = $409, in CBO math.
There are then caveats to all of the above…
In what way is the economy in better shape now than in January?
From Bloomberg, yesterday (click my name):
As usual, you are assuming the CBO is assuming the revenue will keep up with expenditures.
I am assuming no such thing, I am simply relaying the CBO’s projection that health care reform will reduce the 2010-2019 deficit. Given that projection, it takes ignorance (or chutzpah) for Veronique de Rugy to assert the opposite.
It shrank Jim.
On Planet Jim, getting worse less quickly than previously somehow constitutes improvement.
(does anyone really think the economy’s in worse shape today than it was in January?!?)
Yes, I do. Here are some Economic Indicators changing from Jan 2009 to Aug 2009.
Retail and food services sales, (Mil$) 313,593 –> 362,278
Durable goods (new orders in Bil$): 163.8 –> 164.4
New construction (in Mil$): 974,294 –> 941,879
GDP (2005=100): 2008:Q4 –> 2009:Q2 103.984 –>102.082
Manufacturing Sales (total in Mil$): 988,018 –> 978,430
Manufacturing Inventory (total in Mil$): 1,438,263 –> 1,332,543
Wholesale Sales (total in Mil$): 317,731 –> 314,522 (July)
Wholesale Inventory (total in Mil$): 425,915 –> 387,191 (July)
Housing starts (Seasonally adjusted in K): 531 –> 580
New home sales (in K): 329 –> 429
Exports (in Mil$) 124,004 –> 127,592 (July)
Imports (in Mil$) 160,967 –> 159,551 (July)
Number of employed (in K): 142,099 –> 139,649
The positive indicators are retail, durable and new home sales, housing starts, and exports.
The negative indicators are new construction, GDP, manufacturing sales/inventory, wholesale sales/inventory, imports, and employment.
That’s 4 positive indicators, and 8 negative. The economy might possibly be shrinking at a slower rate, but it is still shrinking.
John Stossel knows Jim?
John Stossel knows a lot of people like Jim. Unfortunately, there are far too many of them.
The GDP indicator trumps all.
“Given that projection”
They are “projecting” anything. They did the math without verifing the accuracy of the assumptions.
“…it takes ignorance (or chutzpah) for Veronique de Rugy to assert the opposite.”
Not at all because the CBO themselves said they can’t verify the numbers. Pointing out the obvious pie-in-the-sky revenue numbers is what should be done.