The latest CBO report:
According to CBO, the Obama budget plan would run up much larger budget deficits and pile up even more debt than the administration reported in February.
Over the period 2010 to 2020, CBO expects the Obama budget would run a cumulative deficit of $11.3 trillion — $1.2 trillion more than the administration predicted. By 2020, total federal debt would reach an astonishing $20.3 trillion — up from $5.8 trillion at the end of 2008.
The president likes to say he inherited a mess. He did in fact enter office during a deep recession that sent deficits soaring on a temporary basis. But his policies have unquestionably made an already difficult medium- and long-term budget outlook much, much worse. The problem is that President Obama is a world-class spender. He wants to pile massive new commitments on top of a bloated and unreformed government. He is willing to raise taxes to pay for some of his wish list, but far from all of it. For the rest, he plans to run up the nation’s debt with reckless abandon.
Fortunately, the people are finally on to him.
[Mid-morning update]
More from Veronique de Rugy. Look at the graph.
Fortunately, the people are finally on to him.
Site a source please. Those of who thought Obama was going to be a disaster have had our suspicions confirmed, but rest of the population still seems to be waiting for their skittles to pour out of the back end of the Unicorn in Chief.
No, he did inherit a mess. The War on Iraq was certainly not free, nor were some of the other useless measures taken by the previous administration. Even a child would have figured out you do not solve a deficit by reducing income and increasing expense at the same time. Military adventures in foreign lands cost time and money.
However instead of getting out of the hole, this administration decided to dig deeper. The stimulus by this administration was too big, and spent mostly on the wrong things. You do not do stimulus by making people buy consumer goods, nor by injecting money into loosing enterprises, or into non-productive segments of the economy. The money would have been better spend on a lot of other things, from a better electric transmission grid, to electric vehicle R&D, nuclear power R&D, or coal to liquids. Things that will help propel the economy after it gets out of the recession, or avoid getting deeper into it.
Oh and just dump corn ethanol subsidies. A lot of these ‘renewable’ energy products are scams, this being among the worst. Wind and solar thermal are probably the ones that make the most sense, but even those are not economic to build just anywhere.
As I recall, Obama was in Congress the last two years before he moved to 1616 Pennsylvania Avenue, wherein he voted for TARP and the various budgets. Saying he “inherited” the problems with the economy is less than completely honest, unless one can “inherit” things that one has helped create in the first place.
A caller on Rush yesterday had the most pithy sound bite: Obamacare, like Medicare, Medicaid, and Social Security before them, are all Ponzi schemes.
The money would have been better spent
No, the money would have been better not spent. Taxation is a necessary evil for national security. Everything beyond that is a power grab we should not allow. Infrastructure is a state issue fostering competition between the states which works for the benefit of all.
We’ve got to defang this monster. I’m wondering if the fair tax could do that? It only has two parameters the voters have to keep their eyes on… the flat tax rate and that monthly payment that makes it progressive.
What’s really ugly about this is that the CBO is on Obama’s side (via Democrat control of Congress). It’s likely that the CBO has had to make a number of rosy assumptions (like accepting the administration’s claim that war costs will drop to $50 billion per year over the long term) that lessen the estimated size of the deficits.
It’s not a disaster if you’re on the team that gets to start seizing more assets and enacting ’emergency measures’ to cope with the ‘unprecedented’ nature the situation facing the country.
Can anyone in CA or NY explain why, if these are the most sophisticated, forward-thinking places (on the planet, no doubt), said sophistication and thinking can’t get the bills paid?
To save you the trouble, you can save the ‘but we’re net payors’ argument – it’s rubbish, even when Krugman tries it.
Also, compare the CBO’s 2010 projection to its 2009 projection. The deficits for FY 2010 and 2011 have increased substantially. That isn’t GWB’s fault.
At this point, I’m betting that we won’t see an Obama budget with a deficit below a trillion dollars and the relatively low figures for 2012-2015 will turn out to be completely unrealistic without some serious budget cutting or an extremely vigorous economy.
Karl,
In all fairness to the CBO, they are stuck with accepting the assumptions of whoever submits the bill they have to score. Even if they know most of the assumptions are wrong, they have to buy into them.
Could it be those relatively low figures for the years 2012-2015 reflect the tax payments we’d be making if ObamaCare passes and before most of the payouts begin? It’s all part of the fradulent trick they use to get the 2010-2020 ObamaCare numbers below a trillion dollars. The taxes begin immediately but the program doesn’t begin until years later.
And what will they be doing with those tax revenues before the program begins? Why, spending them, of course! Anyone who believes otherwise is dumb enough to believe Obama’s promise not to raise taxes on those making less than $250,000 a year.
Karl said:
It’s ALWAYS Dubya’s fault cause he is DUMB!!!! Dumb as sticks and mud trying to count it’s Cheneyburton money but can’t count past 3 cause he’s an idiot. And anybody who doesn’t think that Obama is doing everything he can with his impressive intellect and incredible reasoning to repair 8 years of Chimpy McHitler raping and pillaging the helpless American people eats their own boogers, and other people boogers too!!! So I’ve made my point and the facts speak for themselves and their ain’t nothing you can do about it except make more stupid faces and say more stupid crap. Now SHUT UP! [/snarkoff]
There, I think I just about got the gist of every libtard response one could ever encounter on the subject. Preemptive strike.
But his policies have unquestionably made an already difficult medium- and long-term budget outlook much, much worse.
Just to be clear, that isn’t what the CBO is saying. The CBO projection is that Obama is significantly lowering the deficit from what it would have been without his policies.
We have a short-term fiscal problem caused by the near-depression that we’re crawling out from under, and a long-term problem caused by health care cost inflation. The overwhelming consensus of neutral observers is that Obama’s policies have softened the impact of the recession, and (if health care reform passes) will be the first serious attempt to deal with health care cost inflation.
Everything else is in the noise, but even on the small stuff Obama is doing a better job of reining in deficit spending than his predecessor. See for example the reform of student loans, which will save billions per year.
Four years. And it’s 1600 Pennsylvania Avenue.
I had to focus on that because the condensed stoopid in Jim’s comment at 12:47 p.m. made my eyes bleed.
The CBO projection is that Obama is significantly lowering the deficit from what it would have been without his policies.
Unadulterated spin. The CBO is just crunching numbers. They do not say anything about policy. Alternate policies are strawman of the most magical sort since the spin does it’s job without needing to specify any of those messy details.
Saving millions of jobs? Pure BS. The unemployment rate is what it is. He’s not fooling any but the fools.
Without his policies we wouldn’t have this huge sucking sound aimed at the taxpayer. Government policy kills economic growth by taking from some to give to others AT LESS THAN 100% efficiency. This hinders the economy. Probably without exception. They prop up businesses that should fail taking business away from those making better management decisions.
You got off easy, I think I ruptured an internal organ.
I am sure Jim is a nice guy but the amount of denial he has to engage in to keep from modifying his beliefs to conform with reality is simply astounding.
Jim,
where DO YOU get this stuff!? Every article, regardless of the outlet, says just the opposite and has for MONTHS. We all know the CBO uses numbers given them, but even Obama’s own numbers say up, up, up, when CBO runs them.
You actually live in an alternate universe and comment here via a black hole, don’t you Jim?
A universe where Obama is great for the economy, a whiz at military tactics, a staunch defender of American History as it really occurred, a universe where he’s a strict Constitutionalist defending our heritage and borders, where Bush really is related to Hitler via incestuous sex with an animal , Dick Cheney is Satan’s love child and Unicorns have a dent, not a horn on their heads?
Close?
Or are you just fact checking impaired?
The deficits going on now and coming up, by much of the government’s own calculations, are records in just about every way. How anyone can be so partisan as to spin that away is beyond me. It would be more honest to say that great social justice is expensive or some b.s. like that than to deny the numbers.
Bush and the GOP Congress spent money like drunken teen-age boys in a brothel with stolen credit cards, but they look positively responsible compared to today’s government. Which is one reason even Democratic leaders are almost openly conceding November.
I’m still waiting for an explanation on how private health care costs are responsible for increasing the deficit. I won’t hold my breath.
Deficit spending under Bush and the Republican congress was on a projected track to be budget neutral until the Democratic congress took over and instantly sent spending into a tailspin. Obama’s proposed budgets and the crazed out zeal at which the Pelosi/Reid crew pass them have managed to spend as much money in one quarter than the Republican administration could muster in one year.
The Republicans most certainly added to the total debt with the Iraq war. But guess what, the decided lack of uproar from the majority of people would suggest that most everyone values the defense of our nation. And furthermore, the American people understand that the federal gov’t is at least constitutionally obligated to provide for the defense of the nation.
I shake my head with whiplash fervor at the insistence that the tax rate cuts had anything to do with our economic woes. Off the top of my head the Bush tax cuts were 17% yet revenue’s increased by 27%, hmmmm. In fact it was most likely the tax rate cuts that lead to incredible rates of GDP growth and fueled the gradual decline in deficit spending up through 2005. If anything, it is a shame on Bush and the Republican congress for not making that fact more succinctly clear when it came time for reelection.
How often do we have to show these charts before they start to sink in with the deniers.
Also, compare the CBO’s 2010 projection to its 2009 projection. The deficits for FY 2010 and 2011 have increased substantially. That isn’t GWB’s fault.
Why not? I kept hearing in here at the time that the poor state of the economy during GWB’s first term was due to Clinton. This guy has been in power for little over a year. Of course, the fault was that the crisis caused tax revenue to drop, nevermind that they both increased spending. Right? Oh.
I think this chart is informative:
http://www.heritage.org/research/features/budgetchartbook/Images/federal-spending_04-580.jpg
“Nice” slope starting in 2001. Still I bet it is getting closer to vertical now.
Maybe the movie 2012 was really an allegory of the financial collapse that may happen in a couple years.
And, by the way, as a Republican conservative I am unable to defend Bush’s spending. He spent money that he and his advisors thought would help build coalitions of supporters, using the typical Washington strategy of using pork to buy enough votes to stay in power. If President Bush had excercised some leadership for fiscal restraint, I don’t think the REpublicans would have been bounced out in 2008. It was not ALL due to 911 military spending. No Child LEft Behind, which the President thought would be his signature compassionare conservative program was right about requiring testing, but wrong about closing underperfomring schools and shoveling billions more into what should be state and locally-controlled schools. I agreed with the testing, so people would know, one way or another, whether their schools were crap or not (like putting labeling on food so you know what you are buying) but the decision to close schools or put more money into them should be a local decision.
Just because Obama is a far more rabid spender than Bush was does not mean Bush should be let off the hook for his fiscal policies.
Don’t worry — everything will be great because Obama is in charge!
We have a short-term fiscal problem caused by the near-depression that we’re crawling out from under
We have a short term economic problem being turned into a long term economic problem via a variety of poor decisions and counterproductive generation of uncertainty.
Mr. Maron – here’s a stab at a possibility. Private health care costs are far too high in the USA – that’s a given, and it is not entirely because of the greed of doctors and the rest of the medical industry; it’s partly because of the greed of lawyers. This money has to be found somehow, and partly it’s found in the way that has caused much trouble for the economy lately. That way, of course, was riding the house price bubble.
Now the bubble has burst, and that is partly what’s causing the deficit.
I wonder what happened to the shortage of workers we were suppose to have starting around now due to the baby boomers retiring?
There are two ways to solve a shortage of workers… one is to get more workers. THe other is to get rid of jobs.
“Private health care costs are far too high in the USA – that’s a given, ”
You lost me right there because you have not explained how they are too high. For example, if paying a higher price means quicker access to treatment, how is that too high if the alterative is a long wait and a worse condition?
I always wonder what they think we should be spending our money on, notwithstanding that it’s our money, not theirs. Starbucks? Smart cars?
Jim, where DO YOU get this stuff!? Every article, regardless of the outlet, says just the opposite and has for MONTHS.
Those outlets are conning you, and millions of others. They are selling you a story that goes something like:
* Obama is spending money on things like TARP and ARRA, and the amounts sound huge; those programs are increasing the deficit.
* The deficit is enormous, as is the accumulated national debt.
* Deficits and debt are bad for individuals, and bad for the economy.
* The economy is in bad shape, unemployment is high, and lots of people are personally feeling the effects, and having to spend less and do without.
* Therefore, it is Obama’s policies, most outrageously his insistence on spending lots of money right now, when I and the people around me have to spend less, that are to blame for the state of the economy.
Every statement is at least partly true, right up to the last one, which is totally false. Can you spot the missing information, and logical flaws? Some hints:
* What percentage of the increase in deficits is due to programs like TARP and ARRA, and what percentage is due to the collapse of revenue and explosion of social safety net spending that accompany every recession?
* What, according to mainstream economists, would the unemployment rate be today if Congress had not passed ARRA?
* What, according to the CBO, would the budget deficit and debt picture look like if Obama had left federal tax and spending policies alone?
Wake up. You’ve been brainwashed.
I’m still waiting for an explanation on how private health care costs are responsible for increasing the deficit. I won’t hold my breath.
Medicare spending is huge, and growing rapidly, increasing the deficit. Medicare spending growth is driven by private health care costs, because Medicare pays for the same treatments and medicines as private health insurance.
For example, Newsweek mentioned this week that the U.S. spends $26.2 billion on spinal fusion surgeries each year, even though the research shows no benefit from the $75,000-a-pop procedure. A lot of that $26 billion comes from Medicare.
But Jim, Medicare only pays something like 80 cents on the dollar compared to what the private sector pays in the health care market. That’s why more and more docs are refusing to take on new Medicare/Medicaid patients.
Jim,
I was never a supporter of all the Bush spending. Now I’m even less a supporter of Obama’s spending MORE.
And I still don’t see how spending MORE, borrowing MORE and collecting LESS in revenues is lowering the deficit. And I still can’t find CBO saying it will.
You make the same mistake many others make, that those who don’t support Obama, supported Bush.
Not so, especially where spending is concerned. They’re all writing checks, our wallets can’t cash, and it needs to stop, and I don’t care of the last name ends in (R) or (D).
But Jim, Medicare only pays something like 80 cents on the dollar compared to what the private sector pays in the health care market.
And when private costs go up 20%, and Medicare keeps paying 80 cents on the dollar, Medicare spending goes up 20%. And the deficit picture gets that much worse.
That’s why more and more docs are refusing to take on new Medicare/Medicaid patients.
In other words, private health care inflation drives public health care spending, and the federal budget deficit.
And I still don’t see how spending MORE, borrowing MORE and collecting LESS in revenues is lowering the deficit. And I still can’t find CBO saying it will.
Part of the problem is that you think Obama is spending more and taxing less than would have been the case otherwise. Follow the link.
Thank you for that lovely non-sequitur, but it doesn’t exactly help the problem – namely, how do you expect to keep squeezing blood (medical services) from turnips (a broke republic and doctors who expect to be not only paid, but paid commensurate with the value they deliver)? What does ObamaCare, or any other command-control scheme, do to fix that problem?
Incidentally, your analogy is all wrong – the Feds say to the docs “this much and not a penny further.” That number currently happens to be about 80% of the cost of an average treatment. Naturally the rest of us get to pay the overage, but nowhere in that model do I see a mechanism for increasing the outlays from the Feds.
Jim,
That is ridiculous. Nothing that Der Schtumpy said indicates that he thinks Obama is spending more than otherwise (I suppose you mean if McCain had won). The clear statement is that Obama is spending more than should be spent. It is the spending not who does the spending that is the problem.
Incidentally, your analogy is all wrong – the Feds say to the docs “this much and not a penny further.” That number currently happens to be about 80% of the cost of an average treatment.
The Medicare reimbursements are revised every year, and they track private payments; otherwise it wouldn’t be 80%, it’d be much less. And it isn’t just the per-service payment that matters, it’s also the number of visits/tests/treatments/services. As doctors order more of everything for their private patients, they do the same for their Medicare patients, and the federal deficit spirals upwards.
It is the spending not who does the spending that is the problem.
If you want less spending, you need a “who” to propose and pass the laws that would make those spending cuts happen. There is no such “who” on the scene — where deficit reduction is concerned, Obama is as good as it gets in U.S. politics today.
p.s. If you really think there’s a “coming fiscal disaster” you should call your Rep and Senators to urge them to pass a certain bill that will reduce the deficit by $700 billion over the next 20 years. It’s also known as the Senate health care reform bill.
As doctors order more of everything for their private patients, they do the same for their Medicare patients, and the federal deficit spirals upwards.
Another brick for the tort-reform platform, I see.
Another brick for the tort-reform platform, I see.
Texas has tort-reform, and health care inflation there continues apace, unfortunately.
you need a “who” to propose and pass the laws that would make those spending cuts happen
2010. 2012. …and they all only get one chance.
Those outlets are conning you, and millions of others. They are selling you a story that goes something like:
* Obama is spending money on things like TARP and ARRA, and the amounts sound huge; those programs are increasing the deficit.
* The deficit is enormous, as is the accumulated national debt.
* Deficits and debt are bad for individuals, and bad for the economy.
* The economy is in bad shape, unemployment is high, and lots of people are personally feeling the effects, and having to spend less and do without.
* Therefore, it is Obama’s policies, most outrageously his insistence on spending lots of money right now, when I and the people around me have to spend less, that are to blame for the state of the economy.
This is much better than your usual stuff, Jim. Let’s keep in mind that even the last statement is “mostly true”.
Burning $470+ billion on TARP and ARRA spending alone ($350 billion of TARP spending that Obama had direct control over plus at least $120 billion in ARRA spending) contributed significantly to the deficit (and the ARRA spending is contributing significant to near future deficits as well). A high deficit does contribute negatively to an economic recovery. Recall also that there is other significant spending like Cash for Clunkers (sucked up $3 billion).
And what have we gotten for this? A higher unemployment rate than “mainstream economists” claimed we would have gotten, if we had done nothing.
A more nuanced view will note the following:
1) Obama hasn’t focused on economic recovery. For example, only a fraction of the ARRA spending happened in the 2009-2010 fiscal year. Most, if not all ARRA spending should have happened in FY 2009.
2) The spending has been heavily partisan. Democrat constituents have benefited greatly (labor unions, teachers, government employees, etc) at the expense of everyone else.
3) Obama’s other actions like extension of COBRA, health care “reform”, cap-and-trade, and other business-hostile activities inject a great deal of uncertainty into the business environment.
4) You really can spend too much for an economic recovery. I contend this has been done in the FY 2009 budget.
The Democrats are always quick to use the Iraq War as the excuse for any sort of deficit they’re going to have for the next twenty years… but you know what? They’ve had the administration and congress for fourteen months or so… we’re no longer _in combat_ in Iraq… everyone’s back on bases, and there isn’t any aggressive stuff going on.
But they’re still rotating troops in and out of Iraq.
If they’re not going to be fighting in Iraq and they’re not going to be fighting against Iran or anything like that… why have them there? Why not have them in bases in the US, where they can take the weekend off with their families? It would also be cheaper than deploying them there.
IF the war had absolutely NO valid reason, which is what the Democrats _say_, why do they keep deploying the troops?
(there’s two possible answers to this: a) some of the reasons we went to Iraq were more valid than the Democrats have represented, and in spite of believing in these reasons the Democrats don’t want to lose face by admitting they were wrong…. or b) they just like wasting money. I don’t know which one of these answers is correct).
$350 billion of TARP spending that Obama had direct control over
How much of that money hasn’t been paid back?
A high deficit does contribute negatively to an economic recovery.
How, exactly? The standard answer is that deficits keep interest rates high, but rates are near zero today.
And what have we gotten for this?
We avoided a depression.
The spending has been heavily partisan.
You’re projecting. Government payrolls are down since Obama took office.
How much of that money hasn’t been paid back?
I’m guessing virtually all of it. Especially given that they dumped a bunch of it (somewhere around $70 billion) into GM and Chrysler, businesses that show no indication of being able to pay back that debt/investment. That’s a sign of money that’s not coming back.
I’m guessing virtually all of it.
Funny, because over $100B was repaid before the end of last year, Treasury Dept. expects more than 25% of it to be repaid by the end of this year.
Since we’re being repaid with interest, or ownership in banks that have appreciated dramatically over the last year, it isn’t at all clear that TARP is going to increase the debt.