Mar

The Out-of-Control Federal Budget

President Bush was a proliferate spending. Obama, though is in a league of his own. As in possibly the worst president in history sort of league.

I don’t pretend to understand all the numbers, what is on budget, what is off budget, but what I do understand is that our Federal Government is spending like there is no tomorrow.

The spending isn’t focused, it isn’t supervised, and much like a drunken gambling spree, the result will be a whole lot of money simply blown for the moment.

Here is the news on the deficits:

Worst of all, CBO says the deficit under Obama’s policies would never go below 4 percent of the size of the economy, figures that economists agree are unsustainable. By the end of the decade, the deficit would exceed 5 percent of gross domestic product, a dangerously high level.

The latest figures, even worse than expected by top Democrats, throw a major monkey wrench into efforts to enact Obama’s budget, which promises universal health care for all and higher spending for domestic programs like education and research into renewable energy.

The dismal deficit figures, if they prove to be accurate, inevitably raise the prospect that Obama and his allies controlling Congress would have to consider raising taxes after the recession ends or paring back his agenda.

But without referencing the figures, Obama insisted on Friday that his agenda is still on track.

“What we will not cut are investments that will lead to real growth and prosperity over the long term,” Obama said. “That’s why our budget makes a historic commitment to comprehensive health care reform. That’s why it enhances America’s competitiveness by reducing our dependence on foreign oil and building a clean energy economy.” Read more….

Do you want a more neutral source, then read this CBO projection:

Largely as a result of the enactment of recent legislation and the continuing turmoil in financial markets, CBO’s baseline projections of the deficit have risen by more than $400 billion in both 2009 and 2010 and by smaller amounts thereafter. Those projections assume that current laws and policies remain in place. Under that assumption, CBO now estimates that the deficit will total almost $1.7 trillion (12 percent of GDP) this year and $1.1 trillion (8 percent of GDP) next year—the largest deficits as a share of GDP since 1945. Deficits would shrink to about 2 percent of GDP by 2012 and remain in that vicinity through 2019.

Under current laws and policies, outlays are projected to decline from 27.4 percent of GDP in 2009 to about 22 percent in 2012 and subsequent years, as spending related to the current recession phases out, problems in the financial markets fade, and discretionary spending–under the assumptions of the baseline–declines as a share of GDP.

At the same time, under current laws and policies, revenues are estimated to rise from 15.5 percent of GDP in 2009 to about 20 percent in 2012 and subsequent years. Much of that projected increase in revenues results from the growing impact of the alternative minimum tax (AMT) and, even more significant, the scheduled expiration in December 2010 of provisions enacted in the recent economic stimulus legislation and tax legislation in 2001 and 2003.

Our analysis of the President’s budget proposals indicates that:

As estimated by CBO and the Joint Committee on Taxation, the President’s proposals would add $4.8 trillion to the baseline deficits over the 2010–2019 period. CBO projects that if those proposals were enacted, the deficit would total $1.8 trillion (13 percent of GDP) in 2009 and $1.4 trillion (10 percent of GDP) in 2010. It would decline to about 4 percent of GDP by 2012 and remain between 4 percent and 6 percent of GDP through 2019.

The cumulative deficit from 2010 to 2019 under the President’s proposals would total $9.3 trillion, compared with a cumulative deficit of $4.4 trillion projected under the current-law assumptions embodied in CBO’s baseline. Debt held by the public would rise, from 41 percent of GDP in 2008 to 57 percent in 2009 and then to 82 percent of GDP by 2019 (compared with 56 percent of GDP in that year under baseline assumptions). Link

For comparison, here are Bush’s annual deficits:

Now to be fair to President Obama, he was saddled with the second part of TARP, which for 2009 totals some $350 billion.

But…look at the deficits projected by the Congressional Budget Office for the next few years.

Looking the CBO’s numbers, the first line (Baseline) is the

President’s predictions. The second line is the CBO estimate. The third line tallies the difference between the two sets of numbers.

Looking that CBO numbers (which don’t use the rosy economic forecast that Obama uses) for 2009, Obama’s deficit is 1.845 trillion dollars. Four times the 2008 deficit run by George W. Bush. For 2010 we get a $1.3 trillion deficit. In 2011, it is $970 billion, still twice the largest Bush deficit.

These numbers aren’t even sustainable.

Take a look at this graph, which puts the Obama deficit in terms of its percentage of GDP (Gross Domestic Product):

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