This is my kind of spending. I just hope I can get a piece of it before they come after me for the bill.
Barack Obama started to lay out details of his all time record $3.55 Trillion budget plan for the coming year. $1.75 Trillion will be deficit spending, the largest deficit in history. (Oh, by the way, watch Treasury bills plummet in value because of oversupply.) Obama has called his budget the beginning of the ‘era of responsibility’; you can see the PDF file from the White House here. I am glad I am allowed to type it out, because if Ihad to verbally say it I couldn’t get the whole thing out without laughing. This is how Obama defines fiscal discipline:
That is $11,833 for every American. Or, if you only want to count taxpayers, that is $25,573.48 for every American Taxpayer.
So hope it is worth it to you. In any case, how are we going to pay for it?
First, A $1 Trillion tax increase, primarily on the wealthy. The biggest tax increase in world history. But that should solve the problem, right? Not even close. You want to know how much debt we are in? If we were to theoretically increase the tax rate on this group of people to 100%, we still couldn’t balance the budget! Yup, that is right, you can read about it here.
A tax policy that confiscated 100% of the taxable income of everyone in America earning over $500,000 in 2006 would only have given Congress an extra $1.3 trillion in revenue. That’s less than half the 2006 federal budget of $2.7 trillion and looks tiny compared to the more than $4 trillion Congress will spend in fiscal 2010. Even taking every taxable “dime” of everyone earning more than $75,000 in 2006 would have barely yielded enough to cover that $4 trillion.
Ultimately, what this means is that Obama’s promise to not raise taxes on the middle class is an empty one, unless he wants to take us deeper in debt. And part of that explains why Obama is pushing the Carbon tax; because although not directly imposed on the public, it is a virtual tax on every man, woman, and child in the country. It is also a very regressive tax from a progressive President.
Second, Obama plans on cutting major amounts of spending from the current budget. Obama plans major cuts in defense weapons systems, subsidies (especially farm subsidies) and corporate loopholes. Great, I can agree to that. Except, the proposal is dead on arrival: Democrats and Republicans, in ironically a bipartisan fashion, have already said the farm subsidies will not be on the table this year, since they were just passed last year. And the defense cuts are already garnering stiff opposition from specific legislators and many lobbyists.
Additional expenditures in the budget include possible bailouts of the auto industry, financial industry, and banks. This includes spending such as today’s announcement of the U.S. government taking a 36% stake in Citibank.
Some Blue-Dog Democrats are screaming about the size of the deficits. Well, at least someone has some brains. The Republicans are complaining too, but after 8 years of spending like there is no tomorrow, they don’t have any credibility. But other than that, no one is challenging the ridiculousness of claiming responsiblity at the same time that we are spending at amounts never seen in the history of humanity.
This is how ridiculous it is getting. Peter Orszag, Obama’s Budget Director, miraculous was able to reduce the budget by $2 trillion! Well, what it turns out it, as usual, they are using ridiculous projections. Since the projected deficit was $9 trillion, they now calculate they can cut that down to $7 trillion! A real bargain. Yeah, I am not so excited any more.
Obama, on top of all this spending, is somehow going to create a $634 billion slush fund to pay for health care. I thought the new health care plan was going to save money? Why do we to save 2/3 a trillion dollars to pay for a cost saving measure? Yeah, right. Stupid me.
Overall, this budget reaffirms my belief that the era of big government is back, better than ever. Obama makes the claim that this is the era of fiscal responsibility. First, he hits the two groups who are most likely to create jobs in a growing economy: the wealthy and businesses. How many jobs is the Obama tax increase going to cost American workers? Second, fiscal responsibility starts with the debts you already owe. Let me just point this out: have you heard the words ‘Social Security and Medicare’ in this conversation? Not really. Obama briefly mentioned it in passing, without providing any real details on the issue. That should tell you all you really need to know if there is real fiscal responsibility in Washington.