What part of “we are out of money” does our President fail to understand? Was it only last month, in the State of the Union address, that President Obama intoned, “Now that the worst of the recession is over, we have to confront the fact that our government spends more than it takes in; that is not sustainable”?
Then not 30 days later, he throws this reeking turd of a budget on the table and claims “look at this; I have saved a trillion dollars over 10 years!” Of course, what he does not say is that the budget for 2012 spends $1.65 trillion more than the government takes in. In other words, while his 2012 budget may save $100 billion, it spends and additional $1.65 trillion we don’t have.
Savings like these will leave us bankrupt in short order. In fact, what Mr. Obama is doing is lying to us. He isn’t saving us $1.1 trillion over 10 years, he’s costing us an additional $10-11 trillion over 10 years because nowhere in his budget projections does the deficit even begin to approach zero; indeed, it barely falls below $1 trillion over budget each year!
Yes Mr. Obama! You may have “saved” us $100 billion this year; but you overspent by $1.65 trillion doing it! This is, note, the largest dollar amount deficit in American history.
Was it back in the dim, dark past of November 2010, all of three months ago, that we had a national election? Was it way back then that Obama and the Democratic Party took, what Mr. Obama himself described as a “shellacking” at the polls, one of the most resounding defeats for a political party in the history of the country? Was not one of the main themes of that election that we were spending way too much money and needed to rein spending in? Was that not one of the main messages of the Tea Party protests? (I know it was at the three I attended.) And did President Obama at that time and several times since not say that he had “gotten the message?”
One has to wonder, what message he received. In the 2012 budget, there is loads of new spending authority: increase Department of Education by $11 billion (because things will improve if we only throw more money at the problem), give an additional $11 billion to bail out the postal service which is drowning in debt (they lost $7 billion last year and have exhausted their line of credit with the U.S. Treasury), and of course a brand spanking new $53 billion imitative to build high speed electric trains to name a few.
Why high speed trains? Because, well, Japan and Europe have them, so we should too. Because we seem to have more money than we know what to do with, and public rail has been so successful in the past. Why people are just queuing up to buy tickets. Oh wait, that’s right, they aren’t, see Amtrak as an example. But don’t worry, they will! And who cares if we don’t have the money? We need high speed trains! And windmills, and solar thingies, and green technology, and all that other neato stuff. Our nice buddies, the Chinese are only too willing to lend us all the money we want, and we’re good for it - just ask anyone. We’re the United States of America after all. And anyway, deficits don’t matter (unless Republicans are running them); ask Bob Bechtel, Democratic strategerist. He said so just last night on Fox News.
Hey I like that idea! I wonder if I should try it at home. I’ll just buy all the fancy geegaws I want; as long as I buy them on sale, I can afford them because I will be saving so much money. I am sure I can get the credit card companies to go along with it because they will be making so much money off the sales themselves by charging the merchants the fee they charge. I bet after a while I will be able to save more than I make! Eureka! It’s a financial perpetual motion machine! I will be rich!
Of course, most of us are smart enough to know that it really doesn’t work that way. One wonders why the President of the United States, who is supposed to be such an intelligent man, way more intelligent than that moron George W. Bush, doesn’t realize that also.
But then again, perhaps he does realize that – and just doesn’t care. He has an agenda he wants to push forward, and by golly, he’s going to do it. Full steam ahead! Only problem is, how do you claim to be balancing the budget when it is obvious to all who care to look that you aren’t doing so at all?
Well, most American’s don’t bother to look. There are those who are partisan to the left and will agree with most everything Obama wants to do; some of them even claim he isn’t doing enough! Then there are those who are partisan to the right and wouldn’t support Obama if he suddenly became Ronald Reagan, which believe it or not, the media and Democrats are trying to portray him as; funny, they couldn’t stand Reagan when he was actually in office. Then there are those who only get interested in politics a week or so before the national elections – they will come out of hibernation around October 2012, so no need to worry about them. Then there are those who couldn’t care less in any event.
For all those Americans who take their news in 15 second sound bites because they have much more important things to do and really can’t be bothered, we have a new term; “primary balance.”
So how does a budget, which is hovering around $700 billion over budget suddenly and magically become in balance? When it is in “primary balance” of course. So all the president has to do is get on the tube and tell us “the budget is in primary balance” and we will key on the words “budget” and “balance” and all will be well with our world. It will be up to the Republicans to explain that we are really $700 billion overspent. And it will take them more than 15 seconds to do so, which means that the vast majority of Americans will tune it out and move on to something more exciting – like “Sex in the City” reruns, or “Criminal Minds”.
And it takes a criminal mind to come up with a hoax like this and to attempt to pull it over on the American people - an Enron-like criminal mind.
Simply put, “primary balance” means that the federal government’s budget is balanced – IF you don’t include paying the interest on the national debt.
Well, how bad can that be anyway? Interest on $20 trillion or so? Let’s see. According to the President’s proposed budget (page 176), in 2017 the budget will be in “primary balance”; in fact, from 2018-2021 we will actually be in surplus, as far as “primary balance” goes. And the actual projected deficit in 2017, you know, the amount we owe in interest on the money we have been borrowing? Only $627 billion. Of course, that assumes that interest rates (and inflation) remain low. Oh yes, and that the economy grows at a brisk pace. But we can make those assumptions, right? And of course, we will need to borrow that $627 billion since although our budget is in “primary balance” we still have to actually pay the interest on the debt to our creditors, I am sure they will continue to be eager to finance us.
Then again, since we have now started borrowing money from ourselves, buying our own debt, perhaps this will not be a problem. Surely we can borrow from ourselves to pay ourselves back and that should cause no problems. Remember that little thing about inflation and interest rates staying low? Oops!
Just in case you haven’t noticed, while our government tells us that “core inflation” remains low, prices of commodities, things like corn, cotton, coffee, copper, and other things which are basic to just about everything we do, are rising rapidly. You have seen the effects already at the supermarkets. It is going to get worse. And as it gets worse, and interest rates climb as they inevitably will, the interest we pay on the national debt will climb as well. Much of our debt is financed in short-term loans. This means that the government will have no choice but to refinance them at higher rates. As these costs climb, the government can claim that the budget is in “primary balance” all it wants; they will still be underwater by ever increasing amounts. The money has to be paid back. What will we do when the lenders are no longer willing to lend?
And this does nothing to address paying back the principle of the debt so that our interest payments do not continue to skyrocket and consume and ever increasing share of our budget.
In 2008, when Barack Obama was running for office, one of the talking points the Democrats made for “change” was the “out of control spending” by the Bush administration. In the last year of his presidency, Mr. Bush’s proposed FY09 budget came in at a record-breaking $482 billion deficit. In reality, after the bailouts later in the year, the total would come to over a trillion; the first trillion dollar deficit in the nation’s history. This was a major reason why the nation voted for “change” in the 2008 election.
The Democrats said this level of deficit was "unsustainable." Barack Obama promised to get the spending under control. Is a projected budget deficit of $627 billion in FY17, $145 billion more than Bush’s final FY09 budget, which Mr. Obama said at that time was outrageous, an example of getting spending under control? Really?
He has had two years to try to fix the problem; one of the problems that he promised to fix. Currently, we are projected to spend $1.65 trillion more than we are taking in for FY11. Note that I didn’t say $1.65 trillion over budget. That is because congress, unable to accept political liability for this fiasco, never passed a budget for FY11. Here we are in February 2011, and we are still operating under a continuing resolution to finance the country. This $1.65 trillion is up from the $1.293 trillion over budget in FY10, President Obama’s first real budget.
The President claims that none of this is his fault; that it is all the fault of the previous administration, which left him in a financial mess that he had to spend mucho dinero to get us out of. Perhaps. That’s one way of looking at it – if you believe that government and government spending is the fix for all problems. Let’s buy his argument for now.
But is it President Bush’s fault that we apparently need to spend $53 billion for high-speed rail, just to give one example? Did the financial crisis cause this? Let me ask it this way; when you have maxed out your credit cards, and you are paying more in interest than you make in your paycheck, is your solution to run out and buy a Cadillac? And then claim it isn’t your fault, it’s those evil credit card companies and banks that gave you more credit than you could handle in the first place? Apparently that is how the federal government, under the Obama administration works.
The Obama Administration calls this “investment.” How can you afford “investment” when you can’t even pay your bills? Were I to attempt this with my personal finances, my creditors would call my loans and seize my “investments” to pay the bills.
If I saw any indication that this administration takes this problem seriously, then I would be more supportive. But all I see is more spending programs; more “investment”. More debt. No attempts to cut spending anywhere significant, and significant reliance on new taxes to make up the difference.
This is not what we the voters had in mind in 2008. It is also not what we the voters had in mind in 2010. Hello? Is anybody home?
One also has to wonder, why the newspapers are reporting this as “President slashes $1.1 trillion from the deficit over the next decade?” Are they stupid? Do they think we are stupid? When we gather in our thousands and protest this stupidity, will the papers wax esoteric about the “wisdom of the crowds” as they did with the protesters in Egypt? Or are the crowds only “wise” when they support a leftist agenda? We shall have to wait and see.
Barack Obama says that he attacked the budget “with a scalpel, not a machete.” When was the last time you tried to dismember an elephant with a scalpel?