Monday, August 31, 2009


--Patriot Post

In May, when the federal deficit was projected to be $7 trillion over the next decade, President Barack Obama was asked, "At what point do we run out of money?" His reply was actually rather candid: "Well, we are out of money now," he said. Last Friday, the administration adjusted its deficit projection -- upwards, of course. The White House now says the number will reach $9 trillion, including $1.6 trillion this year and $1.5 trillion next year. So much for The One's promise to end the years of "borrow and spend" budgeting.

The Congressional Budget Office simultaneously projected a deficit of $7 trillion over the next decade, a lower number because the CBO considers only current law, not White House proposals. The Wall Street Journal reports that "these deficit estimates are driven entirely by more domestic spending and already assume huge new tax increases. CBO predicts that debt held by the public as a share of GDP, which was 40.8% in 2008, will rise to 67.8% in 2019 -- and then keep climbing after that. CBO says this is 'unsustainable,' but even this forecast may be optimistic."

Among the problems with the White House estimate is that it depends, in part, on raising $640 billion through the cap-and-tax bill as well as another $200 billion in international business taxes. Both bills face opposition in the Senate, even from some Democrats. And these new taxes aren't guaranteed to produce more federal revenue. Instead, we can count on cap-and-tax to depress the economy, resulting in less revenue. The White House already expects unemployment to hit 10 percent this year.

The CBO estimate, meanwhile, is based on the ridiculous premise that Congress will hold spending to the rate of inflation. The Journal remarks, "CBO actually has overall spending falling between 2009 and 2012, which is less likely than an asteroid hitting the Earth." The CBO also assumes that all of the Bush tax cuts will expire, even those for lower and middle class families.

Finally, the president's crown jewel, ObamaCare, projected to cost at least $1 trillion over the next 10 years, is entirely omitted from the deficit estimate because Obama pledges that it won't add to the deficit. Next, he'll be trying to sell us some oceanfront property in Arizona.

No comments:

Post a Comment

Meeting with Uighur leader Rebiya Kadeer

Visiting Iraqi refugees at Jordanian girls' school.