This week, we got a view of the Federal Budget, and the budgeting process, as it will be practiced by Obama.
Now that the stimulus package has passed, and, apparently, with it, the threat of another Great Depression, we see the Obama administration has now become quite bullish on the economy, which they tout in their 2010 budget laughingly titled (I kid you not), "The New Era of Responsibility."
Pretty funny, eh. The administration that just gave us $800B of deficit spending, on top of a Democrat- authored $700B "bailout," topped by a $400B Omnibus Spending Bill, is now proposing to reduce the deficit (they have created) by half by 2013, through "spending" cuts. Trouble is, they project ahead spending on the war in Iraq to continue as it is today, then cut that, and count it as a spending cut, then, they layer on $1T in tax hikes on anyone making over $250k/year and call that a spending cut, then institute a "cap and trade" scam to control greenhouse emissions and count the proposed revenues from that as a spending cut.
From Peter Orzsag: "All told, there's $2 trillion in deficit reduction contained in this budget, roughly a trillion dollars in reduced spending compared to the current policy path that we are on [compared to the current policy path we're on - the Iraq War], and roughly a trillion dollars in additional revenue compared to the current path that we were on [tax increases, not yet enacted]."
Also in this budget, are some pretty rosy assumptions about GDP growth in the next few years. For 2010 (next year) they are predicting 3.6% GDP growth, and over 4.0% for 2011-2013. Those rosy predictions help them get to the 1/2 deficit reduction, and are unlikely to come true. Those predictions are about double the average for the last 2o years, and approach rates of the late Clinton years (of course, they are below the rates achieved during the Reagan years, so, maybe we can give them some credence).
I hope that the economy rebounds as this administration hopes, too. But, Bill Clinton and Ronald Reagan did not bind the economy with a $1.2T spending package, massive tax increases on the wealthy (history lesson - Clinton lowered cap gains taxes after he raised the income tax rates), huge increases in spending on health care, and a massive cap and spend tax increase scheme, and those are just the things I can remember.
It is what it is. Clearly, this guy's spending priorities would not be mine. On the Hill, it's going to be business as usual with earmarks and pork projects, every industry in this country is in danger of being nationalized, and we're looking at social policy that leads to the further breakdown of the family and the American identity.