Obama’s new budget: Still more red ink

President Obama released his fiscal year 2013 budget proposal yesterday. A lot can, and will, be written about it — including writings by me on this blog. For now, just the bottom line:

Accounting for the roughly $200 billion in net deficits attributable to the 2009 “stimulus,” Obama has taken an inherited deficit of $1.21 trillion and borrowed an increasing amount of money in each of the three fiscal years since then:

$1.29 trillion in FY 2010

$1.30 trillion in FY 2011

$1.33 trillion in FY 2012

We are expected to believe that this number would shrink to “just” $900 billion in FY 2013 if Obama’s budget were implemented. Here’s why I say “expected to believe”: All of the reduction comes from higher taxes, and this administration has been very wrong in its revenue estimates before — most recently by about $230 billion this year. This is in largest part because the economy has yet to improve in the way the administration thought it would. And all of this is without even delving into the likelihood that Obama will get the tax increases he wants.

But let’s assume the forecast will turn out to be correct this time. Obama still will have missed — by a wide margin — his pledge to halve the deficit by the end of his first term.

Again, attributing $200 billion in 2009 deficits to his “stimulus,” his rosy scenario would have the deficit down by just 26 percent (32 percent in inflation-adjusted terms; 37 percent as a share of gross domestic product). Each of those numbers is a long way from 50 percent.

If reality next year turns out to be more like the last three years, however, we will be talking about single-digit increases in absolute terms (inflation-adjusted or not) and a 2 to 3 percentage-point drop relative to GDP.

All of this, in spite of rising revenues (no matter how they are measured) every single year of his presidency.

It’s the spending. It will always be the spending with this president.

– By Kyle Wingfield

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220 comments Add your comment

DaveS

February 14th, 2012
5:30 am

Thank goodness we are able to ignore deficit spending when there is a Republican in office. It only matters when there is a Democrat in the White House. Two unfunded wars and the collapse of the housing market happened on the last President’s watch. Try to remember that.

Ayn Rant

February 14th, 2012
6:36 am

…and still more need for red ink! Unemployment is high, people are losing their homes, and our children are getting left behind in education. This is no time to balance the federal budget. The states can’t borrow, so it’s up to the federal government to keep us from sliding into economic depression.

Americans lost $9 trillion in the Bush Republican meltdown of 2007-09. We need more than 3 years to crawl out of the hole. Every $100,000 pumped into the economy, either by government borrowing or private investment, creates or sustains one job for one year. For every $100,000 the government takes out of the economy, one job is lost for a year.

Jobs are needed to create the consumer demand that encourages private investors to put their capital in job-creating enterprise instead of derivatives and other speculative gambles, which create jobs only for financial brokers.

GodHatesTrash, Superstar

February 14th, 2012
6:47 am

You’d think after 9 years of the Bush tax cuts that the deficit would be going down, if you’re an idiot and believe in “conservative” idiotology…

GDRLA

February 14th, 2012
6:48 am

So, it was evidently OK to let the Bush/Cheney Circus Act use deficit spending for all of those trillions but now it is not? After all, I still recall the draft dodging thief Cheney stating that deficits no longer mattered. Why do they matter now? Is it because it is a Democrat who happens to be a non-white with a foreign born father who now sits in the White House? The whole mess is a continuing circus act – the Congressional leaders need to stop trying to keep Obama from being reelected & focus on the serious issues & challenges in this country – but since my pet pig is still not growing wings & flying I will not be looking for that to be forthcoming. Very easy to fix deficit – reduce spending (earmarks, etc) & RAISE TAXES!

GDRLA

February 14th, 2012
6:53 am

Continuing on the theme of my earlier post, the deficit came about under BOTH Democratic & Republican administrations & Congresses. Deficit financing/Keysian Economics requires 2 parts – Deficit spending when things/times are rough (as a Stimulus) BUT THEN WHEN THE CRISIS IS OVER – STOP THE DEFICIT SPENDING, ADJUST THE TAX BASE, & PAY DOWN THAT DAMN DEBT. That has NEVER happened – evidently won’t – after all, its not really money – Bridges to nowhere still need to be built, and the wealthy monied class needs to be allowed to continue to purchase their gold plated toilets & bathroom fixtures lest they be forced to live like the middle class.

Joel Edge

February 14th, 2012
7:17 am

Yeah, more of the same. November can’t come soon enough.

mr buckley

February 14th, 2012
7:31 am

some on seem to forget that the dems controled the congress from 06 till 10 but its all bushes fault

The Great and Powerful Community Organizer

February 14th, 2012
7:39 am

Spend! Spend! Spend! Trust me.

The Great and Powerful Community Organizer

February 14th, 2012
7:40 am

Well..I guess those “shovel ready” jobs weren’t so “shovel ready”..HAHAHAHAHAHA!!!!

Define delusional:

February 14th, 2012
7:44 am

“so it’s up to the federal government to keep us from sliding into economic depression.”

jconservative

February 14th, 2012
7:46 am

“It’s the spending. It will always be the spending with this president.”

And with his four predecessors also. And three of the four were re-elected!

And, as always, every cent the last 5 presidents spent was approved by Congress.

wut?

February 14th, 2012
7:47 am

Ayn Rant

February 14th, 2012
6:36 am

And where does the Fed Government receive the money to “create” jobs?

Disgusted on Both Sides

February 14th, 2012
7:50 am

Obama himself opposed the raising of the debt ceiling during the Bush years. But it is ok now because he is president? Debt is debt regardless of who is in charge. The government have no business in helping people to buy homes they could not afford. Credits goes to Chuck Dodd and Frank Barney (both Democrats) through their sponsorship of those bills in Congress. They should be hauled to prison. The Senate have not passed a budget in 3 years. The Democrats are in charge. The Republicans’ fault? Get a life. The budget can be passed with only a majority vote, not a super majority like they want you to think. Remember the ObamaCare debate? They passed that bill by a majority vote. The Democrats are politicizing everything to justify raising taxes for those who are already paying higher taxes. The Republicans are no better with the economy. They plundered when they were in charge. But since the Democrats are in charge, I’ll talk about them. Please spare me justifying Obama. He is as fake as a 3 dollar bill. He shamelessly used his mother’s health issues to promote the ObamaCare. Unfortunately, that was a lie. Take away his scripts and emptiness becomes too obvious. 57 states of the US? or Hawaii is in Asia? Obama said this when he spoke about health care reform at the Childrens National Medical Center in Washington in July 20th, 2009.

“The reforms we seek would bring greater competition, choice, savings and inefficiencies to our health care system,” The only truth I know he has said.

reebok

February 14th, 2012
7:50 am

“Deficits don’t matter.” Dick Cheney

Finn McCool

February 14th, 2012
7:58 am

We warned you conservatives way back in 2005 that it would take years to dig us out of the cesspool your boy W dug us into.

Chillax. We are only 3 years into the repairs.

Finn McCool

February 14th, 2012
8:01 am

Maybe that whole concept of “run two wars WHILE cutting taxes” wasn’t such a good idea?

Whoda thunk it? Outside of EVERY economist on the planet, whoda thunk it?

The Great and Powerful Community Organizer

February 14th, 2012
8:01 am

I don’t have a clue what I’m doing. SO, it’s Bush’s fault.

The Great and Powerful Community Organizer

February 14th, 2012
8:04 am

Maybe that whole concept of “$787 Billion Stimulus Package” wasn’t such a good idea?

Whoda thunk it?

Finn McCool

February 14th, 2012
8:04 am

Accounting for the roughly $200 billion in net deficits attributable to the 2009 “stimulus,”

W didn’t include the cost of the wars in his plan, does Big O get a pass on the stimulus? I think not! Big O can nut up but the Republicans showed the true small size of theirs.

Great American Girlie Men

Finn McCool

February 14th, 2012
8:06 am

No, it’s only partially Shrub’s fault. But at least we have woken from the W nightmare and are attempting to fix it now.

The Great and Powerful Community Organizer

February 14th, 2012
8:08 am

Well, ya know how much Michelle and I love spendin money…see what I’m sayin?

The Great and Powerful Community Organizer

February 14th, 2012
8:09 am

It’s Bush’s fault we spend money.

Road Scholar

February 14th, 2012
8:13 am

And what exactly has the Repubs done to create jobs?

Question:

February 14th, 2012
8:16 am

How does Government create jobs? From where does the money come?

Mad Max

February 14th, 2012
8:16 am

Ayn – Do you realize how much money americans are losing by the constant devaluing of the dollar? What happens when interest rates edge up on that debt that we continue to accumulate? You can bury your head in the sand and keep thinking it will go away like the european nations or you can demand that our leaders lead. And lead does not mean do it my way. It means tackling the problems, gaining consensus and implementing solutions. It does not mean whining that the other side won’t do it your way. I wish Obama was a leader, we need one but all he has shown himself to be is a very shallow egomaniac without the skills necessary to lead our nation. I wish him well in his next job helping Jimmy C build houses for the poor.

JKL2

February 14th, 2012
8:22 am

Finn- But at least we have woken from the W nightmare and are attempting to fix it now

The true definition of insanity. Doing the same thing and expecting a different result. But I’m sure it will work for you this time because obama is the smartest man on the planet.

curious

February 14th, 2012
8:23 am

Since 1968 (When our white democrat politicans in the south decided they were republicans), the republicans have had the Presidency 29 of 44 years.

With that leadership, how could we possibly be in the mess we’re in today?

For those that are unhappy, and there are many, just what is your plan to correct this?

Specifics (with a price tag), please.

jconservative

February 14th, 2012
8:25 am

From Politico:
“At the same time Republicans were railing at Obama for proposing a budget with a $1.3 trillion deficit, House GOP leaders proposed something many in their party thought impossible: adding $100 billion to the deficit by passing a 10-month extension of a Social Security payroll tax cut without paying for it.”

As I was saying earlier……………………………….

Question:

February 14th, 2012
8:26 am

curious

February 14th, 2012
8:23 am

And how many of those years did Democrats control Congress? The President “proposes” the Congress “disposes”—they are both guilty.

JKL2

February 14th, 2012
8:29 am

Help obama realize his dream.

“If I don’t have this done in three years, then there’s going to be a one-term proposition” -Barack Obama

Looks like it’s time to step down for the good of the country.

Finn McCool

February 14th, 2012
8:30 am

For you righties who can’t get a grip on reality:

Bill Moyers: Where the Right Went Wrong
http://www.truth-out.org/bill-moyers-where-right-went-wrong/1328974045

Aquagirl

February 14th, 2012
8:30 am

The true definition of insanity. Doing the same thing and expecting a different result.

The same thing? Let us know when Obama launches a couple of decade-long unilateral ground wars while cutting taxes.

it really doesn’t take a genius to understand this will bust your wallet, but then there’s no accounting for folks who voted for this. If you can’t grasp why building a bridge in Peoria is not the same as flushing money down the toilet called Afghanistan, you may be one of those people.

Finn McCool

February 14th, 2012
8:35 am

Do you realize how much money americans are losing by the constant devaluing of the dollar?

That might be the most idiotic thing I’ve read on Kyle’s blog.

When the value of the dollar goes down our exports go up. Increases in exports means increases in work for Americans, fewer jobs going overseas, etc.

wut?

February 14th, 2012
8:35 am

“Bill Moyers: Where the Right Went Wrong”

Now there’s an excellent source of “opinion”. Why not the Huffy Post?

curious

February 14th, 2012
8:35 am

Question

You’re right, so what are we doing about it? I don’t see much willingness to work together.

Finn McCool

February 14th, 2012
8:36 am

The true definition of insanity.
Using the same old tired cliche over and over and over again and expecting different results.

JKL2

February 14th, 2012
8:38 am

aquagirl- If you can’t grasp why building a bridge in Peoria is not the same as flushing money down the toilet called Afghanistan, you may be one of those people.

What makes this funny is I lived in Peoria for nine years. I think there were a couple democrats who voted for the “war on terror” and going into Afphanistan too.

When the value of the dollar goes down our exports go up.

February 14th, 2012
8:38 am

Hey! Let’s get that dollar down to ZERO! More work!

Finn McCool

February 14th, 2012
8:40 am

You conservatives need to stay focused on voter fraud. Let the adults continue to work on fixing the economy.

ohohoh voter fraud over there! and over there! Got get it! Good doggie.

JKL2

February 14th, 2012
8:40 am

finn- Using the same old tired cliche over and over and over again and expecting different results

Yes, obama is a great president…

It’s Bush’s fault…

Finn McCool

February 14th, 2012
8:41 am

can’t tell a cliche from reality? figures

voter fraud over there! Got get it! Good boy!

JKL2

February 14th, 2012
8:45 am

When the value- Hey! Let’s get that dollar down to ZERO! More work

Now you are going to dis the presidents immigration policies too? (make the dollar worth a peso, then they will stop coming here).

I would tell people to move to Mexico for the “good jobs” but their immigration laws won’t allow it.

td

February 14th, 2012
8:46 am

GDRLA

February 14th, 2012
6:53 am

” Deficit spending when things/times are rough (as a Stimulus) BUT THEN WHEN THE CRISIS IS OVER”

According to the Obama administration the crisis is over. Since that is the case then we need to follow the Republican plan and attack the deficit immediately. You should send your Democrat President this message.

JKL2

February 14th, 2012
8:46 am

finn- voter fraud over there! Got get it! Good boy!

Isn’t that Jimmy Carter’s job?

carlosgvv

February 14th, 2012
8:48 am

Are we going down the Greek road? If so, get ready for “welcome to hard times”.

ACORN

February 14th, 2012
8:49 am

Hey now! Voter fraud is OUR specialty!

Aquagirl

February 14th, 2012
8:49 am

What makes this funny is I lived in Peoria for nine years. I think there were a couple democrats who voted for the “war on terror” and going into Afphanistan(sic) too

Democrats who depended on information provided by the Mission-Accomplished Executive branch. Or did you think the Democrats ran the CIA during Bush’s reign?

The true definition of insanity: “discussing” things with people who respond with non-sequiturs and moving the goalposts instead of simply admitting they were wrong.

Ayn Rant

February 14th, 2012
8:50 am

wut? . . . The federal government gets money to create jobs from taxes collected and from borrowing private and foreign capital. The private and foreign capital that is invested in treasury issues at very low interest rates is not invested in American private enterprise because there is not enough consumer demand to offer a profitable return on investment.

There is a glut of capital and a shortage of jobs to create consumer demand that will make private investment profitable. One way to restore a balance between capital and consumer demand is to confiscate some of the excess capital by state taxes on wealth, and to slow the formation of excess capital by raising federal taxes on excess income.

Think about it! There is no possible way to spend money without creating and supporting jobs. Every cent spent by individuals, and the state and federal governments, goes toward creating and supporting jobs. Purchases at Walmart create jobs, many of them in Asia. Even foolish expenditures on useless things create jobs, but not all jobs create useful products.

real john

February 14th, 2012
8:56 am

If I hear one more liberal throw out the stupid talking point of “Bush started to unfunded wars.” Do you realize how dumb you sound. So I guess when Pearl Harbor was bombed, the U.S. should have said, “nope, we can’t go to this war either, because its not funded.” All wars the U.S. have fought in have resulted in spending.

BTW..the entire costs of both wars combined is about $2-$3 trillion which spread out over 10 years is $200 or $300 billion a year. Obama is deficit spending over $1.2 trillion a year!!

Most of you do realize that if Obama is reelected he will add easily twice and perhaps even three times the amount to the defecit as Bush. That’s by the White House own estimates.

This isn’t “right wing, Faux News talking points.” The Democratic Party is going to bankrupct this country plain and simple by refusing to even consider major changes to Social Security, Medicaid, and Medicare. You know the liberals like to claim themselves as “progressives” and love to talk about science, yet amazing they can’t do simply math. Our country is on a 100% path to financial ruin. The math does not lie or have political agendas. We must make MAJOR changes or we will be Greece. Yet, it will be much worse due to the size of our economy.

Finn McCool

February 14th, 2012
8:56 am

In the 1950’s the top marginal tax rate was 91%. There were no rich people in the 50’s? people didn’t do pretty well?

What else happened in the 50’s? Oh yeah, the middle class became the predominant class and America became the powerhouse it is so helplessly looking to regain today.