Monday, February 13, 2012

Tax & Spend Obama

A lot of Democrats I talk to are convinced that Obama is fiscally responsible, not your grandpa's tax-and-spend Democrat! After all, he wants to raise taxes, and Republicans won't let him, and how can you close a budget gap without raising taxes?

If you want to continue to fall into that category, you should avoid reading Obama's new budget proposal. The Washington Post has the goods:
The president’s outlook for debt reduction has deteriorated markedly since September, when Obama told Congress that his proposals would hold annual deficits well under $600 billion after next year and permit the debt held by outside investors to rise to $17.7 trillion by 2021, or 73 percent of the overall economy. The new 10-year blueprint shows annual deficits exceeding $600 billion every year except 2018. And the portion of the debt held by outside investors would grow to $18.7 trillion by 2021, or 76.5 percent of the economy — a full $1 trillion higher.
So the president is not keeping his promises. But what exactly is he proposing?
President Obama on Monday unveiled a $3.8 trillion spending plan... Obama also seeks taxes by nearly $2 trillion over the next decade, primarily for corporations, hedge fund managers and high-income households.
So he wants $2 trillion more in taxes and $3.8 trillion more in spending. That's not how I would go about shrinking the national debt, but hey, I don't know any fancy accounting tricks.

At best, one can read this as an intellectually unserious campaign gimmick, or a terrible first bid in a long-term negotiation with Republicans, so Obama can talk later about how imaginary spending he has "cut" once he agrees to some middle ground. So that's it: the best you can say is that the president is lying to us now (about how much he wants to spend) so that he can more effectively lie to us later (about how much spending he has cut).

2 comments:

Chops said...

The Washington Post's pro-government, anti-market bias is laughably transparent in the opening statement of the article:

President Obama on Monday unveiled a $3.8 trillion spending plan that seeks to pump billions of dollars into the economy while raising taxes on the rich to tame a soaring national debt now projected to grow significantly faster than previously forecast.

Additional taxes "tame" the national debt, which is passively forecast to grow "significantly faster". But $3.8 trillion in spending isn't connected in any way to the national debt, and the journalist lazily copies the administration's talking points on the purpose of the spending ("to pump billions into the economy"). That's a very favorable interpretation; an equally valid alternative could be "to redistribute wealth to key Democratic voting blocs". Both of those statements are editorial; neither of them belongs in a straight news article outside of quotation marks.

Carol L. Douglas said...

"It is a budget that spends a staggering $47 trillion over ten years and capitulates to the inevitability of a national debt larger than the national economy, assuring that by 2022 our interest payments alone will reach $1 trillion a year. It is a budget that hikes income, estate, and other taxes by $1.9 trillion over ten years, and uses that revenue not to reduce the deficit or shore up our existing entitlement commitments but on a raft of new stimuli that are as substantively dubious as they are politically opportunistic.

"It is a budget that claims $4 trillion in deficit reduction through a series of cheap tricks that don’t stand up to even the gentlest of scrutiny. Fully half of the savings come from the administration’s claiming as its own the $2 trillion in cuts won by congressional Republicans in the debt-limit deal. Some $850 billion comes from not spending war dollars that were never going to be spent anyway. Another $430 billion comes from jury-rigging the baseline to hide the cost of the infamous Medicare “doc fix.” And so on."

(from National Review)