Obama’s Budget: Fiscal Armageddon
A Commentary by Howard Rich
“We’re not going to save our way out of this recession. We’ve got to spend our way out of this recession.” – U.S. Majority Whip Jim Clyburn
Just days before Congressman Jim Clyburn had the “audacity” to admit what D.C. politicians were actually doing with our tax dollars, U.S. President Barack Obama had the cowardice to continue concealing government’s unprecedented generational larceny.
“It is critical that we rein in the budget deficits that we’ve been accumulating for far too long,” Obama said in unveiling his latest effort to distract American citizens from a looming fiscal Armageddon.
Of course, after proposing a so-called “budget freeze” in his State of the Union speech, Obama rolled out the “Mother of all Boondoggles” (for now, at least), a $3.8 trillion spending plan for the coming fiscal year that includes a record $1.6 trillion deficit (on top of the $1.4 trillion deficit government will run in the current fiscal year). By the end of this month, the Treasury now projects that the U.S. will hit its $12.4 trillion debt ceiling, coming on the heels of a vote last week in the Senate to raise the debt ceiling from $12.4 trillion to $14.294 trillion. And just this week, Moody’s warned that the nation’s Triple-A rating could be in jeopardy “if the current upward trend in government debt were to continue and become irreversible.”
“It would be a terrible mistake to borrow against our children’s future to pay our way today,” Obama said – but then he did just that, endorsing a spending plan that grows government by hundreds of billions of dollars when the nation can least afford it, and when the country’s first major entitlement bubble is about to burst.
According to a new CBO report, Social Security outlays will exceed revenues for the first time in 25 years in 2010 – and a wave of red ink is rapidly building up behind this immediate tipping point as the program will run permanent deficits beginning in 2016. Meanwhile a similar Medicaid implosion is on the horizon, and on top of these brewing disasters we have the hundreds of billions of dollars America must devote to interest payments on its mushrooming debt.
Yet amazingly, with the same sleight of hand that his so-called stimulus “created or saved” imaginary jobs (in non-existent Congressional districts), Obama now claims that federal deficits will begin to magically decline by 2012 – although even his rosiest numbers don’t envision annual deficits falling below $1 trillion until after 2020.
Where will our national debt be at that point? $24 trillion?
That’s classic Washington calculus though, isn’t it? Nothing ever gets cut from government, as we just have politicians who promise to borrow less of your money at some point in the increasingly distant future. But that point in the future never actually arrives, because there is invariably some emergency or perceived social obligation which crops up to justify yet another massive expansion of government.
In addition to excluding such politically-correct contingencies from his spending plans, Obama also erroneously claims that future deficits could be reduced if only the U.S. Congress were to pass his socialized medicine proposal – with its estimated $2.5 trillion price tag.
Only according to Obama’s asinine arithmetic do spending explosions and entitlement expansions equate to future savings.
This fiscal lunacy is clearly not what the American people want. Yet even though they held up unmistakable “STOP” signs in elections in Virginia, New Jersey and Massachusetts, Obama and his Congressional allies are ignoring the message and pushing the pedal to the floor as they drive this nation off of a fiscal cliff.
Obama’s rampant spending isn’t even the gravest danger, either, as his budget threatens to exacerbate the damage by putting future economic growth in a stranglehold.
While Obama claims to have placed “jobs” at the top of his priority list, his budget raises taxes on capital gains and hikes upper income tax brackets as part of an effort to pump more than $460 billion into government’s coffers – mirroring the faulty “payment plan” behind his socialized medicine proposal.
And while soaking the rich makes for great populist rhetoric, it doesn’t create jobs – in fact, it ensures that job creators keep what little money Washington leaves them with buried in their back yards, not making payroll.
With his presidency on the ropes, Barack Obama is portraying himself to the masses as a deficit hawk focused on improving our economy.
Nothing could be further from the truth.
His unprecedented spending binge would stab at the very heart of job creation in this country, while plunging this nation deeper into a deficit spiral from which it might never ever be able to escape.
Howard Rich, Chairman of Americans for Limited Government, is a Liberty Features Syndicated writer.
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Views expressed in this column are those of the author, not those of Rasmussen Reports.
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