Peter Suderman | August 24, 2009
Turns out the budget deficit is worse than anyone expected. A lot worse. It's set to balloon like someone fed it a buffet platter of ever-lasting gobstoppers. From the AP:
The Obama administration is expected to boost its estimate of the federal deficit over the next decade by $2 trillion, a move likely to trigger political wrangling over who's to blame and how harmful all the red ink will be.
The White House's Office of Management and Budget is expected to forecast $9 trillion in deficits over the next 10 years, up from a $7 trillion estimate earlier this year, according to White House officials who spoke last week on the condition of anonymity.
And it looks like the CBO is set to release a report that backs up the new figures. Needless to say, this won't make the health-care reform fight any easier for Obama when Congress heads back into session next month. Indeed, according to USA Today, it's already making an impact:
Lawmakers said Sunday that PresidentObama must scale back ambitious plans to overhaul health care because ballooning budget deficits are undermining support for more comprehensive and costly legislation.
As the White House prepares to release worse-than-expected deficit projections this week, even Democrats in Congress said that whatever health care bill emerges this fall will have to cost less than the $1 trillion price tag contemplated earlier this year.
"It's going to have to be significantly less than what we've heard talked about," Sen. Kent Conrad, D-N.D., one of six senators from both parties seeking a bipartisan health care bill, said on CBS' Face the Nation. "We've got to have the deficit reduced as a result of this effort. That is absolutely imperative."
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Not to get all metaphor-nazi, but would gobstoppers really inflate anything?
The baseline deficit El Busho left was $1.3 trillion per annum
(assume you correctly account for his "supplemental" war
liabilities).
Multiply that by 10 years and what is the surprise?
I'll answer my own question.
The surprise is the overly optimistic 4% GDP growth in this
projection.
Did I say "overly optimistic"?
Needless to say, this won't make the health-care reform
fight any easier
Au contraire, silly rabbit. Haven't you been listening? ObamaCare
will shrink the deficit! Through the use of faith, magic
and death squads, we'll be back in the black by November, 2012!
political wrangling over who's to blame
Duh.
Every single congresscritter who
* voted for the various bail outs
* voted for medicare part D
* voted for cash for clunkers
* voted for any other form of bribing people with their own
money
* thought it was OK to put on-going war expenses in special
appropriations
* hasn't resisted the federal reserve's gray go-like expansion
throughout the financial sector
* who pooh-poohed the insolvency of social security, medicare, or
the federal pension funds
and on and on and on into the misty depths of time.
And every president who did their part.
Just a thought.
Au contraire, silly rabbit. Haven't you been listening?
ObamaCare will shrink the deficit! Through the use of faith, magic
and death squads, we'll be back in the black by November,
2012!
So why do the old folk not believe you? The old geezers think Obama
is cutting the neck of their Golden Medicare Goose!
You fucking morons can't have it both ways!
Either Obama is a Scroogish cost cutter or a profligate free
spender!
Pick your lie and stay with it!
I don't see what the problem is. We can make as much money as we want. Everyone will be millionaires, then billionaires, and even maybe trillionaires. What are we waiting for? Let's get serious about making money!
It's set to balloon like someone fed it a buffet platter of
ever-lasting gobstoppers.
...or a
shark-gun pellet with compressed gas.
I blame the idiots who continue to invest in US Treasury
securities.
If you keep on lending them money, they'll keep on spending it.
Just out of curiosity, and maybe some knows or can point to a link, but what happened to all that surplus money the budget had back in the 1990s? Did it pay off debt, or just float around and get spent later, or what?
The baseline deficit El Busho left was $1.3 trillion per
annum (assume you correctly account for his "supplemental" war
liabilities).
Multiply that by 10 years and what is the surprise?
That seems a little light, Shrike. Are you accounting for the
unfunded Medicare liabilities? Probably not. So our deficits may
actually grow to $15-$20 billion. Add in what Obama told us he
wants to do- not even adding in what he's already done, and we may
reach 3rd world status before 2020.
- the deficit got bigger on Friday
- I find out FBI not doing background checking on czars, Whitehouse
is (WTF?)
- Monday a giant "Bush did it" red herring, we gonna investigate
him. What healthcare bill?
What an awesome weekend and start to the week. Fuck me. Fuck, fuck,
fuck, fuck. Just plain old FUCK.
Just out of curiosity, and maybe some knows or can point to
a link, but what happened to all that surplus money the budget had
back in the 1990s? Did it pay off debt, or just float around and
get spent later, or what?
The Clinton surplus was relatively miniscule.
Until the drunken sailor party came into power in 2001.
So why do the old folk not believe you? The old geezers
think Obama is cutting the neck of their Golden Medicare
Goose!
The old geezers are democrats. Remember the rule? If you slow the
growth, that's a cut.
So why do the old folk not believe you? The old geezers think Obama
is cutting the neck of their Golden Medicare Goose!
You fucking morons can't have it both ways!
Either Obama is a Scroogish cost cutter or a profligate free
spender!
Pick your lie and stay with it!
Here's the lie I'm going with: you are good at reading sarcasm.
Multiply that by 10 years and what is the surprise?
That this OMB budget doesn't include war spending past 2010 and
still gets to that number?
That this OMB budget, as Holtz-Eakin correctly points out, is
still including cap-and-trade auction revenues each year
even though the House bill isn't auctioning off the credits?
Either Obama is a Scroogish cost cutter or a profligate free spender!
Obama most certainly can be both. Obama can be a profligate free
spender and seek Scroogish cost cutting in a futile attempt to keep
his moronic policies from leading to super profligate free
spending.
Until the drunken sailor party came into power in
2001.
True dat. And then in 2008 we got the Ecstacy (or is it Extacy?)
rave party with Dad's credit card.
Who to blame? That's easy enough - all those asshole who've
voted for either of the two major parties over the last 20 years
(time-period is likely conservative).
Ok ok, that's too broad... not all those voters are ass-holes, some
of them were just stupid and/or ignorant.
It's hard to blame the politicians when we keep re-electing them,
rather than hanging them, for their hideous performance.
The baseline deficit El Busho left was $1.3 trillion per annum (assume you correctly account for his "supplemental" war liabilities).
Multiply that by 10 years and what is the surprise?
It's not a surprise that you're pretending like the FY 2009
deficit, which includes the Obama-supported TARP, is the baseline
for all future years. Or perhaps you don't know what "per
annum" means. It means "per year," not "per decade." A
baseline budget deficit of $1.1T per annum would mean the
CBO's Alternative Scenario baseline would have a much worse debt
than $9T.
It's not a surprise that you can't read the CBO data. Yes, Bush
pushed the war spending into supplementals, which is retarded. But
the money did eventually get counted in the budget numbers; if
you're looking at the data in the past you don't go back and add in
the war funding a second time. You only have to add it in to Bush's
OMB projections.
The CBO projections I linked to project Iraq spending in the
future, and include it fully, unlike the Bush OMB. They don't come
anywhere near to $1.3T a year. Even under the Alternative Scenario
baseline in Table 7, where the Bush tax cuts are fully extended,
the 2009 baseline deficit is $1.1T, 2010 is $703B, 2011 is $498B,
and then it's never worse than $272B after that.
Yes, the CBO projections got to the same $9T debt level for its
baseline assumption in January as the OMB is correcting to now.
That's mostly because the CBO was predicting worse economic
growth.
But Obama hasn't made it better; he's made it worse. His current
OMB budget projects lots of extra spending, and then "pays" for it
with cap-and-trade auctions and limiting the charitable deductions
of high earners. But Congress has already made it clear that
they're all up for the spending, but won't limit those deductions
or auction off the cap-and-trade revenues.
So even though the OMB budget now has the same projected debt
levels as the original CBO budget, the OMB budget calls for extra
spending that will likely happen, and extra offsetting revenue that
won't.
The budget still includes $640B of cap and trade auction revenues that aren't in the bill that the House passed. Whether the Senate passes a matching bill or no bill passes, either way those revenues aren't forthcoming. So look at this projection, and add $640B of debt to it.
Who's to blame? Really?
Us. Who else? Not any President, or congressman. We picked them, We
made it clear what we wanted as a group. We got it. We wanted stuff
we didn't have to pay for. We elected whoever promised it.
Suckers.
And of course shrike, if you're wondering why the actual FY 2010
and FY 2011 budget deficits are so much worse than the CBO
projection in January 2009, that's simply explained by the phrase
stimulus package.
I mean, it's great that the Obama Administration is using fewer
budget tricks, though the cap-and-trade revenue projection is
mostly a trick at this point, after the House bill-- unless Obama
actually threatens to veto it, which he didn't. They still used the
old "rosy scenario" trick.
But in any case, there's a limit to how much credit I can give for
using fewer tricks when they're still making the deficit worse and
increasing the rate of spending.
Well, it appears you did some real analysis, Thacker. I read it
all.
But sadly, happy hour has taken its toll on me for now. I am a
numbers freak - so you speak well in my language and I am not
ignoring your considerable post.
Later.
Obama used the old "rosy scenario" trick.
I mentioned that earlier.
I'm done. Good post.
Not to worry. A Nobel Prize winning economist just wrote in the
New York Times that the Obama deficits are bad, but nothing out of
the ordinary historically, if you compare them to the deficits
following that minor international dust-up in 1945, as a percentage
of GDP (including government spending in GDP) and assuming
historically normal GDP growth (assuming the current minor downturn
is about over.)
How Big is Nine Trillion?
Either Obama is a Scroogish cost cutter or a profligate free
spender!
That's easy -- he's the biggest big government spender in the
entire history of the human race.
Just out of curiosity, and maybe some knows or can point to
a link, but what happened to all that surplus money the budget had
back in the 1990s?
(snicker) You believed that?
From the USA today quote:
Lawmakers said Sunday that PresidentObama must scale back
ambitious plans to overhaul health care
Looks like Lonewacko got a new gig!
Does this mean I won't get a BIG SS increase this year? Who's going to pay my Medicare bills? How about the money for college for all my grandchildren? Obama's "death initiative" is beginning to sound better already. It's your money and I want it now !!
I fucking hate this God damn Communist Marxist mother fucking half-white weak-chin'ed anti-american saul alinsky cock sucking fraud of a fucking mother fucker.
Who's to blame? Really? ... Us. Who else? ... We made it
clear what we wanted as a group.
"Us"? Like "you and me" killed the Kennedys? Sorry, this is the
same reasoning that makes every American a target for al-Quaeda.
When I ask "my" congresscreature, whom I voted against, not to
support legislation, and he does -- why am *I* part of "us"?
Whew. Clear-group tantrum over. We are all in it together, we are
all in it together, ...
"As the White House prepares to release worse-than-expected
deficit projections this week, even Democrats in Congress said that
whatever health care bill emerges this fall will have to cost less
than the $1 trillion price tag contemplated earlier this
year."
But, but, but Obama says health care spending is a CRISIS. His plan
will bend the cost curve - by spendng an extra $1 trillion (and in
reality, probably far more than tnat) over just the first 10
years.
Apparantly you have to spend huge extra gobs of money to "save"
money - or something like that.
And it looks like the CBO is set to release a report that
backs up the new figures. Needless to say, this won't make the
health-care reform fight any easier for Obama when Congress heads
back into session next month. Indeed, according to USA Today, it's
already making an impact
Of course, it won't make the right's never-ending call for tax cuts
any easier, either.
Until the last year or so, with its war-like boom in spending,
total government spending as a fraction of GDP has been flat or
slightly declined over the last 30 years. Therefore, it is damned
near impossible to blame the ever-growing deficits on
spending.
On the other hand, government receipts as a fraction of the GDP
keep trending downward...
Tax cuts have bankrupted us. Thanks guys.
What . . . the . . . fuck? Did Thacker just kick Shrike's
ass?
John Thacker,
Well done, sir. My compliments.
Tax cuts have bankrupted us. Thanks guys.
Maybe try living within your means next time?
In other words, fuck you, jack-off.
Tax cuts have bankrupted us.
How do you figure? This year's tax revenue would fully cover the
budget of a few years ago (I forget, I think its 2004).
So its not a shortage of taxes. It must be something else. What
could it be?
How do you figure? This year's tax revenue would fully cover
the budget of a few years ago (I forget, I think its 2004).
So its not a shortage of taxes. It must be something else. What
could it be?
Possibly because spending increased by $1 trillion dollars from FY
2000 to FY 2007. If spending had been held to FY 2000, we'd would
have had a surplus of $800 billion in 2007.
CBO
Air America attacks Obama for "cheney-like fascist deal with drug companies"
"Tax cuts have bankrupted us."
This is where I get REALLY freaking steamed and pissed.
Let me be very, VERY clear about this Brainy Smurf....(And Tony.
And the Feds).
It.
Is.
NOT.
YOUR.
MONEY!
Like any responsible business, budget accordingly. Use credit
WISELY (if absolutely necessary, like defending the nation).
Goverment has proven over and over they cannot manage money; you
collectivists had your shot and you blew it big time (no pun
intended Tony). When markets work and people invest capital and
sweat equity as THEY see fit, economies expand unfettered and tax
receipts increase.
Look at any of the collectivist states: CA, NY, MA... yeah, how's
them high taxes and spending like a drunken whore who stole her
john's credit card working out?
Hey, anyone remember that old anti-drug commercial with the guy that did cocaine? He's pacing circles in a room say, "I do coke... so I can work more... so I can earn more... so I can do more coke... so I can work more... so I can earn more... so I can do more coke..." and on and one. That's our government with the budget. They spend more... so they can stimulate more... so we can pay more taxes... so they can spend more. Except even that analogy fails at step two.
Oh and MI, according to the collectivist playbook, THAT place should be motherfucking panacea, and not the desolate blight it is.
Good call Joe, I do remember that PSA. Are you suggesting the governement wants to keep us in photo-statist...errr static vials?
Don't worry everyone...it looks
like Big Ben is getting a second term:
OAK BLUFFS, Mass. - Federal Reserve Chairman Ben Bernanke, widely credited with taking aggressive action to avert an economic catastrophe after the financial meltdown last fall, will be nominated by President Barack Obama for a second term, The Associated Press learned Monday night.
Bernanke masterminded what is now seen as a successful strategy to lift the economy out of recession, unlock credit and stabilize financial markets in part by using unconventional and unprecedented lending programs.
Many on Wall Street and in academic circles believed that he would therefore be the best choice to lead the country into a sustainable recovery and would be in the best position to figure out when and how to reel in the trillions of dollars pumped into the economy to battle the crisis.
"He has made only one big mistake: buckling under to pressure from all those yelling at him for enabling moral hazard and not finding a way to takeover Lehman Brothers, and he is not going to make the same mistake again," said DeLong, a professor at the University of California at Berkeley.
Until the last year or so, with its war-like boom in
spending, total government spending as a fraction of GDP has been
flat or slightly declined over the last 30 years. Therefore, it is
damned near impossible to blame the ever-growing deficits on
spending.
Nonsense. You can overspend every year by the same fraction, that
is, you can run the same percentage deficit every year, and you
will of course grow the debt because you are adding to it every
year. And the deficit will also grow every year because the overall
economy is growing: a constant fraction of an increasing amount is
also increasing. And your interest payments will increase as a
fraction of spending to boot.
The bottom line (and in this case, it really is a bottom line in
the accounting sense) is that we are (the government is) broke. We
cannot tax our way out of our problem, there is not enough GDP.
Take more in taxes, and productivity falls. Take less, and we
cannot make our current operating expenses. The only other option
is to print our way out with a flood of new dollars, which is what
is happening. This will work, for a while - until our creditors
dump their bonds. That's the end game, and if we are lucky, also
the new beginning.
Human wants are unbounded, but means to satisfy them are finite.
That's why it's called the "dismal science".
Is there a way to start a country in Antarctica?
If you don't mind the cold and the buried pyramids filled with xenomorphs, I'll be rooting for you.
I don't think many people would try stopping you.
I also don't think many will be going with you.
It's hard to blame the politicians when we keep re-electing
them, rather than hanging them, for their hideous
performance.
You can hang them as fast as they show up on the steps of congress.
The ones who follow them will be exactly the same kinds of
creatures.
It's the democracy, not the voters. We get the kinds of politicians
that our political system rewards.
But if it makes you feel better, blame the voters some more.
It's the democracy, not the voters. We get the kinds of
politicians that our political system rewards.
Machiavellian.
The Angry Optimist | August 24, 2009, 10:56pm | #
Tax cuts have bankrupted us. Thanks guys.
Maybe try living within your means next time?
In other words, fuck you, jack-off.
If we hadn't been diverting our "means" from government coffers
into granite counter-tops and SUVs, we wouldn't be in this
pickle.
Malto Dextrin | August 25, 2009, 1:52am | #
We cannot tax our way out of our problem, there is not enough GDP.
Take more in taxes, and productivity falls
Really? When I look at the data, I sure don't see much of a
relationship between productivity and overall tax rates.
And you do realize that a big part of our "productivity" this
decade was Wall Street Masters of the Universe playing with really
big numbers of borrowed dollars. Whoops....
"Take less, and we cannot make our current operating
expenses."
Then what is required is lowering operating expenses. "Evil"
businesses do this in the form of downsizing workforce, selling of
assests and elimination of unprofitable products/services. Easy to
say, very difficult in practice to execute as none of these options
are neither easy nor painless.
Very few (if any) pols would be willing to do so, as it would be
political 'seppiku', anathema to any pol as the 'a priori' of any
pol is to get re-elected.
Which might not be a bad thing, as public office was never intended
to be a lifetime endeavor.
If we hadn't been diverting our "means" from government coffers into granite counter-tops and SUVs, we wouldn't be in this pickle.
That's awfully abstract.
"If we hadn't been diverting our "means" from government coffers
into granite counter-tops and SUVs, we wouldn't be in this
pickle."
"Our" means?
You've got pronoun trouble, pal.
Nooge,
Machiavellian.
Where the measure of success is that you have kept your position,
whatever that may take.
The public interest is entirely secondary. Unless you're Ayn Rand
in which case it conveniently doesn't even exist.
Joe M,
There is not one single year (since the early 50s) that the US has
had a surplus. The 90s "surpluses" were projected. The last Clinton
budget year was damn close, with rounding we could call it break
even, but it actually had a very tiny deficit.
The Clinton surplus was relatively miniscule.
So "miniscule" that it never existed.
Really? When I look at the data, I sure don't see much of a
relationship between productivity and overall tax rates.
I, and most of the humans I know who work for a living, work to
earn a living. As our take home pay goes down, we get less
enthusiastic about putting out. The same goes for any investments
we make: We do it to make money.
I'm really not interested in paying your mortgage or your medical
bills or even putting your kids through college. That's your
responsibility.
Maybe the "data" you "look at" are about some other insectoid
species of meat robot that only lives to serve the hive.
"It's the democracy, not the voters. We get the kinds of
politicians that our political system rewards."
Sounds terribly deterministic.
I think that the level of politicians' evil in our system is
directly related to the relative strengths of various ideologies of
the people, and that's not a 'given' for our political system.
You can hang them as fast as they show up on the steps of
congress. The ones who follow them will be exactly the same kinds
of creatures.
I'm not saying we'll get representatives of higher moral quality,
but at least the new ones would be more fearful of irritating their
constituents.
It's the democracy, not the voters. We get the kinds of
politicians that our political system rewards.
For 150 years we had a federal government constrained by Article I
Section 8. The "feral" government is a modern phenomenon, not an
inherent feature of democratic republicanism.
"If we hadn't been diverting our "means" from government coffers
into granite counter-tops and SUVs, we wouldn't be in this
pickle."
And there's no such thing as taxes paid on granite countertops and
SUVs, in your world... right?
"Take less, and we cannot make our current operating
expenses."
Cut operating expenses, then.
You put "the right people" in charge and still get cost
underestimates and unrealistic revenue projections? How can that
be?
It's as if there is some systemic problem in government accounting
that makes it impossible to make honest projections nho matter
who's in charge.
I think his approval ratings have gone down because he promised us change, and all we got is change...(coins-leftovers). Terrible!!! Now, that's all we are left with..some pocket change.
Take more in taxes, and productivity falls. Take less, and we cannot make our current operating expenses.
We are not now at the optimal tax rate for productivity, we're at
an arbitrary rate, one heavily influenced by tax-cutting zealots
and their wealthy puppeteers. We can't make our current expenses,
and I don't see how you can bitch about that while simultaneously
being an anti-tax zealot. If they can go down, why can't they go
up, depending on the circumstances (let's say a war)?
Wow Tony - so in your world, if the government can't pay their
current expenses, raising taxes is the only option...
Interesting...
Keep taxes AND spending low.
This isn't rocket surgery, Tony.
Oh, and Tony... nobody makes a puppet out of me. I heard that
shit when I attended ONE goddamn tea party - no one put a gun to my
head forcing me to go, nobody gave me a check to go, nothing of any
fucking stripe in that arena.
I'm not alone, either.
Meanwhile, union people are trucked in to townhalls, and I'd bet a
weeks' pay they're by God getting paid. Dare you disagree with a
straight face?
I had to take a few hours off work to attend one recent event.
That's money neither I nor Uncle Spendy will get. My boss doesn't
pay me when I'm not on the job. The only reason he worked it out
was so ONE of us could attend, and he's the only other
employee.
So, us poor workin' fucks DO attend things, and we don't set
crosses ablaze or shout *gasp!* derision at our elected
thugs.
Double-dog dare me, asshat. Call me a liar. I've got nothing to
lose. Besides, I'm not in office, so I don't lie for a living.
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