Remembering 2012 as The Last Year of (Relative) Fiscal Discipline

Nick Gillespie | September 30, 2009

Over at The American, Reason columnist Veronique de Rugy, an economist at George Mason University's Mercatus Center, looks at the latest official deficit projections and sees nothing but blue skies red ink.

De Rugy adds,

Obama's deficits are frightening but they promise to get worse. Each month that goes by the president adds spending to the deficit. The August 2009 projections for instance, do not include any of the president's healthcare reform spending and they assume that the "temporary" stimulus spending will not be prolonged past fiscal 2011. Finally, they also assume that the economy will recover soon and that it will grow enough to generate increasing tax revenue, in spite of the president's plan to impose new taxes and regulations on the private sector. In other words, the deficit will likely continue to deteriorate beyond the current projections.

Full breakdown here.

Comments

|9.30.09 @ 1:17PM|#

That chart is end of this country as we know it.

Is there even enough money in the world that could be borrowed to cover it?

If you look at Obama's network, they're all adherents to the Cloward Piven Strategy of getting as many people dependent upon the Government for everything... knowing that the Govt will collapse from the burden of it all.

Almost every Obama policy can be explained rationally from that framework.

Jeneane Garofalo|9.30.09 @ 1:19PM|#

This is racism straight up.

Joe M|9.30.09 @ 1:20PM|#

Damn it, Nick, why do you hate old people and children so much?

ev|9.30.09 @ 1:27PM|#

That graph is so convenient from a researcher's prospective. I love how the government just picks a large number when they project fiduciary matters. And then they pick another one when they need too. It's really quite cute, like a little girl mixing up her consonants.

AK|9.30.09 @ 1:27PM|#

Yeah, OF COURSE the bars for January 2009, when Obama took office, are BLACK.

Racists all!

JB|9.30.09 @ 1:33PM|#

Obama: much worse than Bush.

Thanks all you fuckers that voted for him!

|9.30.09 @ 1:33PM|#

Looking at these spending projections and knowing where the government thinks it will get the money (through the Fed's printing press), I am reminded of that libertarian paradise called Argentina, in the 80s and 90s.

I am also reminded of a famous Mexican president, that said with tears in his eyes, during a speech in our Congress, that he would defend the peso "like a dog". That turned out well - I do not know if Obama will go that far... Frankly, I don't think he cares.

|9.30.09 @ 1:35PM|#

Negative deficit = surplus. So, -1 points for Nick Gillespie and the OMB.

|9.30.09 @ 1:38PM|#

What's to worry? The deficit is only about 10-15% of the GDP.

Joe M|9.30.09 @ 1:39PM|#

Nope, TA, if you'd bothered to read it, it said, deficits during the BUSH years! Aha! That surplus was from Clinton's last year, and is therefore not being acknowledged.

|9.30.09 @ 1:39PM|#

Ich soll mein Deutsch üben. Auszuwandern ist nicht schwierig, nach Deutschland, ja?

Oakland Resident|9.30.09 @ 1:44PM|#

Wait - is this the meaning of the huge black billboard I saw while commuting into SF today that said "2012: They Warned Us." Or is it some kind of teaser for a new movie or consumer product?

Paul|9.30.09 @ 1:46PM|#

Is there even enough money in the world that could be borrowed to cover it?

According to Paul Krugman: Yes.

|9.30.09 @ 1:54PM|#

I agree with Vince that this looks like the beginning of the end. Given enough rope, they have hung themselves, saving JB a lot of work.

|9.30.09 @ 1:56PM|#

@Joe M

According to the chart only the first bar you are referring to is a deficit of ~175 billion. All other bars are negative (as indicated by the minus sign "-"), and are therefore surpluses.

You implicitly assume that the captions are wrong. If you do that, you might as well assume that all values are also missing a factor sqrt(2*pi).

|9.30.09 @ 1:57PM|#

Wait - is this the meaning of the huge black billboard I saw while commuting into SF today that said "2012: They Warned Us." Or is it some kind of teaser for a new movie or consumer product?

There is a movie coming out about 2012. Looks like an apocalypto-disaster flick. The 2012 comes from sub-literate readings of the Mayan calendar, which supposedly posits the end of the world in 2012, popular amongst the New Agey types.

Of course, all it really does is schedule a new epoch beginning then.

jtuf|9.30.09 @ 1:57PM|#

I'm doing what I can to stop the trend, but I'm also making plans to emmigrate.

|9.30.09 @ 2:02PM|#

So, the current best-case scenario (best-case because its based on insanely optimistic optimistic official projections) is nearly $8,000,000,000,000 in deficits through 2017?

With a structural deficit of @ $700,000,000 beginning in 2015?

To be adjusted upward once we get a healthcare bill that will probably add at least a couple of trillion through 2017, and at least $500,000,000 to the structural deficit?

Costa Rica, here I come.

|9.30.09 @ 2:06PM|#

I'm standing on my head and it looks like blue skies to me.

|9.30.09 @ 2:16PM|#

@R C Dean
With a structural deficit of @ $700,000,000 beginning in 2015?

The chart says the deficit is minus $700,000,000. This is a surplus of plus $700,000,000. Nothing to worry about!

¢|9.30.09 @ 2:19PM|#

This is racism straight up.

And straight down!

Downward-pointing bars on budget graphs = right-wing dogwhistles for Presidential lynching.

YOU ALL SEE IT!

robc|9.30.09 @ 2:22PM|#

What's with the bogus surplus that never actually existed in 2000 on the graph?

robc|9.30.09 @ 2:24PM|#

That surplus was from Clinton's last year, and is therefore not being acknowledged.

Considering we actually had a (very, very, tiny) deficit his last year, that is a good thing. Now they need to fix the fucking graph.

|9.30.09 @ 2:24PM|#

Wait - is this the meaning of the huge black billboard I saw while commuting into SF today that said "2012: They Warned Us."

I believe that is a Roland Emmerich film. Emmerich is the directorial genius who brought us The Day After Tomorrow, 10,000 BC, and the updated Godzilla from about 10 years ago. He's Michael Bay with a German accent and a hard-on for disasters--and you know what that means.

robc|9.30.09 @ 2:27PM|#

On 9/30/99, the debt was $5.656T
On 9/30/00, the debt was $5.674T

Fiscal year 2000 ran a deficit of $18B, which is damn good, but isnt postive.

Sourch: Dept of the fucking Treasury

|9.30.09 @ 2:28PM|#

and you know what that means

We're going to have to rip his lungs out and eat them?

|9.30.09 @ 2:33PM|#

We're going to have to rip his lungs out and eat them?

Cage match between him and Bay. Two men enter, and then I shoot both of them after they fight close to death. No man leaves.

|9.30.09 @ 2:34PM|#

Is there even enough money in the world that could be borrowed to cover it?

According to Paul Krugman: Yes.

But only when a Democrat is President.

I will point out that those are nominal dollars. But it still looks bad as a percentage of GDP, worse every year until 2019 than all but one of the Bush years.

Also, those numbers are the CBO "baseline" numbers don't include several Obama promises, like extending the Bush tax rate cuts for the middle class, the AMT patch, and several other things that are in expiring laws (due to the Byrd Rule) but will probably be extended.

|9.30.09 @ 2:36PM|#

Obama's either going to have to explain why letting middle class tax rates going up doesn't count "seeing your taxes go up... not one dime," or that deficit's going to look much worse.

Silentz|9.30.09 @ 3:05PM|#

Jeez...Bush REALLY screwed this economy up didn't he...

We're still blaming him for this, right?

|9.30.09 @ 3:08PM|#

What's with the bogus surplus that never actually existed in 2000 on the graph?

robc, during the two Clinton "surpluses" revenues actually did exceed outlays, which to some meets the definition of a surplus.

However much of the revenues was from FICa taxes, which after paying for current SS and Medicare beneffits were "loaned" to the treasury thus increasing the debt.

If you look at the debt breakdown for those years you will see that increase in debt held by the government was greater that that head privately.

Interesting paradox, what?

Jeez...Bush REALLY screwed this economy up didn't he...

We're still blaming him for this, right?

I see no reason to let him of the hook. Just because BO is worse doesn't make Bush good.

|9.30.09 @ 3:13PM|#

robc

On 9/30/99, the debt was $5.656T
On 9/30/00, the debt was $5.674T

Fiscal year 2000 ran a deficit of $18B, which is damn good, but isnt postive.

Sourch: Dept of the fucking Treasury

If you look at the breakdown of the debt you will see that debt held by the government increased more debt held by the private sector decreased.

IOW, the all the govt boroowing those years was from itself; the "Social Security Surplus".

But revenues still included outlays.

|9.30.09 @ 3:13PM|#

Fiscal year 2000 ran a deficit of $18B, which is damn good, but isnt postive.

Have to state whether you're using the Social Security on-budget or off-budget numbers. It changes things.

|9.30.09 @ 3:15PM|#

Correction (excluding spelling errors elsewhere):

If you look at the breakdown of the debt you will see that debt held by the government increased more than debt held by the private sector decreased.

robc|9.30.09 @ 4:43PM|#

Isaac,

Im aware of the details, but intergovernmental debt is still part of the federal debt.

robc|9.30.09 @ 4:44PM|#

John Thacker - Im using DoT numbers. Which includes private debt and intergovernmental debt.

robc|9.30.09 @ 4:49PM|#

If we used GAAP, we never even came close to a surplus, and that would be the most accurate methodology to use.

Joe M|9.30.09 @ 4:51PM|#

According to the chart only the first bar you are referring to is a deficit of ~175 billion. All other bars are negative (as indicated by the minus sign "-"), and are therefore surpluses.

You implicitly assume that the captions are wrong. If you do that, you might as well assume that all values are also missing a factor sqrt(2*pi).

Math is racist.

|9.30.09 @ 5:37PM|#

If we used GAAP, we never even came close to a surplus, and that would be the most accurate methodology to use.

Too true. Although then the claims that slowing the rate of Social Security is a "cut" would have more validity.

|9.30.09 @ 9:52PM|#

Holy fuck.... my eyelids fell down over my eyes, and all over a sudden, everything turned black, and I felt lazy.

My eyes are racist