Economics

Obama Immediately Cuts Deficit By $300 Billion; Why So Serious?

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President Barack Obama is convening his "fiscal summit" today to figure out how to bring the feds' spending to heel. The work, he says,

"…begins on Monday, when I will convene a fiscal summit of independent experts and unions, advocacy groups and members of Congress to discuss how we can cut the trillion-dollar deficit that we've inherited."

Which means that Obama has already shaved $300 billion off the deficit, which his own White House just put at $1.3 trillion. Even at numbers that inconceivable, $300 billion isn't a rounding error.

And, in the best tradition of B.S. D.C. accounting methods, the $1.3 trillion figure doesn't include the nearly $800 billion in stimulus spending or the $275 billion to forestall mortgage defaults or war costs for FY2009 or whatever TARP 2 costs, so the actual deficit figure (assuming revenue projections are good, which they likely aren't) is somewhere in the neighborhood of $2.5 billion at a bare minimum. At $1.3 trillion, the deficit would be 9.2 percent of GDP, a figure not seen since World War II. Under Ronald Reagan, whose deficits scared the bejeezus out of most people, the biggest deficit amounted to 6.4 percent of GDP. Go here for a chart. It may well be that government deficits don't have as big an impact on the economy (for good or ill) as is commonly assumed. Still, it sure would be comforting if the people in charge of the federal government would show they can do basic math.

But hey, the important thing is that we're finally talking about fiscal repsonsibility now that the stimulus package is law.

Update: Due to my error, this post originally put the White House deficit estimate in billions, not trillions. Due to a server error, a double post and about a dozen comments, including one that called attention to my error(s), were deleted.

NEXT: Detroit as the Prodigal Son

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  1. double post is double.

  2. At $1.3 billion, the deficit would be 9.2 percent of GDP

    Yeah. Thanks for fixing that. What do you pay your editor?

  3. Billion. Trillion. What does it matter anymore.

    In a year they’ll be converting thousand dollar bills to one dollar bills to handle the hyper-inflation.

    Get out your wheelbarrows, boys. You’ll need ’em to purchase your Victory Gin.

  4. Due to a server error, a double poste and about a dozen comments, including one that called attention to my error, were deleted.

    A fortuitous server error indeed!

  5. It’s 1984, man!!!!!

  6. What happened to my Reason editor joke?
    Well I fixed it.

    A Reason editor Nick Gillespie hears on the radio that at airplane crash in the Amazon resulted in the death of one Brazilian.Editor Gillespie says “That’s terrible! how many is a Brazilian anyways?”

  7. double “poste”? (arrogant snickering)

  8. Don’t worry. Hillary has us covered. She is over in China right now telling them to go forth and oppress anyone they want. We won’t get in the way. All they have to do is keep buying our bonds.

  9. Step 1 — Spend a gazillion dollars.
    Step 2 — Fix the deficit.

    Hang on to your wallets! Taxes are going UP. But only on the undeserving wealthy and big business of course. It will not affect anyone else.

  10. Fear not; Obama Claus is on the job.

    I want to belieeeeeeve!

  11. Man, straight up fuck Barack Obama and the entire rest of the Federal Gubmint. For real.

  12. Update: Due to my error, this post originally put the White House deficit estimate in billions, not trillions. Due to a server error, a double poste and about a dozen comments, including one that called attention to my error, were deleted.

    So we’re leaving the errors in place as part of the historical record? Cool

  13. Well at least you know people are reading your posts carefully…but really, when you are talking multiple billions of dollars, does billion vs trillion really matter anymore…and where do I send my wallet?

    A fiscal responsibility summit in DC is like having a summit on the evil of nudity at the playboy mandsion…

  14. “summit of independent experts and unions, advocacy groups and members of Congress”

    This sounds like a collection of the worst people in the country, like some kind of Council of Doom.

  15. Brazen is the only world I can use to describe a guy who pushed for a trillion dollars in spending then says we have to fix the deficit. I gotta go with Xeones on this one.

  16. With apologies to Lex Luthor, Scarecrow and Solomon Grundy, who probably could keep better track of the nation’s finances than ACORN, SEIU, and Barney Frank.

  17. This sounds like a collection of the worst people in the country

    I know, right? We have to nuke the site of the meeting from orbit. It’s the only way to be sure.

  18. Not to be annoying but…
    ” is somewhere in the neighborhood of $2.5 billion at a bare minimum. ”
    Is that the original error or a second?

  19. I presume this is a joke posting, right? I mean, no-one would get bent out of shape over someone just speaking in round numbers for effect. Right? Right?

  20. “summit of independent experts and unions, advocacy groups and members of Congress”

    The finest minds in Wealth Redistribution Theory…

    Say- that would be a great major for somebody just entering college, wouldn’t it?

  21. Blue | February 23, 2009, 8:59am | #

    Billion. Trillion. What does it matter anymore.

    In a year they’ll be converting thousand dollar bills to one dollar bills to handle the hyper-inflation.

    Get out your wheelbarrows, boys. You’ll need ’em to purchase your Victory Gin.

    I would like to propose this sort of thing as a new rule for the Drinking game. References to weimar/zimbabwean inflation…. Drink?!

  22. I presume this is a joke posting, right? I mean, no-one would get bent out of shape over someone just speaking in round numbers for effect. Right? Right?

    After all, 300 billion dollars is just a little bit of rounding.

  23. There are two and only two ways to fix this deficit (leaving aside the political fantasy of cutting the new baseline for federal spending):

    (1) Much higher taxes.
    (2) Monetizing the debt/inflation.

    We are so, so fucked.

    Looked at a nice 80 acre property with about 400 yards of frontage on the Colorado River yesterday. Can’t really afford it easily, but I’m seriously thinking that I can’t not afford, either.

  24. “And, in the best tradition of B.S. D.C. accounting methods, the $1.3 trillion figure doesn’t include the nearly $800 billion in stimulus spending or the $275 billion to forestall mortgage defaults or war costs for FY2009 or whatever TARP 2 costs, so the actual deficit figure (assuming revenue projections are good, which they likely aren’t) is somewhere in the neighborhood of $2.5 billion at a bare minimum.”

    There is a lot bigger example of the BS nature of D.C. accounting methods and it has been going on for a long long time. Since the government does not keep it’s books on an accrual accounting basis (something it requires every publicly traded corporation to do), it does not count as debt the unfunded liabilties for Social Security and Medicare.

    Those amounts dwarf even the new totals for the “official” debt by a huge amount.

  25. I mean, no-one would get bent out of shape over someone just speaking in round numbers for effect.

    Considering the correct round number is either 2 or 3 trillion, depending on how you want to count the new Treasury authorities, I would say that there is ample room to bitch.

  26. “And, in the best tradition of B.S. D.C. accounting methods, the $1.3 trillion figure doesn’t include the nearly $800 billion in stimulus spending or the $275 billion to forestall mortgage defaults or war costs for FY2009 or whatever TARP 2 costs, so the actual deficit figure (assuming revenue projections are good, which they likely aren’t) is somewhere in the neighborhood of $2.5 billion at a bare minimum.”

    Don’t you know that the govt is going to make money on TARP? Just a little bit of loan restructuring and it will all come out just fine.

    …it does not count as debt the unfunded liabilties for Social Security and Medicare.

    Social Security and Medicare are just a savings plan and an insurance plan we all pay in to. There isn’t any BS here. As long as we bring in lots of hardworking young immigrants, it will all work out fine.

  27. Methinks you must be angling for the White House Press Secretary job.

    LOL

  28. the trillion-dollar deficit that we’ve inherited.

    What? Didn’t he just create most of that with his stimulus bill?

  29. how we can cut

    Remember that promise to not raise taxes on anyone making less than $250K? You can put that next to the promise to end coercive inerrogation, renditions, and holding terrorists without trial.

    I’d toss in his promise to have 2-day public review of all bills before signing, but no one ever believed that one anyway.

  30. I presume this is a joke posting, right? I mean, no-one would get bent out of shape over someone just speaking in round numbers for effect. Right? Right?

    Um, when you round numbers, you don’t normally decrease them by 23%.

  31. is somewhere in the neighborhood of $2.5 billion at a bare minimum.

    Yeah, this is still wrong.

  32. They cumin’ to git mah gun!

    ACORN!

    Fairness Doctrine!

    CRA!

    Why won’t he show us his birth certificate?

  33. Strawman!

    Lighter!

    Burn!

  34. Brazen is the only world I can use to describe a guy who pushed for a trillion dollars in spending then says we have to fix the deficit. I gotta go with Xeones on this one.

    From 1933 FDR to 1937 FDR in the span of one week. Saddle up, it is going to be one hell of a ride!

  35. Tall Glenn Becknut | February 23, 2009, 11:45am | #
    They cumin’ to git mah gun!

    ACORN!

    Fairness Doctrine!

    CRA!

    Why won’t he show us his birth certificate?

    I know what you are doing there pardner. You ain’t foolin’ anyone. Your guys are in the hotseat, and you know the joke just aint on you, it is you.

  36. They cumin’ to git mah gun!

    The Dems are working up a new assault weapons ban, you know.

    ACORN!

    ACORN is in line to get a huge chunk of cash from the spending bill, you know.

    Fairness Doctrine!

    Congressional leaders and the FCC are in talks about how/when to introduce a new Fairness Doctrine under a different name, you know.

    Why won’t he show us his birth certificate?

    That one is silly, but a batting average of one out of four is nothing to be proud of.

  37. The Dems are working up a new assault weapons ban, you know.

    Nothing to fear.

  38. President Barack Obama is convening his “fiscal summit” today to figure out how to bring the feds’ spending to heel.

    The hypocrisy is so thick you need need a bushel of Metamucil? to get it to pass.

  39. RC Dean,

    ACORN is not mentioned in the bill at all, the fairness doctrine only exists in the minds of right-wing fearmongers, and these are only slightly less ridiculous than the debunked birth certificate nonsense.

    Stop proving Becknut right.

  40. That one is silly, but a batting average of one out of four is nothing to be proud of.

    It’s nothing to be ashamed of either – 0.250 is middle of the pack.

  41. Um, when you round numbers, you don’t normally decrease them by 23%.

    But when complaining about the mess your predecessor left you, wouldn’t it make more sense to increase the number? You know, maybe he should have said “one and half trillion”, and then republicans would get to complain about how he overstated the mess. And libertarians could still complain about how he was still understating things, so that would be a win-win. Since he didn’t do that, I’m presuming it was a manner of speaking and not something nefarious. Since there is and will be plenty of real nefariousness out there, it would make sense to worry about that instead.

    Really, unless he submits the figure in some sort of official capacity, as opposed to a radio address, getting even a teensy bit upset about this is just silly.

  42. But Obama didn’t study math. He studied being a douche and being a lawyer (or is that the same thing?).

  43. The Fed is going to print up so much money, it will collapse into a black hole, and suck the entire world economy into a singularity. Have we passed the debt horizon yet?

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