Economics

Meet the New Budget, Worse Than the Old Budget

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Congress has passed Obama's budget along party lines. From a San Fran Chronicle account, penned by Reason Contributing Editor Carolyn Lochhead

"Decisions are liberating," the San Francisco Democrat [Speaker Nancy Pelosi] said. "By deciding to support this budget, members are freeing themselves from past mistakes and stale assumptions. They're unleashing the possibilities of the future."…

So what does budget liberation look like?

Although Democrats trimmed Obama's initial plans and ignored his ideas for offsetting the costs of new programs, the thrust remained largely intact. The Obama budget would borrow an estimated $9.3 trillion over the next decade, according to the Congressional Budget Office, doubling the public debt as a share of the nation's output from 41 percent to 82 percent. The budget calls for nearly $4 trillion in deficits over the next five years.

And that failed GOP alternative budget, the one that was fiscally responsible?

The GOP alternative, however, rested largely on continuing Bush administration policies that still would have left deficits in the $500 billion range each year. Republicans called for making the Bush tax cuts permanent, slashing corporate and capital gains taxes and hacking two-thirds of the spending from the stimulus measure approved earlier this year. The GOP budget still would have raised borrowing sharply, to 62 percent of the national output over 10 years.

The one upside? Cap-and-trade seems to have been canned, for now at least.

Whole sorry thing here.

Reason on Obama's budget, which represents a 19 percent increase over 2008 spending, here.

NEXT: Freedom From Choice: Not What You Want

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  1. "Decisions are liberating," the San Francisco Democrat [Speaker Nancy Pelosi] said. "By deciding to support this budget, members are freeing themselves from past mistakes and stale assumptions. They're unleashing the possibilities of the future."...

    *puts head through noose, kicks chair over*

  2. Given a choice between a budget that increased debt at $1 trillion a year for 10 years, and one that increases debt at half that rate, is there really any question which is preferable to the other?

  3. It doesn't sound all that "liberating" to ME, missus Pelosi. In fact it sounds an awful like share-croppery?

    Ain't gonna work on Nancy's farm no more!

  4. freeing themselves from past mistakes...unleashing the possibilities of the future

    It's official: words no longer have meanings.

  5. The Obama budget would borrow an estimated $9.3 trillion over the next decade,

    Less than $1 Trillion per year! What a bargain!

  6. Prediction: SugarFree challenges Obama to a duel at dawn, in Galt's Gulch.

    R C Dean shall be SF's second. Biden being Obama's second.

    The duel is cancelled when nobody involved knows how to use a Congressionally mandated "safe gun".

  7. Only a Libtard could find more debt liberating.

    http://www.notoriouslyconservative.com

  8. The one upside? Cap-and-trade seems to have been canned, for now at least.

    This is a big upside though. None of us are shocked that they're going to run the deficit up, but at least we've avoided giving out carbon hand outs.

  9. I know better than to shoot a black guy. Too much negative media attention. But if I "missed" and winged Biden, would anyone object? Not just here, I mean anyone. Even his wife?

    What if I just shoot off the toupee?

  10. The one upside? Cap-and-trade seems to have been canned, for now at least.

    We these morons in charge, that actually is good news.

  11. What if I just shoot off the toupee?

    Actually, those are hair plugs, so you will inadvertantly get a better effect. Like you could figure out one of those crazy guns!

    Would be cool seeing you guys advance one pace each round until you have to club each other with the pistols.

  12. Under the circumstances, I don't understand why we wouldn't slash the corporate tax rate.

  13. Under the circumstances, I don't understand why we wouldn't slash the corporate tax rate.

    Because the rich must be punished.

    Haven't you been following along the past 3 years?

  14. Well, now, the important thing to remember is our current members of Congress will all be dead from old age before the shit hits the fan.

    Maybe.

  15. Where is Naga? We need his input here.

  16. It's official: words no longer have meanings.

    huh?

  17. Under the circumstances, I don't understand why we wouldn't slash the corporate tax rate.

    Because no libtard understands basic economics, such as Laffer's curve

  18. huh?

    He might be talking about your White Zinfidel and interior design comments. Not positive on that.

  19. Where is Naga? We need his input here.

    Judging from the last few days, I'm going to guess: Face down in some Asian chick.

  20. Judging from the last few days, I'm going to guess: Face down in some Asian chick.

    I was going to guess that some Asian chick put him in the hospital, the not fun way, but his new one left him a sweet note on the Vapors thread.

  21. Well, now, the important thing to remember is our current members of Congress will all be dead from old age before the shit hits the fan.

    Absent the 535-heads-piled-in-front-of-the-Capitol scenario, I seriously doubt it. The inflationary shit will hit the fan, I'm guessing, in late 2010.

    Of course, Our Masters are far too well ensconced in their inflation-adjusted pensions, their insider-fueled portfolios, and their miscellaneous sweetheart deals to be directly affected.

  22. doom
    DoooM
    DOOOOM
    DOOOOOM

  23. From where I sit, things are lookin up. Gotta have faith my brothers and sisters.

  24. So it is decided.

    WE ARE DOOOOOMED

  25. Is it time quite yet
    For the friday haikus thread?
    Doom doom doom doom doom

  26. Looking up indeed if you are sitting on the sidelines waiting for the rest of us to produce everything you need.

  27. Under my plan, you die tomorrow. Under the other fella's plan, you die when you're 95. But you still die. Therefore, support my plan. Thank you.

  28. I thought Cap and Trade was the market-friendly strategy, as opposed to just plain old regulation?

  29. Seems about right. Republicans propose too much spending and some tax cuts, Democrats counter with way too much spending and no tax cuts for a higher deficit.

    It's exactly like we saw for the previous 8 years, except now we have a Democratic majority in Congress and a Democratic President, so we get the second alternative.

  30. (Of course, i realize there's a big flaw in cap and trade, in that the interested parties can game the system so that the cap is set way too high, making the carbon cheap. I believe that happened in Europe.)

  31. Cap-and-trade's not exactly out, but the Senate adopted an amendment saying that cap-and-trade was too big a deal to be adopted through budget reconciliation. That matters because budget reconciliation takes a simple majority, not 60.

    I believe that the Senate refused to adopt a similar amendment on nationalized health care, so that still might get put in the budget to bypass filibusters.

  32. Cap and trade is plain old regulation. The government taking over complete control of the allocation of emisions doesn't sound market friendly to me. Yea, some traders get to make a living from whole cloth, but we're all still fucked.

  33. Reinmoose | April 3, 2009, 10:56am | #

    "It's official: words no longer have meanings."

    huh?

    The irony of Pelosi's comments escape you?

  34. The Senate also:

    Declined to prevent automaker bailouts.

    Declined to shut off TARP funds.

    Declined to open up the Outer Continental Shelf for oil and gas. (What, you thought that became allowed last year? Nope, the new Administration has quietly blocked and delay implementation.)

    Declined to implement President Obama's proposed earmark reforms.

    Of course, the hated McCain was on the losing side on all four.

  35. Cap-and-trade might be out, but won't they just introduce a direct carbon tax?

  36. If you're going to regulate, cap-and-trade is demonstrably better than alternatives. In theory, a perfect cap-and-trade is equivalent to a tax of the right amount. In practice, a tax is fairer, easier to determine the proper level (IMO, room to argue here), and less corrupt.

  37. Declined to open up the Outer Continental Shelf for oil and gas. (What, you thought that became allowed last year? Nope, the new Administration has quietly blocked and delay implementation.)

    Inexpensive fuel is the enemy of the new cars the government wants to produce in their newly acquired manufacturing facilities.

  38. Reinmoose | April 3, 2009, 10:56am | #

    "It's official: words no longer have meanings."

    huh?

    The irony of Pelosi's comments escape you?

    I believe he was unable to understand your newly-declared-to-be-meaningless words.

  39. The irony of Pelosi's comments escape you?

    I know it's subtle, but the "huh" was a(n intentionally) witty comment designed to imply that I didn't understand what you said because the words don't have meaning...
    oh forget it.

  40. Cap-and-trade might be out, but won't they just introduce a direct carbon tax?

    There was a amendment (roll call 135) making a carbon tax more difficult this year... basically the amendment says that people making up to $200k can't net owe any more taxes due to an energy tax. Sort of a "uphold Obama's promises" amendment. Passed by two-thirds.

    Senate also negated the charity deduction proposal, or made it impossible to pass.

    Senator DeMint's make the CPSIA less burdensome amendment failed, saddening Virginia Postrel.

  41. Should we be sending thank you notes to the Chinese who are going to underwrite all this borrowing?

  42. Should we be sending thank you notes to the Chinese who are going to underwrite all this borrowing?

    We may have a new buyer. Who was that king that Obama was bowing to the other day?

  43. FFFFFFFFFFFFFFFFFFFFFFFFFFUUUUUUUUUUUUUUUUUUUUUUU

  44. There was a amendment (roll call 135) making a carbon tax more difficult this year... basically the amendment says that people making up to $200k can't net owe any more taxes due to an energy tax.

    So the carbon tax will come with a refundable tax credit? I have no idea how you can implement this in a cap and trade scheme, where the costs to be refunded will be spread across everything you buy.

    Unless, of course, they define an energy tax as a direct tax, so that it wouldn't apply to an indirect tax like cap-and-trade. That must be it. More eyewash in the Age of Obama.

  45. So the carbon tax will come with a refundable tax credit? I have no idea how you can implement this in a cap and trade scheme, where the costs to be refunded will be spread across everything you buy.

    Not clear. It's a point of order, so it could always be stripped out later in the budget reconciliation procedures, like much else.

    It's more significant really as a marker that a large percentage of Democrats are not willing to sign up for either cap-and-trade or a carbon tax right now.

  46. The one upside? Cap-and-trade seems to have been canned, for now at least.

    I cannot imagine the feeling of woe that most corporate officials at G.E. are feeling right now, seeing this potential filler-of-their-wallets slipping away . . .

    . . . Oh, I guess the environmentalist wackos are feeling sad as well, but they're not the ones that would reap the rewards of this backward scheme, so I don't care about them.

  47. Maybe, John. I regard this more as a statement that the Democrats have no objection in principle to crippling our economy with a carbon tax, but want the White House to provide them with some damn fine populist ass-covering before they vote for it.

  48. What we need to do right now is come together as a country and fix this problem. Parties aside, i still think that there is more that we can do. http://www.newsy.com/videos/budget_battle/ talks about the discord between parties

  49. Should we be sending thank you notes to the Chinese who are going to underwrite all this borrowing?

    That's one of the problems. When you borrow 25.5 million dollars* from the Chinese, you'll just want to borrow 25.5 million an hour later

    *actual amount of debt per hour based on a 9.3 trillion 10 year deficit w/ China holding 25% of it (as they do now)

  50. The one show of bipartisanship durning the very partisan (see:http://www.newsy.com/videos/budget_battle/) budget process was the cap and trade initiative which was removed by the Senate. 26 Democrats crossed the aisle to defeat the initiative which was good for the environment but unrealistically expensive.

  51. I regard this more as a statement that the Democrats have no objection in principle to crippling our economy with a carbon tax, but want the White House to provide them with some damn fine populist ass-covering before they vote for it.

    That kind of amounts to the same thing, in my mind. Cap-and-trade and a carbon tax will both be quite difficult to pass, it looks like. The Democrats have the numbers, but they're apparently still running scared on the issue. It scares them a lot more than, say, allowing drilling, where they've decided that with oil prices down, no one cares about that more.

    It was an amendment by Lindsey Graham, incidentally.

  52. Why is the potential loss of cap-and-trade a downside? Are libertarians so beholden to their anti-government rhetoric that they would prefer to let a major market failure occur than have the government attempt to fix it? Or are you saying that a carbon tax would be even better?

  53. "From where I sit, things are lookin up. Gotta have faith my brothers and sisters."

    Whoopee. I have about as much faith in the intelligence of elected officials as I have in the intelligence of the people who elected them. Which means that I think we're doomed. I'm thinking of moving to Canada. My logic: I've always thought Canada was a nice country, apart from being socialist. But if the U.S. is going to be just as socialist as Canada, but in a dumber and even more inefficient way, why not go for the real thing?

  54. Chad,
    I'd love for the government to replace the income tax with a carbon tax. I would celebrate any Congress and president who passed a law to that effect. That said, since the government would not have replaced the income tax with a carbon tax is cap-and-trade revenues in a million years, I consider the death of the cap-and-trade idea the lesser of two evils.

    And yeah, I actually think a carbon tax would be a better idea.

  55. And I'm assuming Chad meant upside rather than downside.

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