Government Spending

Hawk in Hock

Obama pretends to be frugal as we sink deeper in debt.

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Remember Barack Obama's New Era of Responsibility? It got off to an inauspicious start, with a $787 billion economic stimulus package, a $410 billion appropriations bill, and a record $1.8 trillion budget deficit.

But now the president wants to signal that he's serious about cutting the federal budget. Unfortunately, his plan hinges on the assumption that Americans do not know how to calculate percentages.

In May the Obama administration, after going through the budget "line by line," unveiled $17 billion in budget cuts. That amounts to less than 0.5 percent of the president's proposed $3.6 trillion budget for the next fiscal year and less than 2 percent of the projected $1.3 trillion deficit. 

The following week, the White House raised its estimate of the budget deficit for the current fiscal year from $1.75 trillion to $1.84 trillion. The $89 billion correction was more than five times the cuts Obama had proposed four days before.

The president dismissed critics who were unimpressed by his $17 billion in savings as inside-the-Beltway snobs with no understanding of howregular people view things. "In Washington," he told reporters, "I guess that's considered trivial. Outside of Washington, that's still considered a lot of money." White House Press Secretary Robert Gibbs used the same rhetorical strategy. "I've said this before, and I'll say it again: $17 billion is a lot of money to people in America," he said. "I understand that it might not be to some people in this town, but that's probably why we're sitting on a $12 trillion American Express bill"—a reference to the national debt.

This is the sort of faux-populist argument that insults the public's common sense while pretending to flatter it. Yes, $17 billion is a lot of money for an individual, a municipality, even a mid-sized state. But it is emphatically not a lot of money for a federal government that spends trillions of dollars every year. If you had $12,000 in credit card debt and paid off $17 of it, would you feel like you had made significant progress?

"These savings, large and small, add up," the president said. That is literally true, of course; they just don't add up to much.

But wait. The $17 billion in savings Obama touted in May was on top of the cuts he had already ordered his cabinet to find. In April, saying he was determined to make government "as efficient as possible" and to ensure that "every taxpayer dollar is being spent wisely," he instructed department and agency heads to come up with savings totaling…$100 million.

Here is how The New York Times described the reaction this mandate elicited: "Budget analysts promptly burst out laughing." The fiscally conservative Republican Study Committee, perhaps fearing that the White House was right in thinking that voters can't do basic math, performed the calculation for them, dubbing the president's initiative "Obama's 0.0025% spending cut."

Obama also talks about $2 trillion in "savings" over the next decade, but this amount consists mostly of tax hikes and phantom reductions from unrealistically high baselines. Meanwhile, he is seeking big increases in domestic spending, especially on energy, health care, and education.

This year, the Associated Press notes, "the government will have to borrow nearly 50 cents for every dollar it spends." Even with optimistic economic assumptions, the administration projects budget deficits of more than $500 billion every year from 2010 to 2019, totaling $7.1 trillion in additional debt at a time when Social Security and Medicare spending will be skyrocketing—a looming crisis Obama has not begun to address.

"We can no longer afford to spend as if deficits do not matter and waste is not our problem," the president said in May. "We can no longer afford to leave the hard choices for the next budget, the next administration—or the next generation." I wish that Obama had some influence on the one who is setting the administration's fiscal policy.

Senior Editor Jacob Sullum (jsullum@reason.com) is a nationally syndicated columnist. © Copyright 2009 by Creators Syndicate Inc.

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  1. Unfortunately, writes Senior Editor Jacob Sullum, Obama’s plan hinges on the assumption that Americans do not know how to calculate percentages.

    And what makes you think they do?

  2. The words responsible, frugal and liberals don’t belong in the same sentence.

    You have to remember that, in many states, Consumer Economics is a pass/fail class that barely teaches you how to write a check and pay your income taxes. The way it was explained to me was that you could not fail if you turned in most of the work. Hell, Consumer Ec never taught me how to do things like balance a checkbook, budget or calculate costs.

  3. And what makes you think they do?

    And whose business is it if they don’t?

  4. “If you had $12,000 in credit card debt and paid off $17 of it, would you feel like you had made significant progress?”

    Someone need to bust [President] Obama with that very question at his next national press conference.

  5. “In May the Obama administration, after going through the budget ‘line by line,’ unveiled $17 billion in budget cuts.”

    Isn’t that more than double the amount of earmarks, $8 billion or so?

  6. too bad the things we should be fixing (healthcare) get sacrificed for the things that don’t need fixing (failing companies)

  7. Hell, Consumer Ec never taught me how to do things like balance a checkbook, budget or calculate costs.

    In my school, we were taught how to balance a checkbook at sixth grade camp. No cash allowed for the students. It actually makes sense which is surprising coming from a public school system.

  8. Can you please pull out Obama’s line from the debates where he poo-poo’ed $17B in earmarks?

  9. Just a shade over six months into his presidency, the total national debt has gone up almost a full one trillion dollars since the Anointed One was inaugurated, and that doesn’t include very much at all of the $787 billion stimulus package.

    And don’t you liberals give me this B.S. that he isn’t responsible for any this debt. He voted for the TARP bailout bill, which makes him equally as responsible as anyone else is.

  10. Fuck you mean he lied?

  11. Then let’s make some hard choices.

    Going forward, we need to cut around 30% of spending from the baseline projections. Please pick one of the following

    1: Eliminate Social Security. Entirely. Grandma can beg for dog food.

    2: Eliminate all public health care spending. Shoot poor or old people who show up at a hospital without proof of insurance.

    3: Eliminate all defense spending. Proceed to ask the French for protection.

    4: Eliminate EVERYTHING else…and still cut one of the three things listed above in half.

    Realistically, we cannot cut our way to a balanced budget. Deal with it.

  12. Chad, Master of Hyperbole.

  13. It’s not hyperbole.

    SS, health care, and defense are all around a quarter of the budget – right about what we would need to cut. The other quarter is 10% interest payments and 15% everything else, from the State Department to NASA.

    Which do you want to cut?

  14. Then let’s make some hard choices.

    Going forward, we need to cut around 30% of spending from the baseline projections. Please pick one of the following

    1: Eliminate Social Security. Entirely. Grandma can beg for dog food.

    2: Eliminate all public health care spending. Shoot poor or old people who show up at a hospital without proof of insurance.

    3: Eliminate all defense spending. Proceed to ask the French for protection.

    4: Eliminate EVERYTHING else…and still cut one of the three things listed above in half.

    Realistically, we cannot cut our way to a balanced budget. Deal with it.

    1) No grandparents, so I’m good. But if I catch your granny near my dog’s food you won’t have to worry about feeding her anymore.

    2) I say shout them before they get there. The mess would pile up way too fast. Think of the positive gene pool implications as well.

    3) I got guns yes I do. I got guns, how about you?

    4) All for this one. And lets just nuke the first three.

    Maybe we can spend our way to a balanced budget. That makes more sense really.

  15. +
    When you can print what you owe, you owe nothing.
    +

  16. He does tend to play fast and loose with the numbers. The other night he claimed that if we don’t act now, 14 million people per day will lose their health care. That means in 22 days (fewer now), no one in the US will have health care.

  17. 1. You don’t have to eliminate SS, just raise the retirement age. Make it 70, or even 72. Adjusted for life expectancy that’s still way higher than it was when it was started. If you want to retire earlier, than save more.

    2. Actually healthcare is the big problem. Without reducing it, it will end up crowding out ALL other spending by 2040 or so. Things like changing the fee structure, and tort reform, and computized medicine should be able to fix it. If all of the high and medium cost Medicare providers acted like the low cost providers, we would have the same healthcare outcomes, and save 30% or so a year. It’s possible to have high quality care AND low cost. See the Mayo clinic etc

    3. We could certainly cut out some fat from the military, why do we have bases in Germany etc again???

    Realistically we will have to cut our way to a balance budget. Or we could double the entire tax burden so that the feds get around 40% of GDP, then add in state taxes, property taxes, sales taxes, and you get up to 60-70% of all income would be spent by the government.

    They’ve promised way more in benefits than they will ever be able to pay out at any reasonable amount of taxation.

  18. The amount doesn’t have to be reasonable. The liberals think we’ve got way too much freedom anyway.

  19. “If you had $12,000 in credit card debt and paid off $17 of it, would you feel like you had made significant progress?”

    Someone need to bust [President] Obama with that very question at his next national press conference.

    Well they would, er — but, remember, our media is not biased. Our media does NOT consist primarily of left leaning liberals. And our media is fair and objective. And they’re a bunch of really fucking smart people too.

    So I’m sure that any day now, one of them is going to think up this very question, and just sock it right to Obama.

    Because they always ask Obama all the hard questions.

  20. “Going forward, we need to cut around 30% of spending from the baseline projections. Please pick one of the following”

    “1: Eliminate Social Security. Entirely. Grandma can beg for dog food.”

    Fine with me, since it was an unconstitutional program from the beginning. Arguably FDR’s worst idea, along with the establishment of the UN. But since people like Chad are going to scream about the slightest cut, let’s start by establishing a means test. If grandma will truly be eating dog food without it, fine. She can get payments from Social Security. If grandma is living in a nice condo in Miami, she obviously has the means to survive.

    “2: Eliminate all public health care spending. Shoot poor or old people who show up at a hospital without proof of insurance.”

    Please do. End the War on Tobacco, War on Junk Food, and the War on Drugs. Get the government out of medical research. thereby getting politics out of it. I won’t even address the last part of your last comment since it is so fucking stupid.

    “3: Eliminate all defense spending. Proceed to ask the French for protection.”

    We can defend ourselves effectively without spending as much as we do. Fixing our corrupt procurement system would save billions. Establish a system where companies fund their own research and submit prototypes of new weapons and systems. The military will then pick the best one from these prototypes. This will go a long way towards eliminating cost overruns.

    “4: Eliminate EVERYTHING else…and still cut one of the three things listed above in half.”

    YES! Eliminate every single program not specifically authorized by the Constitution. Where do I sign?

    “Realistically, we cannot cut our way to a balanced budget. Deal with it.”

    Bullshit. Do you really believe the stuff you write?

  21. Realistically, we cannot cut our way to a balanced budget. Deal with it.

    Sure we can. Total federal tax receipts for this year are expected to be roughly $2.15T dollars. Total federal outlays in 2005 were roughly $2.15T dollars. Roll the 2010 budget back to what it was 5 years ago, and you have a balanced budget without any tax increases.

  22. Darn right I’d eliminate Social Security. As EllisWyatt pointed out, it was an unconstitutional program to begin with. If people make it to their old age, after (presumably) working all those years, without ever having saved enough money to support themselves, they are idiots and can work at Wal-Mart as greeters for all I care. Or state and local welfare programs would just have to support them, or friends and families. It is absolute lunacy to not expect people to provide for themselves, and I am sick and tired of the assumption that people can’t do so. It is time to raise our expectations a little.

    The biggest correlator to wealth in the USA is age, which makes Social Security even more horrible. It’s a giant wealth transfer from young, working people who are generally poor, to old, non-working people who are generally wealthy. And regardless of what you think of the program, it’s going bankrupt in a few years whether you like it or not. A lot of people who have been paying into the program for a long time are going to be totally screwed. How are young people supposed to prepare for their own old age if they are socked with the bill for everyone else’s?

    I absolutely hate the program. I will be glad when it finally goes bankrupt, which seems to be the only way we will ever get rid of the awful thing. It will make me glad to see a great evil come to an end, even though I’ll never see a dime of the thousands I’ve paid into it over the last 25 years. Good riddance to it anyway – the end of it can’t come soon enough, in my view.

    I feel exactly the same way about Medicare.

  23. Roll the 2010 budget back to what it was 5 years ago

    Why do you want to kill my poor harmless old grandmother RC? What did she did ever do to you anyway?

    All kidding aside, has Obama pulled our troops out of Iraq yet? The Green Zone ain’t cheap to run, and I seem to have this campaign recollection that he was going to do that.

  24. My only point is that if you take the Bible straight, as I’m sure many of Reasons readers do, you will see a lot of the Old Testament stuff as absolutely insane. Even some cursory knowledge of Hebrew and doing some mathematics and logic will tell you that you really won’t get the full deal by just doing regular skill english reading for those books. In other words, there’s more to the books of the Bible than most will ever grasp. I’m not concerned that Mr. Crumb will go to hell or anything crazy like that! It’s just that he, like many types of religionists, seems to take it literally, take it straight…the Bible’s books were not written by straight laced divinity students in 3 piece suits who white wash religious beliefs as if God made them with clothes on…the Bible’s books were written by people with very different mindsets…in order to really get the Books of the Bible, you have to cultivate such a mindset, it’s literally a labyrinth, that’s no joke

  25. My only point is that if you take the Bible straight, as I’m sure many of Reasons readers do, you will see a lot of the Old Testament stuff as absolutely insane. Even some cursory knowledge of Hebrew and doing some mathematics and logic will tell you that you really won’t get the full deal by just doing regular skill english reading for those books. In other words, there’s more to the books of the Bible than most will ever grasp. I’m not concerned that Mr. Crumb will go to hell or anything crazy like that! It’s just that he, like many types of religionists, seems to take it literally, take it straight…the Bible’s books were not written by straight laced divinity students in 3 piece suits who white wash religious beliefs as if God made them with clothes on…the Bible’s books were written by people with very different mindsets

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