Economics

How's That Budget Freeze Working Out?

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Reason columnist and Mercatus Center economist Veronique de Rugy does some quick math on President Obama's proposed freeze on spending over at The American:

The three-year freeze over the course of ten years will save on the order of $250 billion. That amounts to only 0.58 percent of the total federal spending during that period. This seems a rather meek savings especially in light of the CBO data showing ten-year baseline deficits of $6 trillion under current laws….

President Obama outlined a menu of small initiatives aimed at helping middle-class families (increasing child care tax credits) and small businesses (such as eliminating the capital gains tax). He also outlined larger infrastructure initiatives and green energy initiatives. All these measures would be part of a new job bill, which he told Congress he is expecting on his desk soon.

He also announced a series of spending measures to bolster education spending, boost community college education, make college affordable, and expand Pell Grants. He proposed to require that students never have to spend more than 10 percent of their income each year repaying their student loans and to give debt forgiveness to those going into "public service."

Finally, he asked Congress to pursue healthcare overhaul….

The total cost of all of the measures will definitely be well over $250 billion over the next ten years. How is that a freeze? Where are the cuts coming from?

The short answer? Nowhere.

Whole thing here.

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  1. The short answer? Nowhere.

    Then this will be Obama’s big chance to get away from it all.

  2. I think it counts as a freeze because they keep track of the money on a computer in a server room. Financial data is best served cold.

  3. I don’t think the TOOTUS will be freezing or doing much of anything. The Congress will be doing all of that. Obama is a spent political force, a lame duck a year into his term.

    1. I hope so. But, as The Jacket points out, we’ll be saddled with debt long after people are pissing on Obama’s grave.

  4. Well, in Obama’s defense, it is hard to freeze anything as large as the federal budget with all the global warming going on.

    1. Also, Piltdown Man.

      1. Sounds like a scam to me.

        1. *rubs chin*

          Interesting, now that you mention it.

          1. A scam within a scam within a scam.

            1. You just won the caption contest. Well done, me lad!

  5. Didn’t you hear Obama last night? You push off being fiscally responsible until next year, and then, even though you’re already horribly in debt, you buy the two car garage instead of three. It’s called budgeting.

    1. And he said something about the Republicans obstructing everything too. How are they obstructing a freeze if they aren’t letting any bills pass?

    2. I forgot to add that because we downgraded to a two acr garage we can add amenities like HVAC and a plasm tv. And a margarita machine.

  6. I will gladly pay you Tuesday for a stimulus today.

  7. The three-year freeze over the course of ten years will save on the order of $250 billion. That amounts to only 0.58 percent of the total federal spending during that period.

    And they could even save more if they took their time to cut out some coupons from the Sunday paper.

    1. I thought I was reading right here that they already print their own coupons?

  8. The only thing that interests me at this point in the lie fest is whether Ordinary Americans still believe this horseshit. Polls indicate that perhaps we’re finally awakening from a deep slumber, rubbing our eyes, looking around and shouting, “Holy shit! What the–?” That, or we really are in for it.

  9. Great, it will only take 30 or so years to offset the principal spent for the porkulus bill. I’ll leave it to the professional economists to calculate the additional time for interest on the porkulus.

  10. If they want to “make college affordable” they could start by not pushing it on so many dumb people.

    1. But the Pres said it’s teh only way to get a job!

  11. Big mouth little brain, All talk,blah blah blah, they can’t stop spending. They are alcoholics in the liquor store with dads credit card. One term President for sure.
    http://www.suckitupcrybaby.com

    1. Have you met privacy bot?

  12. Have I become too cynical? I actually assumed that no one — not Obama, not Pelosi, not Reid, not the House, not the Senate, not any but the most deluded or moronic American citizen — would put any credence whatsoever in this “promise” to “freeze” spending. If you believe that for more than a few seconds, you’ll believe just about anything.

  13. Alert! Alert! Alert!

    How come every since obama took office everybody started not including intergovernmental debt in their debt statistics? All through the Bush years, the debt numbers presented were always the gross debt, but now they just use the net debt, which appears much smaller.

  14. We will freeze the budget and reign in spending, but first… BULLET TRAINS!!!

  15. The author and above commentators are correct, it is a drop in the bucket.

    But at the same time, why not bank the $250 billion and then get to work on doing more?

    I’d love to see the Republicans introduce a bill doing exactly what Obama proposed and urge him to push the majority to fast track it.

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