Government Spending

3 Must-See Charts About Obama's Budget

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Here are three charts prepared by Reason columnist and Mercatus Center economist Veronique de Rugy that are drawn from President Obama's budget plan for fiscal year 2013.

The first chart tallies up Obama's proposed spending and proposed "spending cuts" over the next decade. The spending is easy to calculate. The spending cuts are a little more dicey. Obama has said he will trim possible future debt by $4 trillion in this budget. About $1.5 trillion of that total will come from tax increases, so the other $2.5 trillion will come from foregone outlays. [Note: an earlier version of this first chart was mislabeled. The current title is correct; sorry for any confusion.]

This chart adds up the increase in debt held by the public over the next decade if everything goes according to Obama's plan. Though the president likes to stress the need to be responsible in fiscal matters, debt will increase by at around $8 trillion over the coming 10 years.

I find the chart below to be the most interesting of the bunch. Budget plans always include projections of outlays, revenues, shortfalls, etc. The blue bars represent Obama's projections of deficits in the budget he submitted for fiscal year 2010. The red bars are the actual deficits and, in the case of 2012 and 2013, the projections in this year's budget. In 2010 and 2011, the deficits were worse than projected. And the new projections for 2012 and 2013 are worse than what Obama figured they would be in 2010. Which hardly fills you with enthusiasm or confidence about his ability to figure out the budget, right?

Go here to read highlights of the plan and to access the full budget document.

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  1. I wonder what increasing taxation will do to the economy? I wonder.

    1. Encourage those evil capitalists to stop hoarding their money in swimming vaults and hire poor people to do meaningful, nondemeaning, community enhancing jobs.

      1. Horders! J’accuse!

    2. Boom times, baby! Trust me!

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  2. Jonathan Chait told me that De Rugy is a stupid hack so I don’t have to read this article. Nanner-nanner.

  3. Ms. de Rugy, could you look at what an increase in our borrowing costs from the current (absurdly low) level to their historic mean would do to the budget?

    1. could you look at what an increase in our borrowing costs from the current (absurdly low) level to their historic mean would do to the budget?

      Well, I imagine that it would do to the defecit what flushing a block of dry ice does to an aircraft sewage system.

      1. That was a classic article.

    2. Related to that, I wonder if the mix of maturities has gotten a lot longer during the low interest period to “lock in” those low rates for 10 – 30 years. I doubt they have the foresight to do that, but you never know.

      1. Going from memory, a prior round of QE was devoted to keeping the front end of the yield curve flat (the Fed bought a ton of short-term treasuries). Pure genius, that. When interest rates are low, load up on short-term notes!

        The more recent market manipulation by the Fed (called “twist”, for some reason) is focussed on flattening the other end of the yield curve, and involves converting some of their short-term notes to ten-year notes. Probably by rolling the short notes into long notes as they mature.

        1. Whatever the reason, it sure is appropriate as this administration has us twisting in the wind like never before.

  4. Isn’t the actual increase over the 2012 baseline more like $9Bn? $46.959Bn is the total spending over 10 years.

    The title on the first chart is misleading. No need to distort anything when it looks bad enough on its own.

    1. Isn’t that what the chart says? Maybe they fixed it since you said something.

  5. See you Americans in hell. Opa!!

    1. Bring some gyros! I love those damn things!

      1. Greek food and even “Greek” food can be a very nice thing.

  6. Since budgets don’t pass the Senate anyhow (or even get put on the calendar), were I Obama’s re-election team, I’d propose one cutting $1.5T and then kick the Republican House in the nuts when they drag it up to a $100B cut.

  7. Does not take a Rocket Scientist to see that we as a country are heading for the biggest train Wreck in history. Sad that there are so many dumb asses out there who do not know which end is up.

    1. IT’S NOT A SPENDING PROBLEM.

      1. Even if you were to immediately raise tax receipts to 20% of GDP (slightly above the historic ceiling), you’d still have something like a $500BB deficit.

        So how is that not a spending problem?

        1. Duh, just raise receipts to 30%.

          1. Do a balance transfer.

            1. I’m really looking forward to tomorrow. The feds are going to do a balance transfer of over $1000 from me (getting my first quarterly bonus).

              1. Government is good at taking stuff.

                1. But they aren’t even taking it themselves. They’re getting my employer to take it first and then give it to them.

                  1. Plausible deniability.

          2. And set minimum wage to 100/hr so you can increase tax revenues even more! It’s genius.

        2. Sorry, that was me, RC. I thought you’d be able tell because I was doing Tony in a funny voice. But Poe’s law prevailed.

          1. Maybe I have too much faith in a lawyer, but I’m pretty sure he got it. I thought the spoof was fairly obvious.

    2. Why did you capitalize “Wreck?”

    3. Train wrecks can be cleaned up.

  8. Why would Ms. de Rugy mislabel the first chart? President Obama is not “increasing” spending by $47 trillion, that is the budget over current baseline. Moreover, intentionally ignoring revenue increases rigs the second column. I simply don’t understand why being honest about these sorts of figures would undermine the argument, and instead just allows it to be dismissed as hackery undertaken intentionally by an ideologue.

    1. “isn’t the budget increase over the current baseline”, rather.

    2. When you spend X in this year, and then X+Y in the next, you have indeed increased spending by Y no matter what assumptions about always increasing spending have been previously made in order to help hacks sweep the yearly increases under the rug. And Revenue Increases are not Spending Cuts no matter how you wish to spin it.

    3. Yes you are right the chart was mislabelled. Thank you for noticing.

  9. In other words, the Federal Govt has already racked up approximately $37,000 worth of debt for every man, woman and child in the US. That’s before the bulk of the Boomers retire and get their SS and Medicare. And that doesn’t count the vast deficits and unfunded pension and health liabilities of the state and local governments.

  10. Dude that is like totally cool!

    http://www.anon-stuff.tk

    1. Like….totally.

  11. The sad thing is that they REALLY only get to budget the current FY (except for military expenditures which are limited to year appropriations)–And they refuse to deal with the current year.

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