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Barack Obama’s Budget Deficit Is Bigger Than His Ego

By: Erick Erickson (Diary)  |  October 16th, 2009 at 07:02 PM  | 

RESIZE: AAA

Naturally the White House waited until Friday evening to let this news out. It is catastrophic to his agenda even though he’ll want to blame George Bush.

The Obama administration has released new deficit numbers, and they are not pretty.

The deficit for Fiscal Year 2009, which ended Sept. 30, came in at a record $1.42 trillion, more than triple the record set just last year.

In addition, future deficits are currently projected to total $9.1 trillion in the coming decade.

The Democrats’ natural reaction will be to raise taxes. But that would hurt the alleged economic recovery. In fact, the Democrats are going to need to halt their spending spree. Likewise, if the Blue Dogs are serous deficit hawks, it will mean they must vote no on health care reform.

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  • reason60

    I commented on this a while back in my diary entry, about returning to fiscal sanity.
    Of the $3.52 trillion budget, 6/7 of it, or all but about $500 Billion, is comprised of “sacred cows”; Social Security, Medicare/ Medicaid, interest payments, and Defense.

    Here is where the conservative movement can get some traction- by putting forward a realistic proposal for balancing the budget. Trouble is, that would require angering various interest groups such as Seniors, Defense hawks, and others who are nominally part of the conservative family.

    At the very least, conservatives could get the point across that there is not going to be any easy way out of the budget mess, and shared sacrifice will be the best course.

  • peg_c

    n/t

  • bs

    I have been making this point in my circles quite a bit recently. The hot air that both the Left and the Right blather about earmarks and pork, etc. is severely misplaced. The attention needs to be placed squarely on entitlement spending – Social Security and Medicare. But you can bet your *** that no politician in DC has the balls to do that. So, instead the Left will cut the daylights out of the defense budget, as that’s the only other chunk of money that has any wiggle room.

    There’s only one other answer to budget balancing – taxes.

    We are well and truly screwed.

  • JoeG

    This obscene spending spree is only moving forward the inevitable. Some date out in the future the over-promised social programs were going to implode. The date is now just within our reach.

  • DavidSage

    I honestly don’t blame Republicans for not proposing the needed massive cuts in Social Security and Medicare, it would be electoral suicide. Democrats would only gain greater majorities.

    The only way these sacred cows be fixed is when it becomes a decision between either collapsing our currency or cutting benefits. You simply can’t raise taxes enough to cover the coming liabilities. My guess is politicians still won’t reform the system until we actually have a catastrophe like the currency crisis in Argentina.

    Even though most of the US budget is essentially not debatable, there are other important budget items that Republicans can fight against that will resonate with voters until the entitlement tsunami comes. Obama has busted our budgets with all kinds of graft that does make a huge difference to our deficits, to say nothing of creating a new entitlement (universal health care) that will make medicare and social security look cheap.

  • reason60

    might be things like:
    1. Raising the retirement age to 70;
    2. Government negotiation with PhRMA on Medicare drug prices;
    3. Closing some of the 1,000 military bases around the world;
    4. Less foreign intervention generally;
    5. Modest tax increases. (yes, painful, but may be necessary)

    Every single one of these is vehemently opposed by someone; but the beautiful thing about a balanced budget, it leads inevitably to fiscal conservatism.
    If someone else has a credible way to balance the budget, I would love to hear it.

  • http://keydesignsllc.com bkeyser

    That’s a bold statement- I’m no so sure of it’s accuracy.

  • bs

    The cause and effects of the elements of the economy are beyond the understanding of about 2/3 of the US population. So the cause and effect that you describe will be totally lost in the hyper-caustic political wars. You’re right – the GOP is not to blame. Heck, GWB tried to go down the Social Security reform path and got hammered. It wasn’t worth it.

    No politician is going to be elected, nor will they be rewarded, for fixing this mess. We have created a wealth-redistributing nanny state and a budget that is founded on the principle of special interest giveaways via Social Security and Medicare. I see no practical way to reverse it that doesn’t involve the “fixing” party being voted out of office for years following.

    Pessimist? Yep, that’s me. I see no practical solution to this. We will continue to circle the drain until the economic picture you paint comes to pass. And I don’t want to think about the solution to the problem because I don’t think any of us here are going to like it…because I don’t think it’ll involve cuts. It’ll involve taxes. Lots of them. Europe, here we come.

  • IJB

    People only care about what works *for them*.

    If SS, et al. are causing massive inflation, etc., people will be clamoring to “throw old people out in the streets!” so fast our heads will swim. We’re almost there, I think.

    The trick is to let the Dems get left holding the bag on this. And luckily for us, Obama’s doing our work for us – 4 years of his massive deficits and inflation, and a falling dollar, and people will literally be clamoring to ‘means test’ (read: de-entitle) the entitlements.

    Personally, I can’t wait!

  • bs

    And you’re dreaming if you think that the enormous voting bloc that is/are recipients of Social Security is going to vote to reduce their own benefits. Remember – that bloc is growing substantially now and will be for the next 20 years, as the baby boomer generation retires. Even apart from the AARP, the 50+ crowd has a HUGE influence on politicians. They will support any and all tax increases that shore up their flow of SS checks.

    And again, you’re dreaming if you think that the anger about Obama will result in a swell of GOP Reps and Senators who will swoop in and magically fix the SS and Medicare problems. Once they have their butts entrenched in the Capitol, they aren’t going to do anything to jeopardize their hold on power.

    It Will. Not. Happen.

    Read the original comment again. Budget cutting won’t do it. There’s NOTHING TO CUT. Means-testing is cutting benefits. That means the seniors don’t get paid. And why the hell should *I* be paying into SS if I’m never going to get the money? So now you have a big chunk of the seniors AND a big chunk of the payers pissed at you.

    It Will. Not. Happen.

    Massive tax increases are inevitable.

  • DavidSage

    I agree that maybe you have to truly hit rock bottom before you can reform, but it’s a dangerous game to want to push towards an implosion. I really don’t want to think the only hope for conservatism is the complete financial collapse of the US.

    Usually when financial catastrophe happens, it’s rare that a free-market regime comes into power, but there may simply be no other path.

    I look at California, which is a microsm of what’s coming in the US. I really see no signs of Californians switching their policy preferences, They will most likely keep electing the same type of tax and spend politicians that got them there in the first place,

    The entitlement problem will probably not get truly critical for at least another decade, maybe two. Politicians will be able to put some patches on it to kick the can down the road, but eventually it’s unsustainable.

    If the Democrats are able to get a new entitlement like Universal Health Care though, that time line becomes much closer.

  • http://fairfaxgardener.blogspot.com ddstrain

    adding to your list (before tax increases) the wholesale elimination of federal agencies. I’m sure we could come up with tens of billions in savings just by getting rid of the Cadilllac health plans of the federal civilian work force.

  • nessa

    Your solution of “leaving the dems holding the bag” while a great idea, is no less pessimistic than bs’s post. But what the hell, I prefer the company of pessimists, we’re never un-pleasantly surprised!

  • bs

    reason60′s original comment near the top stated that only about 15% of the federal budget is in discretionary spending. So you could cut every single agency except for the DoD and you’d only slice off about $500B of the $3520B – not even enough to cover half of the Obama deficits.

  • bs

    “we’re never unpleasantly surprised” – that’s the logic I always give my wife for being this way. :-)

  • http://fairfaxgardener.blogspot.com ddstrain

    if I can get out of the system NOW and can keep my and my employers payments to invest, pay for the kids’ college, fix the house, whatever.

    I’ll even let them keep everything I’ve paid in during the past 24 years.

  • IJB

    No one in this country will vote for higher taxes on themselves. If the choice is that, or throwing granny in the street, esp. if times are tough, nearly everyone will vote to give granny the heave-ho!

    What is dreaming is thinking that entitlements can be eliminated in *one step*.

    The first step is to de-entitle them. Yeah, some (eventually, many) people will be paying into a system that won’t benefit them. But, then again, how is that different than public education?!

    Then, once SS is more like welfare, without a universal constituency – then the “reforming” will really begin.

    These programs are less than a decade from going ‘buns up’ – when that happen, there are only two choices: 1) tax increases, or 2) means-testing/benefit cutting.

    Given those choices, most politicians will take door #2. Really, they won’t have a choice.

  • http://fairfaxgardener.blogspot.com ddstrain

    ahead of tax hikes. Cut first.

  • IJB

    There’s going to be an interim people where people like you and me get hosed – we’re going to be forced to pay into a system which we’ll never get to use, and we’ll even explicitly know that ahead of time. People like you and me will be forced to rely on 401k’s (and defined-pensions, *if* you trust them…).

    At some point down the road, I think you and I will them get some choice over what we pay into the SS system.

    But, in the short term, we’re going to get nothing for our FICA taxes. And, you know, I’ll even take it, if it means that SS transitions to a non-entitlement (ditto Medicare)…

  • izoneguy

    Obama’s agenda is unsustainable. That is why he is still in campaign mode talking about those people who are blocking “progress.” We don’t want the socialist progressive agenda rammed down out throats. Socialism never works. And it especially won’t work in America. Until enough people wake up to the fact that the “change” Obama promised was to change America into a collective then we must keep fighting. I am just getting started.

  • bs

    I’m basing my projections on what is politically sustainable. You’re thinking about what makes pragmatic budgetary sense. What will politicians do? They will follow the most politically expedient path. As you can see from the past, present, and a projection into the future, politicians can raise taxes with limited negative ramifications…not always (see: GHWB), but sometimes (see: Bill Clinton). Screwing with senior citizens is a non-player…it is political suicide. Taxes are less painful. Seniors vote in a much larger bloc than any other demographic, and that bloc (as I mentioned) is growing dramatically.

    Medicare is a similar case. Again, you’re screwing with the seniors. Personally, I think this may be one reason the Left is so hell-bent on health care “reform” – to bail them out of having to mess with Medicare. They make that particular part of the equation less of an issue.

    They will take door #1. The political price is lower.

  • bs
  • nessa

    I’m the product of my experiences. My experiences tell me that Murphy’s Laws are strenuously enforced. Even this news today isn’t that bad, I expected to be in a re-education camp by now.

  • izoneguy

    I like the word “logic”. That word is not in the socialists vocabulary.
    Again – the progress of “reforming” healthcare means – We need to dump the seniors for a multitude of reasons.

    1.) Most of them don’t pay taxes any longer.
    2.) Most of them are drawing from Social Security.
    3.) Most of them represent a huge cost for the medical community.

    It really is a war of social, economic and class all coming together at once.

  • ciscoguy

    Which is exactly why we need term limits – too bad it will never happen. Our Framers did a great job building this republic, but that’s one glaring mistake. Another is lifetime judicial supreme court appointments.

  • ciscoguy

    .

  • Richard Mullins

    and that part of the problem when the libertarians talk about things. We should focus on the earmarks in all spending bills. That’s much easier to do than eliminating agencies(that’s almost impossible). Some things like the DOT budget should move it to the states but with one difference, states that have tollways and have more money from tolls than needed for maintenance, should be moved over to non-tolled roads. That could easily free up lots of money in state DOT budgets for Rural areas. The Federal excise money would saved from having to be wasted. At least it’s one good start, so we need to look at ways for saving and not spending everything and more(spending like drunken sailors is the rule in DC).

  • bs

    as has already been covered, earmarks are child’s play. ddstrain’s suggestion makes more sense from a fiscal perspective, as it takes out a lot more cost. But as you say, politically it is not so easy.

    But beating the earmarks drum does little more than make us feel good. The practical impact on the budget is miniscule. It would be akin to a $100K/yr earner saying “you know, I’m going to be more fiscally responsible, so this year I will refrain from buying a Starbucks coffee this week.” Woo hoo! $3.00 out of $100K. The amount of energy we spend railing against such things could be invested in other activities with a better payback.

    (Oh, and on earmarks – surprisingly, I find myself agreeing with Ron Paul…maybe the only time in my life. Paul basically said earmarks are more transparent, as they permit us to see where the money is going, rather than it being assigned to a bucket where heaven knows who/where/how the $ will be distributed)

  • Richard Mullins

    of course now I’m wondering if the re-work on the DOT budget would work(any number crunchers around here). Cutting 500B would be nice but the chance of that happening is nill.

  • petros

    Unlike the other things you mention in your comment, the defense of the country IS a mandated purpose of federal government in the Constitution of the US. The other things, social security, welfare, medicare, education, are not. Defense is a constitutional expenditure; the unconstitutional expenditures (acc. to the 10th Amendment) far outweigh the constitutional ones. If we could get the Federal government to limit itself to only what is constitutional there would be no deficit.

  • jdkchem

    There is no scientific evidence that a vessel large enough to contain the ego of the supreme dear leader exists. In fact further research will conclude that the acceleration of the expansion of the universe can be directly tied to the existence of the “won”!

  • avgamerican

    The United States is already bankrupt. Right now the whole country is on standby for hyperinflation and the onset of a commercial real estate crisis that will dwarf anything people have seen. Gerald Celente, a leading economics forcaster, predicts by 2012, basic food gathering is going to be the major priority in the American house hold. Interestingly he also predicts a tax revolt. Looking at the continuous demise of the private sector makes that prediction reasonable. If businesses are on the brink of losing everything, why would they pay their taxes? The government is going to have too shrink or it will be forced by default. The next candidate would do better by telling the truth about the future instead of trying to paint a happy rosy false picture. Barack Obama is going to fail on his own words. When in 2012, he makes a speech about optimism to a desperate suffering middle class.

  • njre

    Nothing is bigger than Obama’s ego!
    Evidences:
    1. he is above the laws so he does not have to provide credible proof of citizenship for the office of the US presidency!
    See how everyone is asking why:-

    http://www.scribd.com/doc/20917727/WHOARETHEBIRTHERS4-0

    2. He INSISTS on his very own obamacare healthcare policies for all of us little people because he knows best, when in fact obamacare is nothing but HORROR for all.
    Watch this: – ’3-D Halloween Obamacare Horror Show’ video

    http://www.youtube.com/watch?v=mpQlTN9kgfo

  • Ausonius

    “I look at California, which is a microsm of what?s coming in the US. I really see no signs of Californians switching their policy preferences, They will most likely keep electing the same type of tax and spend politicians that got them there in the first place,”

    Archeologists have deduced that Easter Island – now completely barren – at one time had forests.

    Like Californians who keep repeating the same behavior, the Easter Islanders apparently kept cutting down trees – and not planting new ones – until incredibly they were all gone, and the island had to be abandoned.

    By electing tax and spend Dems constantly, Californians are similar to the Easter Islanders: eventually the entire area will be a wasteland and will have to be abandoned.

  • Ausonius

    “Your ego’s writing checks your body can’t cash.”

    For BIG BRObama we can paraphrase it to “His ego’s writing checks we will never be able to cover.”

    But the point of all this is in fact to bankrupt us: BIG BRObama is a revolutionary, a radical, and the Latin base for radical is the word “root” (radish is related): he wants to uproot everything and start us over as a “fair” society, the kind the Russians had for 80 years, where doctors and teachers and engineers are deliberately paid less than gardeners and bureaucrats.

  • dclamage

    There is really only one solution for the Social Security/Medicare quagmire.

    Old people consume benefits from these entitlements. But only as long as they are alive.

    Dead people don’t consume benefits.

    That’s where Universal Healthcare comes in.

  • jiminga

    Love your analogy….same thing happenned in the Cayman Islands. They were named because of the dense population of caymans (croc-like critters). But the locals ate them and there are no longer any caymans in the Cayman Islands. BTW, they also cut down all the lumber trees just like the Easter Islanders.

    Yes, we are doomed.

  • olddog

    The American people were sold ,Social Security, as a trust fund, instead of the PONZI scheme it really was. after seeing the enormous surplus’s that were in it the politicians just couldn’t keep their hands off of it , so they started spending the “surplus” only above payout each year, instead of continuing to let it grow. Now they are having to spend more than is coming into the fund and as the economy worsens , people are retiring earlier, thus speeding up the problem the problem. People were forced into paying into the system rather than having choices for their money. Sound familiar, like the debate on health-care now, forcing people into a system they don’t want, which is and should always be unconstitutional. THROW THE BUMS OUT ,in 2010, 2012, 2013,2014 . Elect people of character, who value the constitution and are willing to serve only one term, to make the hard choices, such as winding down, medicare and medicaid, and social security because they are hard choices. We, as a nation have become soft, not willing to sacrifice , and each generation has become further removed from the values, much was sacrificed for, via our government controlled educational system they don’t even say the pledge in many schools today and allow extreme ideology, to be taught rather than the American ideals.Brainwashing the young is the beginning of any despots regime. taking over the media is next, then your personal freedoms go when they disarm you. Check out Iran, the young, want freedom and the entrenched regime has the guns. So we saw how that went so far.

  • http://www.jeannie-ology.com jeannieology

    butt any more and he’s pulled it out and has it on full display now?

    www.jeannie-ology.com

  • olddog

    should be kept on your Congressmen, by all the means available, because, they think we will lose interest ,if they wait enough, but keeping freedom, means being always vigilant. They go to Washington on huge promises, So let us, elect those who won’t lie to us! check their records and whose campaign monies they have accepted and have them sign a valid contract to serve only two terms, so hopefully they will avoid the corruption in D.C.. Our guys and gals in the thick of it, are sacrificing everything for us, so lets get our government back for them, so they can come home to a free nation. The trouble in Washington is the Elitists who think we are stupid, so they have to take our money to take care of us. See, how that’s working out! They enrich themselves on your Children’s dismal future, unless we stand against them. FIRE THEM ALL, to destroy the power bases they have built.

    OBAMACARE is the Government having their hands around the throat of the people.