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Budgets are instructive as an expression of their author's priorities. Judging from the White House's budget blueprint, President Obama’s priority is getting reelected.
That’s intended less as a criticism — though it could be — than as a statement of fact. Darn near every politician is obsessed with keeping his or her job. Everything else is secondary. Why did House Republicans drop their opposition to an extension of the payroll tax cut without corresponding spending reductions on Monday? Because they’ve concluded that to be opposed to tax cuts for a struggling middle class is an election-year loser, that’s why.
What Obama unveiled Monday was pretty much a mirror of what he’s done the last three years. The good news about his $3.8 trillion budget for fiscal year 2013 is that it’s flat compared to the current year, up just two-tenths of one percent. The bad news is that it still will require Uncle Sam to borrow 24 cents on every dollar spent, and that’s assuming the automatic budget cuts to the military and to Medicare reimbursements for doctors kick in, by no means assured, perhaps even unlikely.
In fact, including 2012’s anticipated $1.3 trillion deficit, this will make it four straight years of topping the once-unthinkable $1 trillion mark in red ink. Obama has failed miserably in keeping his campaign promise to cut the deficits in half in his first term, after inheriting a $1.4 trillion gap from his predecessor in FY 2009.
Of course, the White House intends to offset his preferred spending with tax hikes — on income, capital gains, dividends, estate inheritance, etc. — primarily for those making more than $250,000 annually. Defense will be slimmer. Some effort was made to slow the growth of Medicare and Medicaid but not much, as both are expected to double in size over the next decade as health care costs soar and baby boomers retire in record numbers. The president also would spend more on road and school construction and on teachers, cops and firefighters.
The administration claims this budget contains $4 trillion in deficit savings over the next 10 years. Republicans say it’s really a drop in the bucket of about $300 billion because it assumes future cuts that won’t happen. Whatever, even under the president’s best-case scenario, this blueprint envisions adding another $6.7 trillion in debt by 2022, with no annual shortfall going below $575 billion, which is probably optimistic — especially if nothing is done to rein in entitlements — but in any case would have blown all previous red ink records out of the water just five years ago. Might we add that an unprecedented $5 trillion has been added to the national debt so far in this president’s term?
Budgets are instructive as an expression of their author's priorities. Judging from the White House's budget blueprint, President Obama’s priority is getting reelected.
That’s intended less as a criticism — though it could be — than as a statement of fact. Darn near every politician is obsessed with keeping his or her job. Everything else is secondary. Why did House Republicans drop their opposition to an extension of the payroll tax cut without corresponding spending reductions on Monday? Because they’ve concluded that to be opposed to tax cuts for a struggling middle class is an election-year loser, that’s why.
What Obama unveiled Monday was pretty much a mirror of what he’s done the last three years. The good news about his $3.8 trillion budget for fiscal year 2013 is that it’s flat compared to the current year, up just two-tenths of one percent. The bad news is that it still will require Uncle Sam to borrow 24 cents on every dollar spent, and that’s assuming the automatic budget cuts to the military and to Medicare reimbursements for doctors kick in, by no means assured, perhaps even unlikely.
In fact, including 2012’s anticipated $1.3 trillion deficit, this will make it four straight years of topping the once-unthinkable $1 trillion mark in red ink. Obama has failed miserably in keeping his campaign promise to cut the deficits in half in his first term, after inheriting a $1.4 trillion gap from his predecessor in FY 2009.
Of course, the White House intends to offset his preferred spending with tax hikes — on income, capital gains, dividends, estate inheritance, etc. — primarily for those making more than $250,000 annually. Defense will be slimmer. Some effort was made to slow the growth of Medicare and Medicaid but not much, as both are expected to double in size over the next decade as health care costs soar and baby boomers retire in record numbers. The president also would spend more on road and school construction and on teachers, cops and firefighters.
The administration claims this budget contains $4 trillion in deficit savings over the next 10 years. Republicans say it’s really a drop in the bucket of about $300 billion because it assumes future cuts that won’t happen. Whatever, even under the president’s best-case scenario, this blueprint envisions adding another $6.7 trillion in debt by 2022, with no annual shortfall going below $575 billion, which is probably optimistic — especially if nothing is done to rein in entitlements — but in any case would have blown all previous red ink records out of the water just five years ago. Might we add that an unprecedented $5 trillion has been added to the national debt so far in this president’s term?
One appreciates that those numbers are so big they don’t mean anything to most. What’s alarming are the spending and debt as percentages of gross domestic product, or the size of America’s economy. Numbers like this haven’t been seen since the end of World War II, which the United States had the good fortune to win, leaving it the last economy standing. That’s not the case today.
At some point not so far away, more than a few economists say the nation will reach a point of no return. We’re just leaving those bills, and the fragile economy likely to accompany them, to future generations. There’s a moral component to that. Do the baby boomers who’ve enjoyed the luxury of timing and previous prosperity own no conscience about that? In Greece last weekend, opponents of their government’s reluctant embrace of austerity measures to stave off default took torches to national heritage sites, banks and other businesses. They probably would have burned down Parliament if they could. Greece’s debt-to-GDP ratio is significantly worse than America’s — at 160 percent about double — but a foreshadowing of what’s to come?
Of course, some believe Uncle Sam isn’t spending and borrowing nearly enough to stimulate an economy that isn’t growing fast enough for their tastes, if it ever is. So what would be enough? A $5 trillion budget with a $2.5 trillion deficit? Borrowing 50 cents on the dollar instead of a quarter?
