Obama’s Fairy Tale Budget Projections
Originally posted February 14, 2011
SOMETIMES IT TRULY FEELS LIKE I’M LIVING IN AN ALTERNATE UNIVERSE IN AMERICA. The Federal Reserve lays the foundation for the economic crisis, then they get credit for “saving” us from another Depression. The Fed buys debt directly in lieu of real buyers, and this is somehow an ingenious strategy. Inflation in America is contained according to the CPI, yet food prices are rising around the world. The economy is supposedly on a sustainable path to recovery, yet people still can’t find jobs and home prices are still under pressure. President Obama talks non-stop about cutting spending, yet he is the biggest spendthrift in U.S. history. Sometimes I wonder what I am missing. I suppose I should be watching more TV so my mind is more receptive to lies, half-truths, and propaganda.
Obama is now reaffirming his stance against uncontrolled spending. His speeches may make for nice sound bites, but they have very little substance. Since I’ve long been immune to dumbed-down speeches and empty promises from politicians, I decided to go to the White House’s Office of Management and Budget website to get enlightened. Unfortunately, I was met with this video presentation worthy of a 1st grader. Oh boy, we’re in trouble.
Aside from the lack of any real analysis from our government in the middle of the biggest debt crisis our country has ever seen, the presenter actually had the chutzpah to say that the deficit has gone down “considerably” because of Obama’s policy decisions. Huh? This is news to me.
The last proposed budget by President Bush was $3.1 trillion. The latest “cost-cutting” budget of President Obama is $3.7 trillion. These are the facts. So how is it that the deficit is going to magically contract in the face of rising spending? Simple. Very optimistic growth rate assumptions.
From 2010 to 2011, revenues are projected to grow 0.5%. Reasonable enough. But in 2012, when people stop paying attention, revenues are projected to grow by 20%! By 2019, our revenues are projected to double from current levels. It took about 14 years for revenues to double in the middle of a historic boom in America from 1994 to 2008. Now we will double our revenues in 8 years in the middle of a clear economic decline magnified by the retirement of Boomers? Highly impossible.
In my experience, it is very hard to convince people that the government manipulates data. The CPI and unemployment statistics are jokes. Why is it so hard to understand that politicians have a vested interest to make things appear rosier than they actually are? Our education system ostensibly makes us independent and critical thinkers, yet I know very few people with these skills. Only the truly independent minds see what’s coming. What I say may sound extreme, but how many unbelievers do you know who actually look at the hard data instead of merely listening to canned speeches? This crisis is going to hit hard as long as we fail to enact structural changes.