The Devil is in the Details
Down on the Animal Farm, Obama's serfs over at the Office of Management and Budget have released a high level explanation of the King's budget for the fiscal year ending September 30, 2010, A New Era of Responsibility: Renewing America's Promise. The President's Budget and Fiscal Preview. http://www.gpoaccess.gov/usbudget/fy10/pdf/fy10-newera.pdf For those of you with long memories, you'll note the cover of this document is exactly the same as the King's campaign manifesto, The Blueprint for Change: Barack Obama's Plan for America. For someone who loves to create make-work government jobs you'd think he'd hire somebody to design a new cover. And what's up with those interlocking curves anything? It's probably some satanic symbol that Aleister Crowley designed.
Much of the early discussion about this worthless document has focused on a chart on page 11 which shows the share of the total income that the top one percent of taxpayers earned. On the chart, this share increases from 10% in 1980, the last year of the Carter presidency, to 22% in 2006 at the height of the hated Bush administration. Since this topic has been so thoroughly covered, I'll offer no comments other than to recommend reading the following fine article in the Wall Street Journal. http://online.wsj.com/article/SB123681860305802821.html Instead, I'd like to call you attention to what's not there, at least not in the text.
After a few inspiring words by our leader, King Hussein Obama I, the document goes right into what surely was the most pleasurable part of the report to write, the section about how Bush screwed everything up. On page 3, the serfs site one of the long term challenges that we face is "the trillions of dollars of debt that we inherited." They expand this topic on page 14 under the heading Fiscal Irresponsibility. As I noted in my last post, they make sure that they point out that Clinton was able to balance the budget, complete with a nifty chart which shows the Clinton surplus' as bars extending over the top on top of a line and the Republican presidents deficits below the line. Left unsaid is the fact that the projected 2009 fiscal year deficit includes over eight months of the Obama presidency, the clear implication being that this deficit was "inherited" from the failed former president.
Now before you go take to the bridge, don't worry, help is on the way. On page 34, the King's serfs note that while he's been forced to add to the national debt in the short term to fix Bush's screwed up economy he'll restore fiscal sanity by "cutting in half by the end of his first term the deficit he inherited on January 20, 2009." This isn't the first time Obama has made this disingenuous pledge, i.e. to cut the deficit, which he helped created, of 2009 in half, but still greater than Bush's deficit in 2008, by 2012. In fact, this pledge is the inspiration for a new diet plan I'm currently on called, appropriately, the Obama Diet. I'm going to pig out like mad in order to gain one hundred pounds by September 30, 2009. Then over the next four years I'll drop fifty pounds and congratulate myself about what great shape I'm in.
As noted previously, this document is intended to be a high level overview of the budget. But the text is not bereft of numbers. In fact, it's loaded with numerous figures and slick charts and graphs. For example, on page 5 we learn that the number of people unemployed for 27 or more weeks has risen by 1.3 million. On page 8 we're shocked to learn 13 million children lived in poverty in 2007. On page 19, the King's serfs brag about the $35.9 billion he's committed for infrastructure improvements. I could go on and on but you get the point and since Obama points out the evils of a government deficit and accumulated debt, you'd think he might mention some of these figures for his budget. After all, on page 14, Obama's serfs dutifully note that the "amount of debt held by the public has nearly doubled to $6..4 trillion from 2001 to 2008." For my math challenged liberal readers, half of $6.4 trillion would be $3.2 trillion and when something doubles, that would mean the increase equals the original amount or in other words, Bush added $3.2 trillion in debt over eight years. I realize it's difficult for liberals to remember anything for longer than a minute, but try and remember these figures as we move forward.
Buried way in the back, in the section titled Summary Tables, is Table S-1. Budget Totals. This table shows the receipts and outlays for the budget for each year up through 2019. The King's projected deficits for 2009 through 2012 are, in trillions, $1.752, $1.171, $0.912, $0.581 for a total of $4.416 trillion which greatly exceeds Bush's eight year total of $3.2 trillion. It looks like some poor schmuck is going to be crying about the deficit he inherited from Obama in four years.
The table also contains a running total of the national debt held by the public, starting with the $5.803 trillion all the presidents up through and including Bush racked up. By 2012, the national debt is projected, by Obama, to be $10,985. By 2019, the national debt is projected to be a staggering $15.370 trillion dollars. It must take a great deal of chutzpah to cry about some guy increasing the debt by $3.2 trillion and then project out an increase in the debt over three times that amount.
Before I leave this topic, it's worth noting that these deficits are only projections and any projection of future activity involves making assumptions about the future.. The King's serfs talk about some of these assumptions on page 36 under the sub-heading, Return to Honest Budgeting. He notes that if he had used the "various gimmicks employed in recent (Bush's - VOE) budgets, it would show in excess of another $250 billion annually in available funds each year, and a bottom line that would appear approximately $2.6 trillion better over 10 years." So under Obama's own numbers, instead of the national debt being $15.370 trillion in 2019 it would only be $12.77 trillion. Well, I'm glad he cleared that up. I feel a lot better.
Besides these accounting gimmicks, a budget also requires basic assumptions about the economy: how fast is the economy going to grow, what's the inflation rate and unemployment rate going to be, and what are the interest rates going to be on the federal debt. These assumptions are presented way in the back on page 132 in Table S-8. Comparison of Economic Assumptions. The table compares Obama's assumptions to the both the Congressional Budget Office (CBO), the supposed non-partisan economists for the Congress, and the February Blue Chip Consensus (Blue Chip), which is a publication put out by a group called Blue Chip Economic Indicators. In nearly every case, Obama's assumptions are rosier than the assumptions of the other two organizations. For example, for the growth in real Gross Domestic Product, GDP, Obama's projections are close to the other two organizations from 2015 and on but in the crucial next three years, Obama's are significantly higher. For 2010, Obama projects a growth rate of 3.2% while the CBO projects 1.5% and Blue Chip projects 2.1%. For 2012, Obama projects a growth rate of 4.6% while the CBO projects 4.4% and the Blue Chip projects 2.9%. For the inflation rate, in 2011, Obama projects 1.8% while CBO also projects 1.8% and the Blue Chip projects 2.4%. I realize these are a lot of numbers but a clear trend seems to be emerging. In general, Obama's economic assumptions are almost always the most favorable, especially compared to the private sector assumptions from Blue Chip.
So what you say? What's the big deal if it's 5.4% instead of 4.5%? When you're applying these percentages to numbers running up to the trillions of dollars it's huge. This table doesn't include Real GDP figures but it does include Nominal GDP figures. For 2012, there's $600 billion dollar difference between Obama's projection and the Blue Chip projection. Assuming the government gets 20% of that in tax revenues and that's an additional $120 billion in revenue.
Of course, Obama's not the first president to monkey with these assumptions but don't forget, the King claimed he was going to be different. And he is different. In a political world filled with charlatans and shady characters, Obama stands above the rest as a bold faced liar and hypocrite. Kenya should be very proud. I realize that's a little over the top but the budget is such a dry topic that I had to try and end with a flourish. Hopefully the next post will be a little less technical. Maybe I'll talk about how the King's ears grow when he lies.