Making Sense of the The Obama Economy

Get ready for it. After the President’s truly historic spending spree, last year, with  the electorate turning decisively against him because of his disastrous fiscal policies, Obama will make a sharp pivot to a  deficit hawk position in his SOTU speech.  And he will of course blame “the last eight years” for the country’s financial woes.

He is hoping we all have horribly short memories:

The nation’s historic debt and record deficits are a direct result of the President’s big-spending agenda.

Debt:  The President’s spending policies have drastically increased the national debt.  Since taking office just one year ago, the President has increased the public debt by $1.47 trillion or 23 percent, from $6.3 trillion to $7.78 trillion.

Under the Administrations’ budget, public debt will triple, jumping to $17.5 trillion dollars by 2019.  Before Obama’s budget and “stimulus” were enacted, CBO estimated that the public debt in 2019 would be $9.34 trillion-or $8 trillion less than it is now projected to be under Obama. In addition, while the President prepares to tout his commitment to fiscal responsibility, he is encouraging Congress to pass a $1.9 trillion increase in the national debt limit, allowing the government to keep borrowing in order to keep on spending.  Today, the cost of the national debt is $39,870 for every woman, man, and child in the U.S.

Runaway Spending:  The record amounts of debt are a direct result of huge spending increases by the Democrats in Congress and the White House.  In one year controlling the White House and Congress, Democrats increased the annual deficit by 308 percent, from $458 billion to $1.4 trillion.  A quick review of Democrat’s spending increases in 2009 shows why the deficit exploded.  In 2009 alone, House Democrats passed $787 billion in “stimulus” spending (which will also add $347 billion in interest), two omnibus spending bills totaling more than $855 billion, and increased non-defense spending by 12 percent.  Faced with declining revenues, the President has chosen the least responsible option by increasing spending and deficits rather than lowering federal expenditures.

Deficits:  Another result of Obama’s runaway spending is record breaking deficits for the next decade and beyond.  Since Obama was inaugurated, the U.S. has had an average monthly deficit of $122.6 billion.  By comparison, from the year 2000 until 2008, the average annual deficit was $196 billion. Unfortunately, the trend of increased federal deficits will not come to an end under the President’s budget.  According to the President’s own estimates, his budget and spending plan will cause deficits to average $905 billion for each of the next ten years.   Budget shortfalls incurred by the government fuel the rise in the nation’s debt because the government is forced to borrow money to meet the shortfall.  In 2009, the budget deficit was $1.4 trillion-the first time in history the deficit exceeded $1 trillion and the first time the deficit exceeded 10 percent of gross domestic product (GDP) since World War II.

Why Spending and Debt Hurt the Economy:  When federal spending exceeds revenues the federal government usually does one of three things:  increase taxes, print new money, or borrow money.  Each of these possibilities is problematic and present different threats to the economy at large-especially during times of economic turmoil.

Keep reading…

Mike Pence appeared on MSNBC this morning to discuss the SOTU, and whether or not Obama has gotten the message from the American people, yet.

See also:

John Boehner:

Can You Blame Them? White House Tries New PR Campaign to Distract From Unpopular Job-Killing Agenda

The Obama Administration’s response to the results of the Massachusetts special election is a new PR campaign, and a hastily put-together one at that.  The New York Times says President Obama’s State of the Union address will now focus on “creating good jobs, addressing the deficit, helping the middle class and changing Washington,” with an accompanying slogan – “a new foundation” – to boot.  But no tacking, no pivoting, no reset-button-pushing, and no speechmaking can paper over the broken status quo President Obama and Washington Democrats have come to represent.  The people have spoken:

Read the whole thing.

Obama was against spending freezes before he was for them:

http://www.cnn.com/2008/POLITICS/09/26/debate.mississippi.transcript/
http://www.cnn.com/2008/POLITICS/10/07/presidential.debate.transcript/
http://www.cbsnews.com/stories/2008/10/16/politics/2008debates/main4525254.shtml

See also:

Obama’s Discretionary Spending Freeze Proposal

Freezes After Huge Increases:  The President’s plan to freeze some expenditures comes after a year of unprecedented discretionary increases which inflated current spending levels.  In March, 2009, the President signed a $410 billion omnibus spending bill for FY 2009 that increased non-defense spending by $32 billion or 8.3 percent above the previous year.  Less than two months ago, in December, he signed yet another, $447 billion omnibus which increased non-defense funding by 12 percent. Not all of those funding increases have taken effect, but the President has not proposed any rescissions.  Between FY 2009 and FY 2010, non-defense discretionary funding increased 17.4 percent.  In addition to the huge increases in regularly appropriated spending, Congress passed a $787 billion “stimulus” bill which included $311 billion in “emergency” discretionary appropriations.  According to the House Budget Committee Republicans, if “stimulus” funding is included, non-defense discretionary funding has increased by 57 percent since Obama took office.

Freezes Only a Portion of Discretionary Spending:  According to reports, the Obama proposal will exempt discretionary “security” spending, including defense, homeland security, veterans, and foreign aid discretionary spending.  Therefore, the discretionary spending subject to the freeze would be limited to portions of the Agriculture, CJS, Energy and Water, Financial Services, Interior, Labor-HHS-Education, Legislative Branch, and the Transportation and HUD spending bills.  According to CBO, those eight appropriations bills account for less than $450 billion or roughly 12 percent of the $3.5 trillion the government will spend in FY 2010.  While any type of spending freeze is a step in the right direction, the President’s proposal would be too limited to considerably reduce deficits, which will average $905 billion annually under Obama’s budget and $672 billion annually under current law over the next ten years.

Ignores Huge, New Spending Programs:  According to press reports, the proposal would exclude spending initiatives that might be passed between now and the start of FY 2011.  This could include the potential cost of implementing a government takeover of health care, the $49.9 billion in discretionary costs associated with a national energy tax, and a second “stimulus” bill which could cost in upwards of $150 billion.  In addition to the huge mandatory costs of the Democrats’ government takeover of health care, according to the Republican staff of the Appropriations Committee, the legislation could cost $150 billion in discretionary funding, costs which are not reflected in the CBO’s scores.  Two CBO letters sent to House and Senate Congressional Leadership prior to consideration of their respective health care bills stated, “CBO has not completed an estimate of all the discretionary costs that would be associated with the legislation.  Total costs would include those arising from the effects of the legislation on a variety of federal programs and agencies as well as from a number of new and existing programs subject to future appropriations.”

Excludes Mandatory Spending:  The spending freeze would not address mandatory spending, which will account for $1.9 trillion or 55 percent of all spending in FY 2010, according to CBO.  For instance, Medicare is projected to be $528 billion or 15 percent of total spending, and CBO estimates that Medicaid will cost $270 billion and account for 8 percent of all federal spending.  Funding for other smaller mandatory programs accounts for an additional $621 billion or 17 percent of federal spending in FY 2010.  In addition, the freeze would exclude any funding designated as “emergency spending,” including mandatory and discretionary portions of the “stimulus” bill, which total almost $500 billion.  None of these funds would be considered for a freeze under the proposal.


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4 Responses to “Making Sense of the The Obama Economy”

  1. Sparky Says:

    The President is a joke. The leaders in congress are a joke. The economy is a joke. Our current debt is a joke. Our defense against terorrism is a joke. Our plan on moving terrorists from GITMO to the U.S. is a joke The entire Federal System is a joke. Why doesn’t President Obama give his State of the Union speach on Staturday Night Live? We could use a good laugh these days.

  2. SOTU Report: Obama to America: No Habla Massachusetts « VotingFemale Says:

    [...] Nice Deb: Krauthamer On Obama’s SOTU Speech: No Pivot, “Tone Was Strained and Unctuous” and Making Sense of the The Obama Economy and Wednesday’s Hero: Specialist Brandon K. Steffy Frugal Café: State of the Union Online Poll [...]

  3. SOTU report: Congratulations Obama! you were promoted to ‘white guy’ for an hour! « VotingFemale Says:

    [...] Nice Deb: Krauthamer On Obama’s SOTU Speech: No Pivot, “Tone Was Strained and Unctuous” and Making Sense of the The Obama Economy and Wednesday’s Hero: Specialist Brandon K. Steffy Frugal Café: Good Grief… More Racist [...]

  4. SOTU Report: Harry Reid Yawns while Janet Incompitano Sleeps « VotingFemale Says:

    [...] Nice Deb: Krauthamer On Obama’s SOTU Speech: No Pivot, “Tone Was Strained and Unctuous” and Making Sense of the The Obama Economy and Wednesday’s Hero: Specialist Brandon K. Steffy Frugal Café: Good Grief… More Racist [...]


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