President Barack Obama’s budget will lead to deficits averaging nearly $1 trillion over the next decade, the CBO estimated Friday.
The Congressional Budget Office (CBO) said President Barack Obama’s budget would lead to annual deficits averaging nearly $1 trillion for the next decade.
The estimates are for larger deficits than the budget shortfalls expected by the White House.
Annual deficits under Obama’s budget plan would be about $976 billion from 2011 through 2020, according to a CBO analysis of Obama’s plan released Friday.
The Obama administration estimated its policies would lead to an average annual budget shortfall of $853 billion for the next 10 years.
The difference is that Obama’s estimate expects more tax revenue.
More tax revenue? Now where did they get that idea? This is the most business unfriendly and economically disastrous administration America has ever produced. The policies and agendas that the Obama administration have pushed with a vengeance doesn’t exactly instill confidence in the private sector or foster the kind of economic environment to grow jobs. Instead you get exactly what many, many were predicting at the very start. Here’s more.
The nonpartisan Congressional Budget Office predicts that Obama’s budget plans would generate deficits over the upcoming decade that would total $9.8 trillion. That’s $1.2 trillion more than predicted by the administration.
The agency says its future-year predictions of tax revenues are more pessimistic than the administration’s. That’s because CBO projects slightly slower economic growth than the White House.
The deficit picture has turned alarmingly worse since the recession that started at the end of 2007, never dipping below 4 percent of the size of the economy over the next decade. Economists say that deficits of that size are unsustainable and could put upward pressure on interest rates, crowd out private investment in the economy and ultimately erode the nation’s standard of living.
Ed Morrissey at Hot Air
Er, yeah. In other words, water is wet, too. This doesn’t even qualify as Econ 101; anyone not already knowing this would get tossed out of King Banaian’s excellent lectures at St. Cloud State University.
Let’s make sure we extrapolate this for everyone onto other public policies, while we’re at it:
- Increasing the minimum wage forces businesses to pay more for labor. Either they hire fewer people or they raise prices — which undermines the buying power of those who make the least amount of money.
- A carbon tax or cap-and-trade bill will force energy producers to either raise prices to its customers or scale back power production, which will force businesses to either raise prices or cut back production, which will mean more cost or more scarcity for consumers — both of which are inflationary.
- Higher fees on insurers, medical-device manufacturers, and other goods and services in the health-care industry mean higher prices for consumers in the form of increased premiums or in greater scarcity as suppliers fail to come to market.
Imposing higher costs on business means higher costs for consumers. It means fewer jobs, less consumer choice, less innovation, and economic decline. I’d be surprised if the CBO analysis itself doesn’t end with the word duh in the last sentence.
Commentary
Jason: This is the most business unfriendly and economically disastrous administration America has ever produced.
The greatest economic debacle since the Great Depression occurred during the Bush Administration, largely due to lax oversight, procyclical policies and their general non-reality-based philosophy.
Causes of U.S. budget deficits.
But of course, Zachriel. It was Bush then and it has been Bush all along.
Get some new material.
Jason: Get some new material.
You brought it up by making an historical claim.
You are clearly trying to lay the current economic troubles on the Obama Administration. Certainly, it is their responsibility to devise policies to address the problem, but you can’t reasonably claim this is the most “economically disastrous administration America has ever produced.” That leaves aside both the Hoover and Bush Administrations.
Zach, can I call you Zach, you really do not want to get in a historical exchange over the economy in a tiny comment section. And if you think I am rabid Bush supporter, think again. However, the Bush administration did set a first time record with 56 straight months of job growth. Check this out and take notice of the sources and stats. http://westernexperience.wordpress.com/2009/04/10/those-rotten-bush-tax-cuts-and-the-richy-riches-who-benefit-from-it-revisited/
And Hoover and Bush? Two Republican administrations, of course. Have you dared or cared to look into the Roosevelt polices during the Great Depression? I know, I know he brought us out of the Great Depression, and a Democrat to boot. But you should look again and see the fallacy in their Keynesian polices. There is simply too many nuances to label but one could argue well that we went into a second depression during the middle of Roosevelt’s tenure.
You are more than likely an Obama sycophant or else you would obviously see what exactly has went down during Obama’s administration. Seriously, have you taken a look at these numbers?
Jason: However, the Bush administration did set a first time record with 56 straight months of job growth.
That’s the nature of a bubble economy. Cutting taxes and running deficits during an economic expansion, while simultaneously allowing for lax oversight, left the U.S. economy vulnerable. Now the bill is due. A more moderate policy might have averted much of the debacle while leaving the U.S. balance sheet in a better position to weather the storm.
Jason: And Hoover and Bush? Two Republican administrations, of course.
Hoover didn’t have the theoretical tools available. Classical theory said to maintain a balanced budget. That meant cutting taxes during expansions and raising taxes and reducing expenditures during contractions. This procyclical policy exasperates the natural economic cycles leading to boom-and-bust cycles. Countercyclical policies moderate booms while preventing the downward spiral that leads to economic collapse.
The Bush Administration, on the other hand, ignored the lessons of history, living instead in the non-reality based world, at least until the crisis occurred. Then they realized they had to raise capital, and raise it quickly, to prevent a complete meltdown. Which to their credit, they did.
Jason: But you should look again and see the fallacy in their Keynesian polices. There is simply too many nuances to label but one could argue well that we went into a second depression during the middle of Roosevelt’s tenure.
The dip of 1937-1938 was because they ignored Keynes and tried to balance the budget and reign in fiscal policy before the economy had recovered sufficiently. It was the vast deficit spending of WWII that finally lifted the U.S. out of the Depression, money that was repaid, by the way.
Jason: You are more than likely an Obama sycophant or else you would obviously see what exactly has went down during Obama’s administration.
You made a false historical claim.
The U.S. has no choice but to run deficits for the next few years. Then it will take discipline and maturity to take the measures necessary measures, taxes and cuts.
This is all doable. Remember, the U.S. had a budget surplus just a decade ago, and was on the way to paying down the debt and setting aside money for social security. Fiscal stability can be restored, but it will take some time.
Actually, you’re both wrong, because you’re both thinking with your ideology. Bush’s Presidency can hardly be called an economic disaster; the factors that caused this recession had almost nothing to do with any of his policies. Obama’s Administration is still far too short to be called the greatest disaster, though it’s certainly not looking good.
The worst economic Preisdency was probably the first term of Grover Cleveland.
I would have more respect for the President if he just came out and said, “I don’t care about the deficit. We need to spend our way out of the recession, and I want to start lots of new social programs to help people that will cost money.” I might not agree with that, but I can respect it. Instead, he insists on aping a posture of fiscal responsibility while doing the exact opposite.
Sanity Injection: Bush’s Presidency can hardly be called an economic disaster; the factors that caused this recession had almost nothing to do with any of his policies.
The root of the problem was unregulated markets and over-stimulation of the economy. Bush didn’t invent the market cycle, but these factors were under the control of his Administration.
Sanity Injection: The worst economic Preisdency was probably the first term of Grover Cleveland.
The Panic of 1893 was during Cleveland’s second term.
By the end of the Hoover Administration, GNP had dropped a third, capital investments virtually dried up, and a quarter of the working population was unemployed.
I still don’t get it when you refer to the markets as unregulated under Bush. They were heavily regulated. When Congress and NGO’s can tell banks when and how to lend, the market is regulated.
Twice we referred to “lax regulation,” once to “unregulated.” Both apply. On laxity, regulators allowed the subprime market to expand by letting banks give the riskiest loans to the poorest and least savvy borrowers. The latter applies to the $60 trillion trade in complex and risky securities called the “shadow market,” trillion dollar bets based on nothing more than the unfounded belief that prices will always rise, or at least, you can stick the other sucker before it collapses.
When markets expand rapidly, they need a steady hand on the tiller. When markets expand rapidly outside of regulatory oversight, it’s inviting disaster.
Zachriel – The Panic of 1893 was as bad as it was because Cleveland’s *first* Administration had failed to resolve the silver issue. Free coinage of silver was the problem, but instead of finding a compromise with the silverites, Cleveland’s rigidity prevented a solution and allowed the problem to fester until it ultimately torpedoed the economy. Very much as a certain modern President’s obstinacy is going to ruin the chance for a real health care reform that could address the spiraling cost of care now before it’s too late.
Json/Mike,
I like the new site’s motif. Speaking of taxes, Am I a fool for having hope in a liberal?
Rep. Pete Stark, D-Calif stepped aside and let Rep. Sander Levin take Rangels place as the chairman for Ways and Means.He can’t be worst than Rangel right? He has got to be better than Reich. Am I just prejudiced as a white male construction worker who felt personally targeted by Reich and Rangel? I can’t help but have some hope that Levin may not be as bad. Not like we get a chance to vote on this anyway. Or am I making to big a deal out of it? After all it’s only our tax law that they write.
Yes, I’ve checked his voting record and while I don’t agree with all of it. It looks possibly hopeful. Would like to see you all cover this in an article.
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