Obama's Budget -- Straight From La La Land
By Peter Morici
Today, President Obama released his proposed 2011 budget, which forecasts the federal deficit will fall to $706 billion by 2014 or just 3.9 percent of GDP before rising again in 2015.
To accomplish this feat, he proposes letting the Bush tax cuts expire and other spending cuts the Congress has rejected in the past. More extraordinary, though, the document assumes that real GDP grows at better than 4 percent a year over the four years from 2011 to 2014, and the economy does not encounter a serious recession.
If your staff economist tells you that is realistic, fire him.
Rosie Scenario wrote this budget.
The United States is facing deficits greater than one trillion dollars for the foreseeable future, and investing in long-term U.S. government bonds is a very risky proposition. It is not that Washington won't pay, but longer term, an international run on the dollar and inflation are real risks.
Investing in U.S. bonds now entails considerable political risk. A populist government, similar to those that drove Latin American republics into bankruptcy during the 1970s is in charge.
Obama's strategy: low growth policies and assume away the consequences.
This Mark Steyn article's scope is somewhat broader than the "mere" acknowledgement of a budget, and a budget deficit, and a national debt, never before seen in human history, but I thought I'd pass it on just as well:
...That's why Obama is such a job-killer. Why would a small business take on a new employee? The president's proposing a soak-the-banks tax that could impact your access to credit. The House has passed a cap-and-trade bill that could impose potentially unlimited regulatory costs. The Senate is in favor of "health" "care" "reform" that will allow the IRS to seize your assets if you and your employees' health arrangements do not meet the approval of the federal government. Some of these things will pass into law, some of them won't. But all of them send a consistent, cumulative message: that there are no rules, that they're being made up as they go along – and that some of them might even be retroactive, as happened this week with Oregon's new corporate tax.
In such an environment, would you hire anyone? Or would you hunker down and sit things out? Obama can bury it in half a ton of leaden telepromptered sludge but the world has got the message: More Washington, more microregulation of every aspect of your life, more multi-trillion-dollar spending, and no agreed rules in a game ever more rigged against you.
Obama and the Democrats have decided, in the current cliché, to "double down." That hardly does justice to what the president's doing. In effect, he's told embattled congressmen and senators to strap on the old suicide-bomber belt and self-detonate for the team this November.
That's a lot of virgins to pass out, but, with this administration, budget restraints aren't exactly a problem: Untold pleasures will await every sacrificial incumbent in paradise, or at any rate the coming liberal utopia.
What's the end game here? President Obama gave it away in his student-loan "reform" proposals: If you choose to go into "public service," any college-loan debts will be forgiven after 10 years.
Because "public service" is more noble than the selfish, money-grubbing private sector. C'mon, everybody knows that. So we need to encourage more people to go into "public service."
In the past 60 years, the size of America's state and local workforce has increased five times faster than the general population. But the president says it's still not enough: We have to incentivize even further the diversion of our human capital into the government machine.
Like most lifelong politicians, Barack Obama has never created, manufactured or marketed any product other than himself. So, quite reasonably, he sees government dependency as the natural order of things.
And in his college-loan plan he's explicitly telling you: If you start a business, invent something, provide a service, you're a schmuck and a loser. In the America he's building, you'll be working 24/7 till you drop dead to fund an ever-swollen bureaucracy that takes six weeks off a year and retires at 53 on a pension you could never dream of. Obama's proposals are bold only insofar as few men would offer such a transparent guarantee of disaster: It's the audacity of hopelessness...
Jesus Christ. If I ran my family's financial matters like Obama does the US's, my wife would file for divorce. I am NOT KIDDING.