President Obama has done us all a great favor by putting out a detailed budget proposal. He has laid down an important marker over which the next campaign will be fought.
The president’s budget has been derided as political, but so what? All budgets are political in the sense that they set out what we value and our vision for the future. The president’s specificity ensures that we can’t claim to be surprised if he gets re-elected and goes through with it.
In brief, Obama proposes 10 years of staying the course. His budget would continue the tax, spend and borrow option for America. There is no hint of remorse nor any sense that some course correction might be in order.
Quick side note: This business of proposing 10-year budgets is a bad idea. It gives the impression that the president can continue to influence events once he leaves office, which of course is not true. The more distant years are always projected to have robust economic growth and low interest rates on the national debt, which excuses more spending and debt accumulation during the years the president is actually in power. Clever but fundamentally deceptive.
Obama’s budget would accelerate the current spree by spending an astonishing $47 trillion over the next 10 years. The size of the federal government would grow by 53 percent. That comes on top of a whopping 27 percent increase from 2008 (2.98 trillion) to 2013 (3.80 trillion proposed). That in turn follows a large run-up under his predecessor, George W. Bush. No wonder we’re in trouble.
This spending binge would be covered by a combination of higher taxes and yet more debt. The president proposes raising taxes by $1.9 trillion on American families and job creators. Revenue would come from income taxes, death tax increases, energy taxes and others.
Meanwhile tax credits would still be available for the well-connected. Subsidies for renewable energy, alt-fuel vehicles, “new manufacturing communities” and other Solyndra-type boondoggles would continue to flow. There would be $4.7 billion for “strengthening the teaching profession,” even though the General Accounting Office last year counted 82 duplicative “teacher quality programs.”
The president’s budget projects the national debt to be $26 trillion in 2022, which will require “only” $850 billion in interest payments. Of course, it’s historically unlikely that interest rates will still be in the 3 percent range, in which case debt service could easily be twice that.
It’s also unlikely that Obama’s folks will get a debt projection right. For example, Obama’s first budget projected a federal deficit of $557.4 billion by 2012. The White House now says this year’s actual number will be around $1.33 trillion. Whoops. That’s a 138 percent error, not close even by government standards. That wouldn’t happen again, would it?
What’s missing in this budget? Entitlement reform, the medicine that serious Americans know must be taken sooner or later. Obama hopes to buy four more years of the super-luxurious White House lifestyle by telling people what they want to hear, that they can stay in Fantasyland yet a while longer.
It’s unclear how Barack Obama claims to believe that more of his present policies will bring future results totally unlike what we have seen so far. The rate of new business start-ups has fallen to the lowest level since 1994. The real unemployment rate, which includes the under-employed and those who have given up looking, stands at 15.2 percent. A record 15 percent of all Americans are now on food stamps and nearly half of all Americans are classified as poor or low-income. All this is after we’ve spent trillions and plunged dangerously into debt in order to stimulate the economy.
The alternatives to the already failed tax-and-spend plan to regain prosperity are measures to restore economic growth through tax and regulatory reform and structural changes in our entitlements. You’ll see those in this campaign too. The contrast with the Obama budget couldn’t be more striking.
You can see why the 2012 election is considered the most critical in a lifetime. The America of the future will look very different depending on how wisely we choose today.