This past weekend, President Obama announced that he wanted to cut the deficit in half by the end of his first term in 2013. You would think that this would make a deficit hawk like me happy. It would–if it werent so misleading.
President Obama says that he wants to cut the $1,300,000,000,000 [$1.3 trillion] deficit that he inherited from President Bush down to a deficit of $533,000,000,000 [$533 billion] by 2013. While this seems like a tough goal that will cut spending, this will actually result in increased spending. The reason for this is simple: the present massive deficit is an aberration from the normal, including hundreds of billions of dollars in spending that was supposed to be one time spending. For example, included in the $1,300,000,000,000 [$1.3 trillion] deficit is the $700,000,000,000 [$700 billion] spent on the bank bailout, the additional billions spent on the bailouts of Bear Stearns and AIG, and last years stimulus plan that sent most Americans a $600 check.
In fact 2008’s deficit was $438,000,000,000 [$438 billion] a massive number, but a number that is dwarfed by the $1,300,000,000,000 [$1.3 trillion] deficit that is to be expected in 2009. The vast majority of this money was supposed to be for one time things. In fact, without adding the increased spending from the “one time items,” the deficit for 2009 looks a lot like the deficit for 2008.
President Obama’s 2013 budget deficit figure still represents an increase of over 21% from 2008’s number. This “cut” looks more like an increase to me.
And Mr. Obama’s own numbers still admit that he will have a deficit of over $1,000,000,000,000 [$1 trillion in both 2010 and 2011]. No numbers were given by his office for 2012’s predictions, but lets give him the benefit of the doubt and assume that 2012’s deficit equals 2013’s deficit of $533,000,000,000 [$533 billion]. This means an increase in the national debt of at least $3,000,000,000,000 [$3 trillion]–equal to $10,000 per American. I think the numbers will be much higher.
More on that later.
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