“Budget Honesty”

We have tilled this ground plenty of times on this blog, but it bears occasional re-tilling, as Republicans plant weeds of deception, and especially now that President Obama has released his budget for fiscal year 2013, which Republicans have already attacked as “Debt on Arrival.”

I will post yet again the now-famous chart demonstrating what is driving our ongoing deficits and thus our national debt over the near and mid-term:

This image needs no explanation from me. It’s pretty clear that past policy decisions have ongoing consequences, no matter who sits in the Oval Office.

But I will point out, via Steve Benen and Brian Beutler, an important feature of Obama’s 2013 budget that will likely get overlooked. Benen explains:

Deficit: Obama would use higher taxes on the wealthy, and fewer tax subsidies for oil companies, to help bring down the deficit. Overall, the White House plan would reduce the deficit by about $4 trillion over the next decade, though the White House plan prioritizes economic growth in the short term, and leaves debt reduction for another day.

* Striking a chord for budget honesty: If the White House were more inclined to rely on gimmicks, the deficit figures would look a lot better. Whereas Bush/Cheney consistently chose to ignore the cost of wars, the Medicare “doc fix,” and AMT costs to make it appear they were keeping deficits down, Obama’s team is playing it straight. This matters: “If the Obama White House had budgeted for 2013 and beyond the way Mr. Bush had, its deficit forecast for 2022 would have been $167 billion, or 0.7 percent of the economy. Instead, because White House budget writers are adjusting for such costs, the deficit is forecast to be 2.8 percent of the economy that year, $704 billion.”

That last quote is from the very last paragraph in a New York Times article (“Republicans See Broken Promises and Gimmicks in Obama Budget“) noting the extensive, if false, charges by Republicans against Mr. Obama’s budget.  Now, if the Times was truly a guardian of liberal orthodoxy, perhaps the above paragraph would have at the beginning of such an article, not the end.

Let’s look at part of that quote again:

If the Obama White House had budgeted for 2013 and beyond the way Mr. Bush had, its deficit forecast for 2022 would have been $167 billion, or 0.7 percent of the economy. 

That piece of information should be a starting point for any discussion about Mr. Obama’s budget or about deficit spending comparisons between Bush and Obama, but unfortunately it won’t.

In any case, Mr. Obama’s budget is in line with his mostly centrist philosophy, generally supported by the American people, of requiring those who have benefited most (including rich-beyond-imagination oil companies) to chip in a little more to help pay for needed investments in things like infrastructure and education and job-training and a viable safety net, as well as helping cut the deficit.

While the American people will have the last word, Mr. Obama’s budget philosophy will contrast sharply with that of Republicans, who have fought and will continue to fight with Talibanic fervor to protect the wealthiest Americans from even the slightest increase in taxes, while proposing devastating cuts to social programs that will make life harder for many Americans who already are fighting to overcome past Republican policy decisions.

11 Comments

  1. Sedate Me

     /  February 13, 2012

    It’s amazing what a handful of bad decisions and the power of compound interest can achieve.

    If I was a rat, I’d be grabbing my life preserver.

    Like

    • It is important to remember that a lot of folks couldn’t see a way out of the deficit and debt mess in 1992–which made Ross Perot, who based his candidacy on deficit reduction, a household name. Perhaps because of Perot’s candidacy, policies did change and deficits did improve (as growth improved, of course, which was the most important factor) and surpluses materialized. Then came tax cuts, wars, and so on and here we are again, except much worse because of the looming baby-boom retirement problem.

      It’s also important to remember that the CBO projected in 2001 that the government would generate $5.6 trillion in surpluses in the succeeding ten years (that’s one estimate I found), so these things are not part of an exact science.

      Having said that, if the two parties can’t even agree on the elementary things–like raising revenues that are at a post-war low–then it is hard to see how we can tackle the bigger things like entitlement reform, Medicare being the biggest problem out there. Ultimately, the fault or the solution will involve the American people decisively weighing in on the matter. And even that doesn’t seem possible at the moment. But things can change, as we have seen over the last ten years.

      I’m not one to abandon ship, especially since I can’t swim and there are no other boats around.

      Duane

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      • Sedate Me

         /  February 14, 2012

        Too late. I’m in the water and paddling toward shore as fast as I can.

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        • I will advise you not to get your hopes up when you see a would-be rescue boat coming your way with “GOP” painted on the side. They are there merely to toss you a cement lifebuoy, so the end will, mercifully, come more quickly.

          Like

  2. RDG,

    Since the President removed concern over First Amendment/religious freedom issues, those against all-things-Obama are left with defending an employer or insurance provider the right to deny benefits based solely on subjective morality. Fearful of liberal Big Government replacing for-profit private insurers as primary health-care providers, they appear to have no problem granting corporate bureaucrats the power to decide who is and who isn’t “moral” enough to receive health-care services. Maybe I’m wrong and they do realize the glaring contradiction contained in amendments proposed by Senators Blunt and Rubio. But if the sole reason for opposition is disallowing women access to birth control, then that should be stated in the open, and not shadowed behind bogus constitutional arguments.

    Regarding the budget, I keep in mind that Romney is on board with the Ryan Plan. There’s nothing like eliminating Medicare to offset targeted tax cuts for the country’s wealthiest job creators.

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    • Excellent points all, John.

      Especially:

      …they appear to have no problem granting corporate bureaucrats the power to decide who is and who isn’t “moral” enough to receive health-care services.

      This echoes their lack of outrage over a Santorum- and Religious Right-led big-government forcing women who have been raped to have the rapist’s child.

      And Ryan’s budget, hopefully, will be the political death of many a Republican this fall.

      Duane

      Like

  3. ansonburlingame

     /  February 14, 2012

    To all,

    Having already stated my views, macroscopically, meaning from “10,000 feet” about the Obama budget ($1.33 Trillion and counting), I will not belabor my concerns herein.

    However I will point out on conclusion stated in that blog.

    Liberals have long disdained Reagan’s “trickle down” approach to economic recovery.

    Obama has taken a “trickle up” approach in my view. Inject government money into the lower rungs of society (money which we do not have and thus must borrow) in hopes that it will spread widely across America to enhance our economic recovery.

    I believe both approaches are WRONG for the reasons stated in my blog.

    Anson

    Like

    • Sedate Me

       /  February 14, 2012

      Self promoting on somebody else’s blog? Tacky!

      Like

    • All you are describing with your term “trickle up” is Keynesian economics, something practiced by both parties, but most effectively by the Democrats lately, though not always. Try this, from Richard Nixon’s State of the Union speech in 1971 (David Frum’s piece on Charles Murray brought it to my attention):

      The tide of inflation has turned. The rise in the cost of living, which had been gathering dangerous momentum in the late sixties, was reduced last year. Inflation will be further reduced this year.

      But as we have moved from runaway inflation toward reasonable price stability and at the same time as we have been moving from a wartime economy to a peacetime economy, we have paid a price in increased unemployment.

      We should take no comfort from the fact that the level of unemployment in this transition from a wartime to a peacetime economy is lower than in any peacetime year of the sixties.

      This is not good enough for the man who is unemployed in the seventies. We must do better for workers in peacetime and we will do better.

      To achieve this, I will submit an expansionary budget this year–one that will help stimulate the economy and thereby open up new job opportunities for millions of Americans.

      It will be a full employment budget, a budget designed to be in balance if the economy were operating at its peak potential. By spending as if we were at full employment, we will help to bring about full employment…

      With the stimulus and the discipline of a full employment budget, with the commitment of the independent Federal Reserve System to provide fully for the monetary needs of a growing economy, and with a much greater effort on the part of labor and management to make their wage and price decisions in the light of the national interest and their own self-interest–then for the worker, the farmer, the consumer, for Americans everywhere we shall gain the goal of a new prosperity: more jobs, more income, more profits, without inflation and without war.

      This is a great goal, and one that we can achieve together.

      Imagine a Republican saying that today. Hell, imagine a Democrat saying it.

      Duane

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    • The major difference of trickle up economics and trickle down economics is that money given to “the lower rungs” will be put back into the economy for sure. A poor person will HAVE to spend whatever they have. Give money to a wealthy person, and he MIGHT put it into the economy, or he might save it.

      By the way AB, you state that we can’t afford to give breaks to the lower rung. Are you saying that we can afford to give breaks to the wealthy?

      Kabe

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  4. ansonburlingame

     /  February 15, 2012

    Not at all Kabe,

    Government, limited government should not give “breaks” to anyone using borrowed money is my point. Not today with our debt, which as you know, I believe will undermine America has we have known it for centuries now.

    But Duane provides an interesting Republican perspective from 40 or so years ago on this matter. But I would suggest that it (Nixon’s words) simply perpetuated the idea of borrowing money, in those days for both warfare and “welfare” (entitlements and government stimulous being included under “welfare”)

    As well I also agree with Duane that Nixon’s words supported, back then, basic Keynasian economics. BUT, I also point out the real Debt to GDP ratio “back then” and today. I should capitalize REAL in such a case. Today, despite Duane’s graphs showing our current Debt to GDP in the range of 60-70% I use the government’s own numbers for DEBT (not net worth) and GDP showing it at about 120%, an unsustainable number.

    Liberals and in particular, Obama, want, demand, to drive the number even higher over the coming years, ten years at least, as far as budget predicitions usually take us. Nixon was NOT confronted with that issue.

    But today it is right in our faces, collectively. And politically we cannot do anything about it. But as I have said many times before, basic economic laws will do it for or to us.

    According to Duane and “most economists” some deficit spending, seeminly forever, is “OK”. I strongly disagree, today. Deficits continuing ‘forever” means no limits “forever” on debt using some pretty simple math.

    You CANNOT reduce debt with deficit spending (borrowing). But you CAN of course make the amount of debt relatively meaningless, for a while through inflation or printing money. Then we can either devalue our currency and take wheelbarrows of money to the grocery story of fall off the “cliff” and not eat.

    Anson

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