Intermarkets' Privacy Policy
Support


Donate to Ace of Spades HQ!



Recent Entries
Absent Friends
Bandersnatch 2024
GnuBreed 2024
Captain Hate 2023
moon_over_vermont 2023
westminsterdogshow 2023
Ann Wilson(Empire1) 2022
Dave In Texas 2022
Jesse in D.C. 2022
OregonMuse 2022
redc1c4 2021
Tami 2021
Chavez the Hugo 2020
Ibguy 2020
Rickl 2019
Joffen 2014
AoSHQ Writers Group
A site for members of the Horde to post their stories seeking beta readers, editing help, brainstorming, and story ideas. Also to share links to potential publishing outlets, writing help sites, and videos posting tips to get published. Contact OrangeEnt for info:
maildrop62 at proton dot me
Cutting The Cord And Email Security
Moron Meet-Ups





















« Turkish Police Thwart Kinda Half-Assed Conspiracy to Assassinate Obama | Main | I Really Have To Move To Texas »
April 06, 2009

Obama's Looming Budget Catastrophe

Can a nation run a 10-12 percent deficit year after year into the far future?

Obama thinks it can.

I was told there would be no math during this presidency.

The administration’s original proposal, you recall, left a persistent budget deficit of roughly 3 per cent of gross domestic product. This has nothing to do with stimulus: the gap is there 10 years out and beyond, long after the economy is assumed to have experienced a prompt, strong, and sustained recovery. Taking account of newer data, and using slightly less optimistic near-term assumptions, the Congressional Budget Office has already upped that projected deficit to 4 per cent of GDP.

Even before the budget, the country’s underlying fiscal gap, reflecting demographic and other distant pressures on public spending, had been estimated at 8 per cent of GDP. On the administration’s plans, the US economy will prepare to greet that eventual shortfall with a big structural deficit already in place.

But that is not all. One of the most expensive commitments in the budget is healthcare reform. Towards the full cost of this initiative – estimated at $1,200bn (€890bn, £810bn) or higher over 10 years – the budget merely calls for a 10-year “downpayment” of $600bn. So even that 3 per cent full employment deficit (4 per cent, according to the CBO) was a deliberate underestimate.

And still it gets worse. Congress’s new versions of the budget tweak here and there, paying lip service to the need for fiscal control, but taken together point in the direction you might expect, towards even bigger long-term deficits. Both chambers have agreed to scale back spending on future financial bail-outs, and to trim relief for the alternative minimum tax (a parallel tax code originally aimed at the very rich, which is starting to affect middle-class households). These are delusional economies. More will have to be spent on bail-outs before this crisis is over, and it is the closest thing to a political certainty that the ever-encroaching AMT will continue to be pushed back, at the cost of forgone revenue, year by year.

Also bear in mind that the budget’s signature spending initiative now looks more likely to pass, whereas its signature revenue-raising initiative looks doomed.

Incidentally, this isn't even Keynesianism. Keynes championed deficit spending during downturns, not permanently.



digg this
posted by Ace at 04:10 PM

| Access Comments




Recent Comments
Bacon Jeff: "Yeah, that was such a monumental decision. Thanks, ..."

Anonosaurus Wrecks, Now With Pumpkin Spice! [/i] [/s] [/b] [/u]: "She sounds mad. Trump War Room @TrumpWarRoom ..."

Jinx the Cat: "Casting off stale fishy sock ..."

Comrade Flounder, Disinformation Demon: "Heh, I graduated from school today. Posted by: ..."

L - If they'll do it with you, they'll do it to you, too : "229 Does Joe have mob ties? Posted by: Northernlu ..."

Mark Andrew Edwards, Vote but also buy ammo: "Yeh I'm two hours north of the Ohio river in India ..."

whig: "But they're kinda doing it already. If you do much ..."

pawn: "Unsurprisingly, I think the Chinese are the leader ..."

whig: "That's actually the next thing in my shooting regi ..."

Puddinhead: "Heh, I graduated from school today. ..."

Drummer for Def Leppard : "What we need to do is put container ships on rails ..."

Comrade Flounder, Disinformation Demon: "December 2019 . . . covid Posted by: Li ..."

Recent Entries
Search


Polls! Polls! Polls!
Frequently Asked Questions
The (Almost) Complete Paul Anka Integrity Kick
Top Top Tens
Greatest Hitjobs

The Ace of Spades HQ Sex-for-Money Skankathon
A D&D Guide to the Democratic Candidates
Margaret Cho: Just Not Funny
More Margaret Cho Abuse
Margaret Cho: Still Not Funny
Iraqi Prisoner Claims He Was Raped... By Woman
Wonkette Announces "Morning Zoo" Format
John Kerry's "Plan" Causes Surrender of Moqtada al-Sadr's Militia
World Muslim Leaders Apologize for Nick Berg's Beheading
Michael Moore Goes on Lunchtime Manhattan Death-Spree
Milestone: Oliver Willis Posts 400th "Fake News Article" Referencing Britney Spears
Liberal Economists Rue a "New Decade of Greed"
Artificial Insouciance: Maureen Dowd's Word Processor Revolts Against Her Numbing Imbecility
Intelligence Officials Eye Blogs for Tips
They Done Found Us Out, Cletus: Intrepid Internet Detective Figures Out Our Master Plan
Shock: Josh Marshall Almost Mentions Sarin Discovery in Iraq
Leather-Clad Biker Freaks Terrorize Australian Town
When Clinton Was President, Torture Was Cool
What Wonkette Means When She Explains What Tina Brown Means
Wonkette's Stand-Up Act
Wankette HQ Gay-Rumors Du Jour
Here's What's Bugging Me: Goose and Slider
My Own Micah Wright Style Confession of Dishonesty
Outraged "Conservatives" React to the FMA
An On-Line Impression of Dennis Miller Having Sex with a Kodiak Bear
The Story the Rightwing Media Refuses to Report!
Our Lunch with David "Glengarry Glen Ross" Mamet
The House of Love: Paul Krugman
A Michael Moore Mystery (TM)
The Dowd-O-Matic!
Liberal Consistency and Other Myths
Kepler's Laws of Liberal Media Bias
John Kerry-- The Splunge! Candidate
"Divisive" Politics & "Attacks on Patriotism" (very long)
The Donkey ("The Raven" parody)
Powered by
Movable Type 2.64