President Obama, directly addressing a critical issue, has promised to reduce budget deficit to $650 billion by 2013. To get that promise, I have to parse through a few of his statements, like his evaluation that the government was running a $1.3 trillion deficit when he took office, and “Today I’m pledging to cut the deficit we inherited by half by the end of my first term in office.”
Now, given that he’s just signed into law a stimulus bill with $787 billion of new deficit spending, that’s going to put the budget deficit at more than $2 trillion this year. That’s not to say that dramatic progress reversing deficit spending is impossible. Bill Clinton did it. And so did George W. Bush, after re-plunging the government into deficit spending in the first place.
But as for Obama, I’ll believe in his commitment to deficit reduction and fiscal responsibility when I see it in action, and there isn’t the slightest bit of evidence to support his budget-hawk credentials. He has as much credibility with me on the subject of fiscal responsibility that Paris Hilton would enjoy at an abstinence-only sex education seminar.
Go ahead and click on that second link I provided, it’s a very interesting graph. All figures are in nominal, not adjusted, dollars. While you’re at it, check out this graph also, illustrating the difference between annual deficit spending and the annual increase in the public debt under the Bush Administration. You’ll notice that while the public debt increases more than the deficit each year,* even under our immediate past President, the biggest spendthrift to ever hold the Oval Office and yes that includes Ronald Reagan, not only has the on-budget deficit never been at $650 billion a year, only in 2008 did the national debt ever increase by that much.
So Obama’s promise to return to fiscal responsibility by the last year of his term is kind of an empty one. If we take him at his word that the stimulus package(s?) of 2009 is intended to be a one-time shot in the arm for the ailing economy, then we would expect that after a one-year spike in the deficit, things would return more or less to how things had been before the stimulus. Raise your hand if you really believed that was ever in the cards. If you raised your hand, chances are very good that you voted for Obama, in which case I have a short question to challenge your belief — how did you think health care reform was going to be paid for, with a national bake sale?
Interest payments on the Federal debt alone already exceed the combined budgets of the entire Federal Department of Education and NASA. If you like those governmental programs, then think of how much more money could be going to them if we didn’t have this huge monkey of debt on our collective backs.
Let’s put it in, say, Dilbert terms. Wally the Engineer’s project budget for 2004 was $5,000. But he managed to spend $7,500, exceeding his budget by a factor of 50%. So the next year, Wally got allocated $7,500, and spent $10,000, again exceeding his budget by $2,500. In 2006, he exceeded his budget by $5,000. In 2007, he again exceeded it by $5,000. Then, in 2008, something awful happened and he had to exceed his budget by $13,000. So after asking for and receiving an emergency allocation of another $5,000 to supplement his project budget in 2009, before actually turning in a budget plan for that year, Wally promises the pointy-haired boss that by 2013, he’ll make sure that he doesn’t exceed his budget by anything more than $6,500.
The pointy-haired boss would not be impressed with Wally, and neither should you be impressed with this promise by President Obama.
* The public debt increases more than the budget deficit because of “off-budget” deficit spending on funded entitlement programs like Social Security. Social Security is one of several programs that were, until recently, considered “off-budget” because Congress claimed to not have discretion to alter their funding mandates and Congress and the President agreed, for political reasons, to not include these programs in overall budget figures.