Sunday, February 22, 2009

Obama to Cut the Deficit

You can believe it because he says so.

On Thursday he plans to send at least a summary of his first budget request to Capitol Hill. The bottom line, said an administration official Saturday, is to halve the federal deficit to $533 billion by the time his first term ends in 2013.
the deficit will be shrunk by scaling back Iraq war spending, ending the temporary tax breaks enacted by the Bush administration for those making $250,000 or more a year, and streamlining government.

Can someone explain how increasing taxes on 2% of the population (call it $200 billion in revenues) and reducing Iraq spending by $55 billion (if costs are reduced by half).

Let’s leave out whether raising taxes on the most productive members of the economy is a good idea during a recession and let’s leave out whether raise taxes actually raises revenues.  That’s really only about $250 billion of deficit reductions per year.  Far less than the over $500 billion necessary to half the deficit.

Now let’s take into account that Obama is wanting to extend Medicare to cover people over 55.

Billions of new funding for government departments and projects.

Billions in interest for the so-called stimulus package.

And those are just the knowns!  How much more money will be sunk into the black hole that is the auto industry?  Will the government continue to throw good money after bad banks?

Can someone explain to me how you end up with a balanced budget in 2013 when the deficit is going to grow in 2009 & 2010 just based on the binge that has taken place in the first month in office?!

My guess is that he doesn’t want to balance the budget – this is just political cover for raising taxes during a recession.

But maybe I’m just skeptical of politicians, because lord knows there isn’t any justification for that.

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