Monday, February 13, 2012

J. Wellington Obama's Official Budget

J. Wellington Wimpy -- better known simply as "Wimpy" -- was Popeye's recurring sidekick in the long-running cartoon series.

And Wimpy had a motto that could just as well be President Obama's:

"I'll gladly pay you Tuesday for a hamburger today"

As Cato explains, Obama's budgets consist of tax hikes now, with spending cuts and accounting gimmicks sometime... in... teh... future.

We’ve become so used to these unfathomable levels of deficits and debt—and to the once-rare concept of trillions of dollars—that we forget how new all this debt is. In 1981, after 190 years of federal spending, the national debt was “only” $1 trillion. Now, just 30 years later, it’s past $15 trillion...

As ATR points out, the "Obama Plan Uses Budget Gimmickry To Mask Explosive Spending":

The budget continues to call for spending at historic levels: the request sets spending for the fiscal year at $3.8 trillion and projects $47 trillion in spending over the next ten years

Holds spending at 23 percent of [GDP] the next ten years, two percent higher than its historical average

Uses totally dishonest accounting: the President claims to include $4 trillion in deficit reduction. These supposed cuts include $1.6 trillion in tax hikes and $900 billion in war spending the President plans to plow back into infrastructure spending

Repeats failed “stimulus” spending: For the third year in a row, the plan looks to create a permanent Infrastructure Bank with $350 billion in new spending. The budget also requests $500 billion for a transportation package while shifting Highway Trust Fund spending to mandatory accounts, ensuring its insolvency for posterity

Continues practice of extending Medicare providers payments without offsetting the $438 billion in spending with cuts elsewhere

The budget only addresses 40 percent of the government spending problem: the President bankrupts the entitlement programs by once again refusing to confront the nation’s largest debt-drivers

Fails to take into account the coming costs of the government takeover of healthcare and financial regulatory overhaul. Instead, the President’s budget claims zero effect for supposed cost-saving mechanisms, such as the implementation of the Obamacare Independent Payment Advisory Board

James Pethokoukis summarizes some of the most important changes for the average worker and small businessman:

• The top income rate [for individuals and most small businesses] would be raised to 39.6 percent vs. 35 percent today... [Ed: well, that should help hiring.]

• Between now the end of a second Obama term, Obama proposes $707 billion in “net deficit reduction proposals.” Of that amount, only 16 percent is spending cuts.

• The capital gains rate would rise to 25.0 percent (including the Obamacare surtax and deduction phase out) from 15 percent today... [Ed: well, that should help investments.]

• The double-tax on corporate profits (including dividends) would increase to 64 percent based on the statutory corporate tax rate (58 percent using the effective tax rate), easily the highest among advanced economies... [Ed: well, that should help hiring.]

...Higher taxes, more spending, more debt, and no long-term entitlement reform plan. Hmm, this isn’t a rosy scenario at all. It’s actually a pretty bleak one.

The problem on Capitol Hill is spending, catastrophic levels of debt and an impending fiscal collapse. And we need another wave of real conservatives -- not RINOs and certainly not Democrats -- to continue turning the tide. Because the feckless John Boehner ain't cutting it.


Anonymous said...

The absolute corruptness of this economic policy has become so evident that anyone with eyes should be able to see it. It will be impossible any longer to stimulate the economy with tax cuts because of the debt. The people with the power to unleash a recovery (the rich) are being emasculated. The Goobermint is on a hiring spree and making dependents of the rest. If Soetoro is re-elected the USA will enter a dark age of servile poverty. Only God will be able to save us, and after sticking Him in the eye, why would He do that?

Bones said...

The leaders, party members and their friends will do just fine when everything goes to hell. Just like the dark ages and other socialist utopias.