Here are some things to note about President Obama’s 2012 budget, which was released yesterday. Spending will be a record $3.73 trillion — which constitutes 25.3 percent of GDP, the highest since World War II. The Obama administration’s 2012 budget proposal projects this year’s deficit to reach $1.645 trillion — the largest on record. This is now a record fourth straight trillion-dollar-plus deficit. And for just the years 2011 and 2012, the combined deficits will be roughly $2.7 trillion. Federal debt held by the public will increase to 75 percent of GDP in 2012 — more than double what it was four years ago and the highest figure since the midpoint of the 20th century.
As a reference point, in 2008 the debt held by the public was $5.8 trillion; in 2012, the Obama budget projects it will be $11.881 trillion — and in 2019, it is projected to be $17.3 trillion. In other words, Obama’s own budget shows the debt he inherited will double by next year and triple by 2019.
As for the claim that Obama’s budget cuts $1.1 trillion over 10 years: this figure relies in part on the economy growing between 4 and 4.5 percent between now and 2014. These numbers are inflated to produce imaginary revenues. The president’s budget also assumes that the costs of bailing out Fannie Mae and Freddie Mac will be cut in half, though it doesn’t plausibly explain how.
In addition, two-thirds of the promised deficit reduction would occur in the “out years” (in this case, after 2016). As the Wall Street Journal points out, the Obama budget doesn’t cut a penny from the deficit in the last seven months of fiscal 2011; and over the next three years (through 2013), the spending reductions add up to $20 billion net — which is a 0.57 percent reduction and less than what the federal government spends in two days.
Finally, the five-year spending freeze that Obama proposes comes after an increase in domestic discretionary spending of nearly one-quarter (24 percent) since Obama took office — and more than an 80 percent increase if you include stimulus spending.
“To all those under 30 who worked so hard to get this man elected, know this: he just screwed you over,” one critic of the Obama budget wrote. “He thinks you’re fools. Either the US will go into default because of Obama’s cowardice, or you will be paying far far more for far far less because this president has no courage when it counts. He let you down. On the critical issue of America’s fiscal crisis, he represents no hope and no change. Just the same old Washington politics he once promised to end.”
So says Andrew Sullivan. And he is right.