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Deficit Reality

This article first appeared on Feb 1, 2010.

In case you missed it last week, President Obama became aware that deficits are growing at an astronomical pace during his time in office.  In something of a reprise of his role as Candidate Obama (the quasi-moderate) who waxed metaphorically of how American cannot continue "to spend money that we don’t have as if it is Monopoly money", the now-President announced that his budget would freeze spending.
 
It would freeze spending……..NEXT YEAR!  It would freeze spending…….for about 15% of total government expenditures!  It would freeze spending at current levels after record increases (in some departments as high as 150%).  
 
So, deficits are important and we must get our financial house in order; just so that we can do it after this Election!  
 
Interestingly, in justifying his proposed budget of $3.8T dollars (that would be 3.8 TRILLION dollars) that will represent a planned deficit for 2010 of $1.6T, he claimed that it represents a "small increase" in the deficit of the Bush Administration.  According to the President, America’s budget deficit was $1.3T in 2008 (Bush’s final year) that increased to $1.4T in his first year.  To hear the President’s spin, his deficits are neglible increases. 
 
Here are the facts (that you can find for yourself on DickMorris.com):

  1. The final Bush -deficit- was just under $500B dollars when it was proposed.  Due to actual tax revenues that did not meet expectations by about $100B, the actual deficit was approximately $600B.
  2.  

  3. President Obama conveniently adds the entire $700B of TARP to Bush’s budget even though (a) the Bush Administration only spent about half of those funds (President Obama’s administration was in office and in charge when the final portions of those funds were spent) and (b) about $500B of those funds have already been paid back with interest.  Interestingly, Obama and Democrats spent $300B of the paid back TARP funds on their Stima[Spendu]lus.

    
Net-Net: At the worst, the Bush Administration left a $800B deficit ($500B [estimated] + $100B [actual versus estimate difference] + $200B [un-repaid TARP]).  That is assuming the worst of all budget estimates and assessing all non-collected TARP even though the Bush Administration only gave out half ot it. 
 
In the face of this comparison……

  1. Bush (at worst) left with a deficit of $800B.
  2. Obama’s first year deficit was estimated at $1.1T and (due to lower revenues and higher social spending than expected) it ended closer to $1.4T.
  3. Obama’s second budget (released this week amid talks of "fiscal responsibilty" and "spending freezes") estimates a deficit INCREASE to $1.6T.

 
 
So, if the Obama administration is as wrong about these estimates as they were about last years, America’s $3.8T budget will have a near $2T deficit ($1.6 estimated plus their $.3T under-estimate).  This alleged "fiscally responsible" administration will oversee the historical point when America’s budget runs at a near 50% deficit (aka – expenditures budgeted will be double revenues). 
 
As Dick Morris asks – Where is Joe Wilson (R-SC) when you need him?

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