Upon releasing his first budget in 2009, Obama promised, “today I’m pledging to cut the deficit we inherited in half by the end of my first term in office. This will not be easy. It will require us to make difficult decisions and face challenges we’ve long neglected. But I refuse to leave our children with a debt that they cannot repay — and that means taking responsibility right now, in this administration, for getting our spending under control.”
Here are some simple facts about the President Obama’s fourth, and hopefully last, budget:
- It raises taxes by $2 for every dollar of spending cut (in other words, 2012 revenues increase by 2.0% of GDP whereas 2012 spending decreases by 1.0% GDP
- It assumes government revenues will average 19.2% of GDP over the next 10 years. The highest 10-year average in American history was 18.9%.
- It assumes that tax revenues will exceed average tax revenues every year for the next 10 years. The average revenue since WWII has been 17.7% of GDP.
- It assumes tax revenues will exceed 20% of GDP by the end of the decade, a feat achieved in only 3 years in all of American history.
- It assumes that economic growth in 2012 will be 2.7%; the Economist predicts growth at just 1.9%.
- It estimates that our national debt will grow by roughly $1 trillion every year for the next decade and exceed $25 trillion in 2021.
- It predicts that mandatory spending and interest on the national debt will exceed the historic average of government revenue 9 years from now.
- It predicts the national debt will hit 105% of GDP by October of this year, up from 70% in 2008. Greece’s economy collapsed when their debt hit 120% of GDP.
Every year, the Obama administration has proposed a trillion-dollar deficit, promising to lower the deficit in the future—but tomorrow never comes. It is clear that the projections in this budget are unrealistic and will lead to unsustainable debt loads within the decade.
Time is running out. We must get our spending under control or our economy will collapse. Fiscal responsibility will only happen with new leadership – leadership that will make cutting spending a priority.