Obama’s Deficit

Posted By Elgin Hushbeck

Obama has announced his budget for 2011 and he is proposing to spend $3.83 Trillion.  To many this is a meaningless number, but to put this in some sort of context consider that the 2008 budget was a mere $2.9 Trillion.  The intervening years had TARP and the bailouts, but those are over. This budget reflects the new base level of spending. Yet at $3.83 Trillion, this represents a 32% increase in just 3 years.  This is not just an increase in spending, this is an explosion, and one guaranteed to reduce people’s standards of living. There is simply no way that the economy could ever catch up with such an huge increase for this is the new baseline from which government will grow even further. As such it marks a permanent decrease in people’s standard of living, or at least those not lucky enough to have government jobs.

This will be paid for with a record $1.56 Trillion deficit, which in and of itself should be a cause of great concern.  Just a few short years ago Democrats were warning us of the dangers of deficits 1/10 this size.  One could have a serious debate over whether the government could safely handled the pre-Obama level deficits, but not deficits at these levels, which risk currency collapse and hyper-inflation. 

So while people are struggling, the best case scenario is that they will have to tighten their belts even more so government can live large at our expense.  As for the worst case, well, let’s hope it is only the best case…

Feb 2nd, 2010

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