01.30.2010 original publish date
03.17.2011 update & attempted to fix broken links.
President Obama’s “Change” Will Cost You $9.3 Trillion+ Interest
original article written by Net Advisor™
President Obama, after recovering from the recent State of the Union Address (SOTU) entered an 82 minute debate session with Republicans who feel that their economic and health care ideas are being ignored. (Source: Reuters)
President Obama stated “I’m not an ideologue.”
An ideologue is defined by Webster’s on-line dictionary as:
“1. an impractical idealist.”
“2. an often blindly partisan advocate or adherent of a particular ideology.”
One of the big concerns Republicans have indicated is the all time record debt increase that the Obama Administration has created, and intends to further create.
Texas Republican Jeb Hensarling stated to President Obama:
“Will that new budget, like your old budget, triple the national debt and continue to take us down the path of increasing the cost of government to almost 25 percent of our economy? That’s the question, Mr. President.”
In response, the President evaded a direct answer, and instead he stated:
“the whole question was structured as a talking point for running a campaign.”
Campaigning or not, it’s a fair question. The facts are that the Democrats are in control under President Obama, and together, they have exceeded 8 years of accumulated debt by President Bush in a matter of just ONE YEAR.
Now the Democratic Congress and the President want to raise that debt even further. The U.S. Senate just recently approved to up the U.S. debt by another $1.9 Trillion and that’s likely to continue higher in years to come (Sources: CNN / Wall Street Journal).
Congressman Hoyer (D), of Maryland said that this move to raise the debt is a “must-pass” in part for “defense spending.” The 2010 Defense Spending bill in TOTAL is $636.3 Billion. This assumes that there was no prior defense budget, and even if it was not included in this current budget, there is still an extra $1.2637 Trillion extra debt in the House bill.
The Math
2010 Defense Bill: $636.3 Billion
2010 House Budget wanting to pass $1.9 Trillion (story link gone, sub video) (Deficit)
Take $1.9 Trillion – $636.3 Billion = $1.2637 Trillion extra, beyond Defense spending, and this is beyond the existing budget, that is why it is called “deficit spending.”
Hoyer, #2 Democrat after Pelosi and a career politician since the age of 27, will be 71 this June, thus serving about 44 years in Congress. Did someone miss the campaign word “Change” in Maryland?
Misleading Congressional Math?
North Carolina’s John M. Spratt, Jr. (D), has been in Congress since 1983. AT date of original publishing, Spratt was Chairman of the House Budget Committee. Let’s examine some Congressional math.
Spratt has a House Budget Committee (HBC) chart that shows the “deficit” declines every year since the “inherited” Bush deficit, which is pointed out with an arrow on the chart.
EDITOR’S NOTE: {The original “HBC chart” has since been moved or deleted. Last known location was here. We archived a copy in Jan 2010, however the PDF did not turn out complete. The chart is dated 04-28-2009, and however the data can still be reasonably interpreted for this article. We replaced the broken chart link in this article with the PDF copy also located here.}
What the House Budget Committee (HBC) Chart Does Not Tell You.
1. That it is off by $667 Billion in 2010 alone. The chart projects a $1.233 Trillion deficit for 2010. The reality is we are now looking at a $1.9 Trillion deficit, just over a 54% increase in the 2009 House projections. [$1.233 Trillion x 54% = $6.6582 Trillion). Actual number: House off by $667 Billion plus the amount of additional planned deficit $1.233 Trillion. Add $1.233 + $667 Billion = $1.9 Trillion = Current estimated 2010 deficit).
Quick questions.
Where are those spending cuts Mr. President?
Where is that “honest accounting” America was “Hoping” for in 2009?
What kind of “Change” are really getting?
02.22.2009:
“Obama vows to cut huge deficit in half“
09.07.2009:
“Senate must raise debt ceiling above $12 Trillion“
01.28.2010:
“Senate OKs debt ceiling hike to $14.3 Trillion“
Cut What in Half Again?
Can you imagine your elected officials managing your money, being off $667 Billion? How can someone be off that much money for just 1 (one) year projections? If Congress is off that much in one year, can we assume that ALL the numbers will be off in future years?
If someone was to ask you to budget your expenses for 1 year, you could take your existing monthly expenses, multiply it by 12 and have some ball-park rational for what you might need next year right? We’ll, not unless it’s government math.
2. The said chart also neglects to tell you that the entire chart is full of DEFICITS. Since about 2008, the American public has tightening their belts and rained in spending like no other time since the Depression, but Congress is spending like it’s planning a party for 1999.
3. Congress KNEW that tax revenues had plunged as the economy tanked by no later than mid 2009. Yes, Congress continued spending money we didn’t have for things that produced what? Certainly not jobs, unemployment went up. Somebody got your tax money and your kid’s future earnings for something, what who knows?
Living in the 1990’s
The Democrats like to live in the 1990’s when the economy was booming not by their doing, but due to the business and the public’s innovation, entrepreneurship that led to the .com, technology and overall Internet boom. It is coincidental that President Clinton was in power at that time, and he came into office as the 1990-91 recession was ending.
Further,
the Democratic Congress will often talk about how under the Clinton Administration there was a small surplus when Clinton left office. What Congress fails to mention is that under President Clinton, we had the highest tax increases in U.S. history
— Source: Heritage.org – Chart from JFK to Bush
According to the non-profit organization, The Heritage Foundation, The economy didn’t really soar until 1997 after a Republican led tax cut, called the Taxpayer Relief Act of 1997. The result of such legislation reduced the top capital gain rate from 28% to 20%, established a $500 tax credit per child, established the Roth IRA, created an exemption from taxes on the same of a primary home and higher education tax credits. The tax cuts were supported by over 80% each by both political parties in House and Senate, and signed by President Clinton (Sources: Heritage.org, Wikipedia.org).
The S&P 500 soared roughly 33% from about mid August 1997 to on or about January 3, 2000. I argue that part of this move was due to building speculation in .com companies.
Where Does the Government’s Money Come From?
Taxes of course and individuals pay most of the tax revenues the government collects each year.
More on social insurance.
The bottom line is Congress can’t seem to get a grip that the U.S. economy is still in recession: Unemployment is still about 10% (as of 12-2009), higher in some key economic states such as CA, (as of 12-2009); where 1 out of 10 America are on food stamps; China is telling us that they want us to reduce our debt spending (Source: Bloomberg) yet, Congress and President Obama are spending money like there is no tomorrow. There is a risk to the U.S. economy and China holding our debt (Source: CRS Government Report). Government needs to get off their Deficit Crack.
Hold on to Your Wallet When You Vote in the Next Election
The Country cannot afford to keep these deficits going perpetually. There is interest on this debt; it’s not just principle we are paying. Whenever the government borrows money, keep in mind that what they are not telling you is that they are not including the future added interest costs on that debt. And interest on currently $12 Trillion (as of this report date) is just a slightly increase in your monthly payment.
Just ONE example:
“The long-term cost of the $825 billion economic recovery package before Congress could rise to $1.2 trillion over 10 years a top budget official said…”
— Source: CNN-Money
It’s time to vote out Congresspersons who have contributed to this problem and who support eternal deficits that harm the U.S. economy. Don’t let government trick you into thinking that ‘Wall Street is the cause to America’s problems.’
The facts are the government has perpetuated the biggest economic problems in history by allowing U.S. deficits to soar unchecked, and the Obama Administration is escalating these deficits like no other time in world history.
“President Obama’s ambitious plans to cut middle-class taxes, overhaul health care and expand access to college would require massive borrowing over the next decade, leaving the nation mired far deeper in debt than the White House previously estimated, congressional budget analysts said…”
— Source: Washington Post
“President Barack Obama’s budget would produce $9.3 trillion in deficits over the next decade, an eye-popping figure that threatens his ambitious goals to overhaul health care and explore new energy sources, congressional auditors said.”
— Source: MS-NBC
Is this the “Change” you voted for? Borrowing more, to devalue the U.S. dollar, higher future inflation, lower your future living standard; raise your future income taxes to pay this debt and contributing the U.S. into some new future economic debt-disaster?
Government needs to stop ideological ‘social control is good for the all, and at all costs,’ and focus first on living within the revenues it receives. You want the economy to soar again? Start paying down the existing debt, not claiming to solve the deficit by adding more to it, then cutting a few billion off that, then adding more to it later on and calling that “freezing government spending.” That model won’t work.
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Additional Updates:
John M. Spratt, Jr. (D – South Carolina) lost his re-election bid in November 2010 (Source: NY Times, PDF – highlight added). Spratt Jr.’s 2010 re-election loss gave way to a new Chairman of the House Budget Committee on January 3, 2011- Paul Ryan (R – Wisconsin).Obama’s Budget Charts (PDF) (Direct PDF Link) (a Reality Check)
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