Tuesday, March 10, 2009

Obama's Spending In Perspective

[Note: I haven't been blogging as much I'd like to recently; I've been really busy and simply haven't had the time. I know that in blogging, it's important to post new stuff regularly, but that hasn't been happening recently. Still, I think I'll soldier on-even if my posting isn't as regular as I'd like, well, it's about quality over quanity anyway. And try to bear with me--hopefully, I'll find more time for blogging. But I haven't forgotten everyone who reads this--life has just been getting in the way.]

Barack Obama has been taking a lot of heat for his extravagant spending habits, and with good reason. His stimulus package was massive—nearly a trillion dollars—and even liberal economists allow that it may have not been worth it, as it is both too small and the spending too protracted to achieve its goals. (And, of course, there is the additional consideration that it provided billions in funding for wasteful pork projects). And today, Congress approved a massive $410 billion omnibus bill, which seems to have been passed solely to provide more funds for pork. (In an inspiring exhibition of that responsibility and conscientiousness that has become a hallmark of the Republican party, Senate Minority leader Mitch McConnell managed to pull down an impressive $76 million dollars worth of pork for his home state of Kentucky.) And the projected deficit for this year is an astonishing 1.8 trillion, which increases the national debt by nearly twenty percent.

And Obama doesn’t seem to be done with his spending plans. He sees an increased government role in health care, which would be very expensive, and proposes a carbon tax-and-trade plan, which would hurt business a great deal. So Obama has hardly been fiscally responsible.

But while Obama’s fiscal skills may be horribly irresponsible, his skills, or lack of them, may not really matter much in the long run. Obama sees our current financial crisis as being so dire that deficits are irrelevant, and he may be right, on the principle that one might as well be hanged for a sheep as a lamb. Because the United States is in a very bad fiscal position, and nothing Obama does can really make things much worse.

First, consider the national debt. The national debt is about ten trillion now (about twelve trillion by the end of this year), an almost unimaginably large number. To put that number in perspective, the entire federal budget last year was about three trillion, the nation’s GDP was about thirteen trillion. Were the federal government to keep its current spending levels, but to spend money only on the national debt, it would take over three years to pay it off. And given that the federal government can’t even balance the budget, it doesn’t look like it will start paying off the national debt soon.

And what happens when you can’t pay off your debts? See Fannie Mae. Except nothing can bail out the federal government.

Even if the national debt were to disappear tomorrow, America still wouldn’t be out of the fiscal woods. Because it owes trillions in future obligations, obligations that will be almost impossible to pay.

In the next half century, the United States owes about $60 trillion, for Social Security payments, Medicare payments, and the like. That’s a little over a trillion dollars a year (and that number will only increase), over and above what it would spend already. It’s hard enough to see how it will afford those payments—but Social Security and Medicare (and the rest of the New Deal and Great Society programs) are perpetual—they won’t stop. So even if the U.S. somehow gets through the next fifty years, those obligations won’t go away—it will only be replaced by an even greater crushing weight of debt.

So does fiscal responsibility matter? Yes, because it’s no good making a bad situation worse. But really, Obama’s spending won’t matter so much over the long run—the nation faces much larger budget problems than Obama’s contributions. And sadly, it is hard to see a plausible solution to the problem, especially given that America almost certainly faces at least four more years of a Democratic government.

11 Comments:

At March 11, 2009 at 5:02 AM , Blogger David#999 said...

It's a lot more than his " extravagant spending habits" The job of the Pres. of the United States is to be protecting the country and insuring the prosperous conduct of capitalism.
Not what Zero has been doing. Not he seizure of power like Obama has been doing. Along with the likes of Pelosi,Kennedy, Schummer, Dodd and Reid!

 
At March 11, 2009 at 8:30 AM , Blogger Sandy said...

As a fiscal conservative I have been shocked at the abuse President Bush 43 did to our federal budget. He overspent in areas that would never be considered in the defense of the nation. It brought on the collapse of the economy along with the melt down of the mortgage holders. Bush 43 opened the door to socialism to keep the American workers in jobs. Our economy is too far gone to return to even a small resemblence to capitalism.

The American people trashed Senator Goldwater in 1964 and saw H. Ross Perot get defeated in 1992. We have no one left who can turn this nation around. I wrote in Ron Paul's name last November as he was the last one who could have kept us out of socialism.

 
At March 11, 2009 at 9:09 AM , Blogger Name: Soapboxgod said...

"I wrote in Ron Paul's name last November as he was the last one who could have kept us out of socialism."

As much as I agree with Ron Paul on a whole host of issues, I must say that his practice of inserting earmarks into bills that he subsequently votes against is nothing short of an attempt to "Eat your cake and have it too."

He should forego the practice.

 
At March 11, 2009 at 12:19 PM , Blogger Beth said...

Maybe you need another break from blogging my friend, you seem to have a great need of being apologetic of the Obama administration. When his actions go against conservatism, why don't you think you should point out how the conservative approach would be better than his liberal ones?

 
At March 11, 2009 at 3:15 PM , Anonymous Steve_b said...

David-
I agree with you from a mathematical point of view. However for me, the issue is much deeper than that.

By passing these huge spending bills we are creating a culture that depends on the government to "bail them out." This to me is the far more dangerous a concept. We as a nation rose to greatness with a reliance on self-sufficiency. Obama is furthering the slide toward European nanny "statedom". That is why we have to fight- even if the math is going to kill us anyway.

 
At March 11, 2009 at 3:41 PM , Anonymous Anonymous said...

Do you remember these words? “I came here to change politics as usual. Because what’s missing from politics as usual is hope."
Anyone that truly believed that was sleeping.....it's time to wake up!!
He's a democrat . What did you expect? Limbaugh had it right

 
At March 12, 2009 at 9:29 AM , Blogger Daniel Ruwe said...

I don't think I've been too easy on Obama. And this issue (ignoring the financial hole we're in) has always been important to me--I wrote about it before Obama was president.

 
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