奥巴马政府在赤字预算上的数字游戏

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Earlier last week the Administration lowered its deficit forecast to the $1.5T range. Why? Because it was not going to spend as much money on the bank bailout. It was going to withhold money it felt was no longer necessary. Less spending is always good and that was the reason for the reduction. No complaints about spending less money. Of course that doesn't mean the money won't be spent elsewhere (read healthcare), but as far as authorized spending, there would be less at least in one area.

Then on Friday, late Friday, the OMB (Office of Management and Budget ) came out with its updated deficit projections that take into account the reduced bank bailout spending. Even better right? You wish. The Deficit projection for 2009 was raised, not from $1.5T, but from $1.7T to $2T. The 10 year projection was raised from -$7T to -$9T. The reason: a slower than expected economy.

Wait a minute. Slower than expected? That spells a lot of trouble. Why? Because the Obama administration projected what were some pretty rosy recovery scenarios based on its $800B boondoggle stimulus. Those projections are not living up to expectations. Surprising? No. Worrisome? Yes, because the administration still has huge spending plans to come.

This projection does not even include, remotely, any of its healthcare change out. The plan is estimated, by the Obama administration, to cost $1T. First, the administration shows it doesn't understand economics as its projections are already significantly off. Second, history shows it is the nature of government programs to cost far in excess of rosy projections.

When passed Medicare was projected to cost $9B in 1990. In reality, Medicare costs that year were $67B. A mere rounding error by a factor of 6. Medicaid when passed in 1987 was supposed to cost $100M per year. Just six years later it required $11B of taxpayer dollars; off by a factor of 11 in less than a decade.

So, does anyone really believe in $1T? Take the average of the two and say the multiplier is 8.5. That adds $8.5T to the 10 year projection and makes the $9T look blissful. At $17.5T the US is pretty much insolvent. Picture a currency worth nothing.

spdn

zan

dara

The only way to solve the deficit is that Fed prints money and borrow to government and not charge interest.

3334440716

ding

coexist

奥巴马政府还有什么更高的招吗?