Skip to comments.Obama's "End of Austerity" Budget Is Incoherent
Posted on 02/22/2014 4:25:42 AM PST by Kaslin
President Obama's legally-required but constantly-delayed official budget request to Congress will be on Capitol Hill soon. The Washington Post reports that "Obama will call for an end to the era of austerity that has dogged much of his presidency." There is much wrong with this worldview.
The only coherent way in which "austerity" has defined much of President Obama's presidency is one in which America faced a once-in-a-generation economic crisis that President Obama himself responded to by massively ramping up federal spending over the course of his first few years in office. That increase in federal spending was combined with below-average tax revenue to create massive budget deficits that everyone, including President Obama, agreed were a problem.
In accordance with the general principles of Keynesian economics, Barack Obama enacted policies that cut the deficit as we continue to climb back out of the 2008 recession. Now, though, President Obama thinks the deficit is no longer a problem - so it's time to increase it.
If I were a self-absorbed "fact checker" I'd rate this claim half-true. We've largely tamed the medium-term deficit through a mixture of tax hikes and spending cuts. Taming the deficit doesn't mean that it won't be a problem in the future - and indeed, the Congressional Budget Office's newest reports confirm that the deficit should still rate highly on the problems that policymakers should be looking to solve.
The CBO's long-term budget report finds that the deficit will dip in 2014 and 2015 but then will start rising - and will never stop due to our increasing health and retirement obligations. The CBO reports on why that's bad:
In the past few years, debt held by the public has been significantly greater relative to GDP than at any time since just after World War II, and under current law it will continue to be quite high by historical standards during the next decade. With debt so large, federal spending on interest payments will increase substantially as interest rates rise to more typical levels. Moreover, because federal borrowing generally reduces national saving, the capital stock and wages will be smaller than if debt was lower. In addition, lawmakers would have less flexibility than they otherwise would to use tax and spending policies to respond to unanticipated challenges. Finally, such a large debt poses a greater risk of precipitating a fiscal crisis, during which investors would lose so much confidence in the governments ability to manage its budget that the government would be unable to borrow at affordable rates.
It's absurd that anyone would need to have a refresher on this, but apparently it's needed: more debt is worse than less debt!
The CBO also confirms what has become even more apparent in the wake of Obamacare: the federal government is becoming less of a traditional government and more of a social insurance state, as more and more spending will go toward health and retirement entitlements, as well as the mere cost of servicing debt:
As Jonathan Chait points out, as a practical political reality, fighting the rise of our retirement obligations has about a ten-year lag time. It's impractical to change the structure of retirement benefits - both Social Security and Medicare - for current and near-future beneficiaries. We need to get started on reforms now.
President Obama may want to put an end to the "era of austerity," but it's an era that he explicitly pushed for through his rhetoric, his desire for tax hikes and his compromises on spending cuts. The medium-term deficit might be under control, but that doesn't mean fighting future deficits should no longer be a priority for policymakers.
Everything the Tyrant-by-Fraud has said ... has been
proven a lie.
IT will no matter. The universally hated, EXEMPT Congress
will love their Moslem master for it.
Of course its iincoherent. Its designed to bankrupt and destroy our nation beyond repair by an enemy combatant working from the inside - our 44th president.
“End of Austerity”? LOL. Calling the fiscal policies of Zero’s administration a period of “austerity” is about as Orwellian as it gets. What’s next, the government will state that, up is down, left is right, light is dark, water is not wet.
And they are actively working to remove the right wing’s ability to notify the public of their misdeeds by killing the news reporting mechanisms in place
If his purple lips are moving, he’s lying. Anyone who has spent more than 9 trillion dollars in five years is crazy if he thinks that’s “austerity.”
Austerity will be what our children’s children and grandchildren will suffer because this nation has gone over the debt cliff during Democrat rule.
The next time that lying twit makes a speech, the response from the right needs to be a combination of a vocabulary lesson and a graphic presentation of how much debt has been accumulated since 2000. (ala Ross Perot).
The author lies... we have 18 TRILLION DOLLAR OF DEBT... 145 Trillion in unfunded liabilities in the next 20 years. Their debt reduction is nothing more than kiting checks and bouncing from one credit card to another. If you believe there is no inflation, that energy prices are low, that we are at 6.6% unemployment and that we are in a robust economic recovery... then you are dumb enough to believe this horse poop (not you personally but figuratively).
Watch out, it’s a trick. A way for BO to help the Democrats win midterm elections.
He knows he’s unpopular because of BOcare. So he suggests this ridiculous budget so the Democrats can vote against it thus impressing the low info voter.
The Barack Obama fiscal hawk talking point lie has been floating around for a while. Looks like the Dems and the DSM (Democratic State Media) are going to run with it for the midterms.
Stuff like this is where the undocumented Democrats in the GOP do great harm to the GOP message. Instead of shooting down this kind of dribble they greatly diffuse the GOP response to this BS. That’s all the Dems need to get the lie to work and confuse the low info voters.
War is peace,
Freedom is slavery,
Ignorance is strength,
Debt is wealth
The end of austerity as we know it. Welcome to a new kind of austerity never seen in this country before.
Incoherent? It means he wants big money with taxes raised now and he’s got the pen and phone to do it.
Well he’s only got 3 more years to finish off America.
It was a typo, instead of “end of austerity” he meant to say “end of America”.
You and your parents are all a bunch of slow boiled frogs. Even those of us who have been sounding the alarm have only been picking at the tip of the iceberg.
Western Civilization is doomed. The “Global” civilization that has been replacing the West is just as doomed — it is parasitic to the West. Class stratification, genes, culture, and appreciation of history are all critical to the West’s survival, and are all gone.
The end is inevitable, and close.
After the “recovery”, the world economy will resemble that of Haiti, the gene pool will resemble that of Haiti. The culture will resemble that of Haiti.
The Earth will never recover.