Free Republic

A few months after moving into the White House, President Obama promised to reduce the large deficit in 2010 and continue reducing it further in 2011. This promise was broken, and the deficit in 2010 is expected to be approximately $200 billion more than in 2009. This creates political danger for Democrats, as the party in power is reluctant to acknowledge its stewardship of worsening budget problems with midterm elections coming in November. As a result, congressional Democrats are shying away from a vote on this year's budget resolution, causing chaos to the federal budgeting process. Avoiding a budget resolution...

The first warning was in mid February, the bad news was that led by China, foreign countries dumped U.S. Treasury bills at a record rate in December. The worry was that the weak marketplace lead to a rise in interest rates to make the bills more attractive to investors. The interest rate rise which could be the beginning of an inflationary period. According to the Treasury Department foreign holdings of U.S. Treasury bills fell by a record $53 billion in December. That topped the previous record drop of $44.5 billion in April 2009. In the intervening six weeks since the...

While the global economy is crawling out from the most severe recession and financial crisis of the postwar period, the euro zone debt crisis has significantly increased the chances of a double-dip recession in Europe and a global slowdown. Sovereign risk has recently graduated from being an emerging economy hitch to an advanced economy problem. The Greek debt crisis has occupied center stage of the economic and political debate. It is not just a Greek tragedy--the contagion could spread to Portugal, Spain, Italy and Ireland. Indeed, at stake is the entire euro zone framework. Yet fiscal sustainability and sovereign risk...

The bursting of the real estate bubble and the ensuing recession have hurt jobs, home prices and now Social Security. This year, the system will pay out more in benefits than it receives in payroll taxes, an important threshold it was not expected to cross until at least 2016, according to the Congressional Budget Office. Stephen C. Goss, chief actuary of the Social Security Administration, said that while the Congressional projection would probably be borne out, the change would have no effect on benefits in 2010 and retirees would keep receiving their checks as usual. The problem, he said, is...

Democrats have so thoroughly gamed the budget process and the Congressional Budget Office’s scoring rules that the official cost estimates of the Obama health plan reveal but a sliver of the legislation’s full cost. The Obama plan would vastly increase the size and scope of the federal government, and increase our already record federal deficit. To hear Democrats tell it, the CBO projects the legislation would cost a mere $940 billion over the next 10 years. The CBO said no such thing: that figure pertains only to provisions aimed at expanding health insurance. Other spending provisions bring the cost to...

Responding to an inquiry from Rep. Paul Ryan, the Congressional Budget Office has confirmed that when you remove certain accounting gimmicks from the Democrats' health care legislation, it actually increases the deficit. Democrats have touted a CBO report that found that their health care bill would reduce the deficit by $138 billion from 2010 to 2019. But that number assumes that hundreds of billions of dollars in Medicare cuts would be used to pay for the new health care entitlement. In a letter to Ryan, the CBO estimates that if the Medicare cuts were used to help shore up the...

February 2009 produced the largest monthly budget deficit in the United States government's history. The U.S. Treasury announced that February's budget deficit came in at a staggering $220.9 billion. The addition of February's record monthly deficit results in a deficit of $655 billion for the first five months of fiscal 2010...

AP's Andrew Taylor hits the media cyberwaves with the news that today's CBO analysis of Obama's 2011 budget plans would generate deficits totalling $9.8 trillion over the next decade.... $1.2 trillion more than predicted. But just as Harry Reid sluffed off a job loss of 36K last month as "a big day in America" Taylor also attempts to soften the blow. The agency says its future-year predictions of tax revenues are more pessimistic than the administration's. That's because CBO projects slightly slower economic growth than the White House. The deficit picture has turned alarmingly worse since the recession that started...

President Obama's decision to appoint his close political ally, union leader Andrew Stern, to the newly created National Commission on Fiscal Responsibility and Reform has set off a firestorm of criticism from business and conservative groups who charge he is a political radical who should be investigated for failure to register as a lobbyist. President Obama's decision to appoint his close political ally, union leader Andrew Stern, to the newly created National Commission on Fiscal Responsibility and Reform has set off a firestorm of criticism from business and conservative groups who charge he is a political radical who should be...

President Obama's proposed budget would add more than $9.7 trillion to the national debt over the next decade, congressional budget analysts said Friday. Proposed tax cuts for the middle class account for nearly a third of that shortfall. The 10-year outlook released by the nonpartisan Congressional Budget Office is somewhat gloomier than White House projections, which found that Obama's budget request would produce deficits that would add about $8.5 trillion to the national debt by 2020. The CBO and the White House are in relative agreement about the short-term budget picture, with both predicting a deficit of about $1.5 trillion...

The federal deficit would hit $1.5 trillion in 2010 under President Barack Obama's proposals, the Congressional Budget Office (CBO) projected Friday. The nonpartisan budget office said it projected a deficit measuring 10.3 percent of gross domestic product (GDP) this year, and a $1.3 trillion deficit in 2011 that would measure 8.9 percent of next year's GDP.

President Barack Obama's budget will lead to deficits averaging nearly $1 trillion over the next decade, the CBO estimated Friday. The Congressional Budget Office (CBO) said President Barack Obama's budget would lead to annual deficits averaging nearly $1 trillion for the next decade. The estimates are for larger deficits than the budget shortfalls expected by the White House. Annual deficits under Obama’s budget plan would be about $976 billion from 2011 through 2020, according to a CBO analysis of Obama's plan released Friday.

In January, the Senate joined the House in passing "pay-as-you-go" rules to require Congress to pay for new discretionary spending. On Feb. 12, President Obama signed the bill. "Now Congress will have to pay for what it spends, just like everybody else," Obama crowed. Less than a month later, Obama and fellow Democrats are busily demonizing a lone senator for pushing Washington to spend responsibly. It seems this administration is all for fiscal restraint — as long as you don't mean it. The story began last week when Sen. Jim Bunning, R-Ky., blocked Senate passage of a bill to extend...

WASHINGTON – To the increasing discomfort of his fellow Republicans, Sen. Jim Bunning on Tuesday again blocked the Senate from extending unemployment benefits and health insurance subsidies for the jobless. The Kentucky Republican objected to a request by Maine Sen. Susan Collins, a fellow Republican, to pass a 30-day extension of jobless benefits and other expired measures. The measure would also extend highway programs and prevent a big cut in Medicare payments to doctors. Bunning has been single-handedly blocking the stopgap legislation since Thursday... ----- Bunning made the following quotes on the floor of the United States Senate: "I believe...

An alternative budget proposal submitted by Congressman Paul Ryan (Wis.), the House Budget Committee's Republican ranking member, would increase the federal budget deficit even more than President Obama's bloated budget — nearly $1 trillion more — according to a February 24 analysis by the Congressional Budget Office (CBO). Ryan's “alternative policy scenario” would make no serious spending cuts, but it would institute three new tax cuts. CBO Director Douglas Elmendorf explained to Ryan that “the three changes to the tax policy assumptions are estimated to increase deficits relative to the baseline projections by $9 billion in 2010 and $3.4 trillion...

From The Sunday Times February 21, 2010 Angry voters will force action on runaway deficit Irwin Stelzer: American Account So all is coming right. Sales of existing homes in the final quarter of last year were 27.2% above the 2008 level. Home construction jumped 2.8% in January, to its highest level in six months. The mining, manufacturing and utilities sectors also grew at satisfactory rates as did retail sales. So confident is the Federal Reserve in the recovery that it has raised a key interest rate. Alas, every silver lining has a cloud — in the case of the American...

In his State of the Union address, President Barack Obama said that "families across the country are tightening their belts and making tough decisions," so the "federal government should do the same." The following week, the president presented his new budget, which contains $1.267 trillion in new deficit spending. So much for cinching up the belt. Elsewhere in his address, the president said, "Let me start the discussion of government spending by setting the record straight." But, in his subsequent words, he barely even mentioned his own deficit spending. This, of course, will not do. If we are to set...

If the tea party movement is the soul of small government and personal responsibility, the Republican Party is the institutional body conservatives need to regain control over government run amok. You can't have one without the other, says Bill Whittle. The transcript of this video essay is below. IMHO: video is better - Bill Whittle's presentation is characteristically passionate; and his passion is contagious. Well, the Tea party movement is not even a year old, and already it is holding its first national convention. I was honored to be asked to speak at the West Los Angeles event on September...

Left-wing economist, Nobel laureate and New York Times columnist Paul Krugman hates deficits in tough economic times -- when the president of the United States is named George W. Bush. Krugman, in a November 2004 interview, criticized the "enormous" Bush deficit. "We have a world-class budget deficit," he said, "not just as in absolute terms, of course -- it's the biggest budget deficit in the history of the world -- but it's a budget deficit that, as a share of GDP, is right up there." The numbers? The deficit in fiscal year 2004 -- $413 billion, 3.5 percent of the...

Unveiling his latest budget proposal, President Barack Obama announced: “The bottom line is this: We simply cannot continue to spend as if deficits don’t have consequences; as if waste doesn’t matter; as if the hard-earned tax dollars of the American people can be treated like Monopoly money; as if we can ignore this challenge for another generation.” Unfortunately, few in Washington are listening -- including the president himself. His budget would boost spending to $3.8 trillion in the next fiscal year. It would generate a $1.5 trillion deficit for next year alone, on top of the trillions American taxpayers already...

New York Times columnist Paul Krugman played media critic on Friday, asserting that the media have gone from sensible to sensationalistic on the long-term federal budget deficit forecasts. The most notable part came when he insisted that the media’s presentation of a deficit threat is a lot like the threat of Iraqi weapons of mass destruction (and will be just as damaging). Isn't this a little odd in an article titled "Fiscal Scare Tactics"? Or was Krugman being self-referential? And is this a great analogy, since the Iraqi WMD ended up missing, and the trillion-dollar deficits have hardly vanished? Krugman...

The tsunami of spending this last year is only going to get worse. Obama recently announced a proposed budget request of $3.8 Trillion that was sent to Congress for the fiscal year that begins on October first. His budget forecasts a deficit of roughly $1.6 trillion. Obama says he plans to slash it in half by 2014 through a combination of tax increases on wealthy Americans, and cuts in domestic programs. There was a 700% increase in spending in Obama's first year. In the next ten years, Obama will be spending 44 times the previous 10 years: Who knows what...

U.S. President Barack Obama has sent a $3.8 trillion budget request to Congress for the fiscal year that begins on October first. It is the first step in what is expected to be a long, contentious budget process. President Obama is walking a fine line in his 2011 budget. He is seeking $100 billion to tackle unemployment, while moving to trim the federal budget deficit. "It is time to hold Washington to the same standard families and businesses hold themselves. It is time to save what we can and what we must and live within our means once again," he...

The federal budget deficit has long since graduated from nuisance to headache to pressing national concern. Now, however, it has become so large and persistent that it is time to start thinking of it as something else entirely: a national-security threat. The budget plan released Monday by the Obama administration illustrates why this escalation is warranted. The numbers are mind-numbing: a $1.6 trillion deficit this year, $1.3 trillion next year, $8.5 trillion for the next 10 years combined—and that assumes Congress enacts Obama's proposals to start bringing it down, and that the proposals work. ...it's time to start thinking of...

Investing in Zimbabwean dollars suddenly sounds sane compared to buying U.S. bonds. ... Nero should have been as thorough. History has witnessed numerous despots fiddle while empires burnt. Barack Obama, aided by a legislature filled with Caligula’s elected descendants, is moving America steadily in the direction of the Zimbabwean empire. The parallels between Obama and Zimbabwe’s loco dictator Robert Mugabe stop only at their body mass index ... ... Now Barack is ready to spend even more. (Note to the graduating class of 2010: RUN! Barak’s bill has your name on it.) ... Before Mugabe gave in, a Zimbabwean $100...

President Barack Obama unveiled a multitrillion-dollar spending plan Monday, pledging an intensified effort to combat high unemployment and asking Congress to quickly approve new job-creation efforts that would boost the deficit to a record-breaking $1.56 trillion. Obama's new budget blueprint preaches the need to make tough choices to restrain runaway deficits, but not before attacking what the administration sees as the more immediate challenge of lifting the country out of a deep recession that has cost 7.2 million jobs over the past two years. The result is a budget plan that would give the country trillion-dollar-plus deficits for three consecutive...

President Barack Obama will propose on Monday a $3.8 trillion budget for fiscal 2011 that projects the deficit will shoot up to a record $1.6 trillion this year, but would push the red ink down to about $700 billion, or 4% of the gross domestic product, by 2013, according to congressional aides. The deficit for the current fiscal year, which ends on Sept. 30, would eclipse last year's $1.4 trillion deficit, in part due to new spending on a proposed jobs package. The president also wants $25 billion for cash-strapped state governments, mainly to offset their funding of the Medicaid...

White House Projects Record Deficit This Year Source By REUTERS Published: January 31, 2010 WASHINGTON (Reuters) - The White House predicts that the United States will post a record $1.6 trillion budget deficit in the current fiscal year, a congressional source told Reuters Sunday. In its budget proposal to be released Monday, the White House predicts that deficits will fall to $700 billion by fiscal 2013 before gradually rising back to $1.0 trillion by the end of the decade, the Capitol Hill source said.

Dems freak out over CBO report, blame Bush for next year's deficit By: David Freddoso Online Opinion Editor01/26/10 2:44 PM EST The CBO has a new report predicting huge deficits, a slow economic recovery, and a $75 billion cost overrun on President Obama's stimulus package.From Stephen Dinan at the Washington Times:The CBO now says the stimulus package, passed by Congress last February, will cost $862 billion over 10 years because of the added unemployment-related costs. The program had originally been estimated to cost $787 billion when Mr. Obama signed it in February...Already, the deficit for fiscal year 2010, which began...

Economic growth to remain 'muted,' analysts estimate The U.S. government will in 2010 record its second-biggest budget deficit since World War II, the Congressional Budget Office estimated Tuesday, while economic growth will probably stay "muted" for the next few years.

Barack Obama has the worst budget record of any president in American history. White House budget office spokesman Tom Gavin claimed "a very strong beginning" for the president's purported first-year attempts at controlling spending - for example, zeroing out a $17 million program for work incentive grants. But such paltry efforts are round-off numbers compared to the gush of red ink created by President Obama and congressional Democrats. This government is setting the United States on an inevitable path to permanent debtor status.

Americans could be in for a rude awakening in coming months when they discover the true scope of the massive national debt racked up by the U.S. government. In fact, the $1.6 trillion deficit expected for 2010, which is above 10% of gross domestic product (GDP), is only the beginning. Since the current economic crisis began in late 2007, the U.S. Federal Reserve has tripled the size of its balance sheet, creating enormous amounts of new money by lending to hundreds of ailing banks and buying up more than $1 trillion of questionable asset-backed securities. But that's only a small...

WASHINGTON -- * The Senate voted yesterday to raise the ceiling on the government debt to $12.4 trillion, a massive increase over the current limit and a political problem that President Obama has promised to address next year. The Senate's rare Christmas Eve vote, 60-39, follows House passage last week and raises the debt ceiling by $290 billion. The vote split completely along party lines, with Democrats voting to raise the limit and Republicans voting against doing so. There was one defection on each side, by senators up for re-election next year: GOP Sen. George Voinovich of Ohio and Democratic...

Senate Passes $1.1. Trillion Spending Bill Measure authorizes more money to run much of the government WASHINGTON - The Democratic-led Senate on Sunday passed and sent to President Barack Obama an end-of-year $1.1 trillion spending bill that includes money to run much of the government and pay for health care benefits for the poor and elderly. The spending measure, which passed 57-35, gives the Education Department, the State Department, the Department of Health and Human Services and others generous budget increases far exceeding inflation. On Saturday, the Democratic-controlled Senate voted 60-34 to end the Republican attempt to use a legislative...

Now, who said the following? "My prediction is that politicians will eventually be tempted to resolve the [fiscal] crisis the way irresponsible governments usually do: by printing money, both to pay current bills and to inflate away debt. And as that temptation becomes obvious, interest rates will soar." Seems pretty reasonable to me. The surprising thing is that this was none other than Paul Krugman, the high priest of Keynesianism, writing back in March 2003. A year and a half later he was comparing the U.S. deficit with Argentina's (at a time when it was 4.5 percent of GDP). Has...

-- snip --Mr. Obama's spending choices are dragging congressional Democrats into ugly electoral territory where many are likely to meet a brutal fate next fall.

I have always depended on the kindness of strangers,” said Blanche DuBois, in the final words of the play A Streetcar Named Desire. Well, don’t we all. Many citizens probably still cling to the old saw that public debt doesn’t matter because “we owe it to ourselves.” Wrong. Debt always matters. And as for whom we owe it to, it is a lot of kind (or, at least, not yet unkind) strangers. As recently as 1970, foreign holders of U.S. debt were essentially non-existent. But their slice of our obligation pie has steadily increased, especially over the past two decades,...

The president says he understands the urgency of our fiscal crisis, but his policies are the equivalent of steering the economy toward an iceberg. President Barack Obama took office promising to lead from the center and solve big problems. He has exerted enormous political energy attempting to reform the nation's health-care system. But the biggest economic problem facing the nation is not health care. It's the deficit. Recently, the White House signaled that it will get serious about reducing the deficit next year—after it locks into place massive new health-care entitlements. This is a recipe for disaster, as it will...

Barack Obama Assures Asia that US Borrowing Will Not Spiral Out of Control President Barack Obama has promised Asia's creditor nations that Washington will not let US borrowing spiral out of control, vowing a major drive to cut the budget deficit and restore global confidence in the US dollar. By Ambrose Evans-Pritchard 15 Nov 2009 "As the economy recovers, I intend to take serious steps to reduce America's long-term deficit," he told the Asia-Pacific Economic Co-operation (APEC) forum in Singapore. "Debt-driven growth cannot fuel America's long-term prosperity." The assurance comes amid growing doubts across the world over the wisdom of...

President Barack Obama has promised Asia's creditor nations that Washington will not let US borrowing spiral out of control, vowing a major drive to cut the budget deficit and restore global confidence in the US dollar. "As the economy recovers, I intend to take serious steps to reduce America's long-term deficit," he told the Asia-Pacific Economic Co-operation (APEC) forum in Singapore. "Debt-driven growth cannot fuel America's long-term prosperity." The assurance comes amid growing doubts across the world over the wisdom of White House spending plans. The US Congressional Budget Office expects the deficit to remain around $1.8 trillion (£600bn) as...

Our kids are the ultimate credit market, and the rest of us are all pre-approved! By Mark Steyn Just between you, me, and the old, the late middle-aged, and the early middle-aged: Isn’t it terrific to be able to stick it to the young? I mean, imagine how bad all this economic-type stuff would be if our kids and grandkids hadn’t offered to pick up the tab. Well, okay, they didn’t exactly “offer” but they did stand around behind Barack Obama at all those campaign rallies helping him look dynamic and telegenic and earnestly chanting hopey-hopey-changey-changey. And “Yes, we can!”...

I think we’ve all been broke before. Large men come and break your thumbs and threaten your family, and then you hide out in a dumpster until it all blows over. That’s all well and good for an individual, but what happens if our entire country goes broke? Robert J. Samuelson raised this concern in the Washington Post, and it got me worried, even though I didn’t quite understand it all (which perhaps actually increases the worry). We can’t just hide America in a dumpster (and even if we could, I bet that goody-two-shoes Canada would rat us out); we...

The Government Will Default On Its Debts Economics / Great Depression II Nov 02, 2009 - 08:01 AM By: Gary_North The governments of every major nation are going to default on their debts. There are two relevant questions: (1) How? (2) When?Establishments around the world all deny this. They have gained power and wealth by means of the expansion of government. They have justified their success by insisting that the government-business alliance is the only way to establish economic growth and economic security for the masses. This claim rests on a more fundamental claim, namely, that an unhampered free market...

The real 2008 federal budget deficit was $5.1 trillion, not the $455 billion previously reported by the Congressional Budget Office, according to the 2008 Financial Report of the United States Government released by the U.S. Department of Treasury, Jerome Corsi's Red Alert reports. The difference between the $455 billion "official" budget deficit numbers and the $5.1 trillion budget deficit based on data reported in the 2008 financial report is that the official budget deficit is calculated on a cash basis, where all tax receipts, including Social Security tax receipts, are used to pay government liabilities as they occur. The calculations...

Describing Obama's out-of-control spending as "staggering," Sen. Judd Gregg said "the effect of it will pass on to our children a debt ratio - about 80% of GDP! - which is unsustainable. This is type of debt ratio you see in banana republics." The deficits, he said, are the equivalent of "running your country into the ground." Gregg told CNN's John King that the 2009 budget deficit came in at $1.4 trillion. "And you just can't do that. You can't keep running these programs and not pay for them, throwing debt on top of debt."

WASHINGTON (Reuters) – The United States must live within its means once its economy recovers if it is to preserve global confidence in the U.S. dollar's status, Treasury Secretary Timothy Geithner said on Friday. The comments came as the Obama administration reported a record U.S. budget deficit for the fiscal year ended September of $1.4 trillion. At 10 percent of gross domestic product, it was the biggest U.S. fiscal shortfall since World War Two.

The federal budget deficit tripled to a record $1.4 trillion for the 2009 fiscal year that ended last week, congressional analysts said Wednesday. The Congressional Budget Office estimate, while expected, is bad news for the White House and its allies in Congress as they press ahead with health care overhaul legislation that could cost $900 billion over the next decade. The unprecedented flood of red ink flows from several factors, including a big drop in tax revenues due to the recession, $245 billion in emergency spending on the Wall Street bailout and the takeover of mortgage giants Fannie Mae and...

Happy New Year! But leave the hats and horns in the closet. There's nothing to celebrate. Today marks the start of the 2010 federal fiscal year. The only thing good about it is that FY'09 is finally over. It was the fiscal year in which the U.S. suffered the worst economic downturn since the Great Depression and government numbers reflected that. It was as if a fiscal tsunami struck and flooded the nation with red ink. By the time the final numbers are in for the fiscal year just ended, the federal deficit will have hit an all-time high in...

The Bush-era deficits were bad. I know. I spent eight years complaining about the president’s lack of fiscal responsibly (here and here for instance). I even wrote that Republicans during Bush’s time in office made French socialists look like Reagan. However, President Obama's new projected deficits are truly frightening. And the worse part: we haven’t seen it all yet. Based on Congressional Budget Office (CBO) data, the following chart shows a projection of deficit numbers for each year until fiscal 2018. Each color represents the difference between the projected deficits at different points in time. The purple bars represent the...