This Year’s Best Comedy
By Matt Hershey
Nowadays, you do not have to go to the movies to get a good laugh. All you have to do is read President Obama’s latest budget proposal, which promises a good laugh. For those nostalgic for the Bush years, Obama will have incredibly outspent his predecessor by March 15, 2012. Bush got grief for spending like a child in a candy store, but Obama has been spending like that child with a really bad meth habit.
No president has ever run budget deficits exceeding a trillion dollars in each of four consecutive years. George W. Bush only accomplished this feat twice. It took 231 years for America to accumulate 10 trillion dollars in debt; it only took Obama four years to spend half as much. If war spending is decreasing and it has been years since the American Reinvestment and Recovery Act, why are federal deficits projected to grow years into the future?
Obama’s budget reflects a blatant lack of fiscal responsibility, but some budgetary accomplishments are nonetheless worth highlighting. In the first four years of his administration, federal spending has reached more than 24 percent of gross domestic product, the highest level of spending since 1946. The White House estimates that Obama’s budget proposals will reduce the deficit by 1.1 trillion dollars, a mere 2.9 trillion dollars less than the savings forecasted under the bipartisan deficit commission’s proposal. The federal government plans on spending a record 46 trillion dollars over the next decade — that is the next decade, not century. This spending is not all money borrowed from China, either. The amount of debt that is publicly held and which the government must pay back will rise from 74 percent to 77 percent of GDP.
What could possibly account for these skyrocketing costs? Put simply, a combination of Obama’s unwillingness to effectively reform entitlements. Obama was elected in 2008 to change beltway politics but his budget confirms that he is simply a political animal. His budget offers no attempt to reform Medicaid, which some believe will go bankrupt by the end of his second term. Far from resolving future solvency issues for Medicare and Medicaid, Obama’s health care reform legislation will increase the number of federal program dependents to reduce the number of uninsured Americans. As opposed to to streamlining our growing welfare state, The Affordable Care Act will also create a new entitlement program for middle class Americans who earn incomes up to four times the poverty level. Obama has also adamantly rejected even considering viable reform options such as Paul Ryan’s voucher system on the grounds that they are “un-American.” Even Obama’s own Treasury Secretary Tim Geithner concedes that the president will leave us with unsustainable welfare programs. Does it get funnier—or gloomier—than that?
President Obama has time and again promised budget cuts if only obstructive Republicans in Congress would get out of the way. But the difference between the platitudes and realities of the administration’s fiscal proposals are profound. Even most liberals would laugh at the absurdity of what constitutes a budget cut. For example, Obama counts the 781 billion dollars that would have been spent occupying Iraq and Afghanistan over the next ten years as a budget cut. Why not consider how many trillions of dollars it would have cost to continuously occupy every other country we have fought and the trillions of dollars in savings that would result from not doing so? This sort of logic will not solve the budget crisis.
Joke as he may, President Obama’s illogical tax policy is no laughing matter. It relies largely on higher taxes on the rich that cannot possibly reduce a deficit caused by runaway spending. But the budget does not mention how precisely to implement these taxes on the wealthiest Americans. Obama touts the Buffett Rule on camera, but fails to mention it at all in the budget. The budget does include a number of sizeable tax increases, raising the long-term capital gains tax from 15 percent to 20 percent, treating dividends as ordinary income for taxpayers making over 200,000 dollars and allowing the estate tax to revert to 45 percent, up from 35 percent under existing legislation.
Rather than reform a complicated and top-heavy tax structure, Obama is pursuing policies that actively discourage investment. America competes with foreign countries for capital, and contrary to popular belief in the White House, increasing tax rates on risk-taking investors does not attract investment. Funnily enough, President Obama has received more political contributions from Wall Street firms and executives than all of the Republican presidential hopefuls combined.
Could this be attributed to the fact that most of his tax increases will preserve the current loopholes that allow many of these people to significantly reduce their tax burdens? By simply raising taxes, Obama can appear like he is cracking down on “the one percent” while doing the exact opposite. Meanwhile, Obama’s hard-fought payroll tax holiday will expire in ten months. The president’s rhetoric about rebuilding the working class and asking more of well-to-do Americans contradicts his own budget that preserves special privilege for the financial elite and raises taxes on ordinary workers.
Even if these tax increases yielded all the new revenue the administration promises, the 2013 deficit will still be 901 billion dollars, or about the size of annual deficits for the rest of the decade. Obama’s limitless propensity to spend money is a laughable idea of “change you can believe in.”