Widest-ever Oct. Budget Deficit Kicks Off Obama’s 1st Fiscal Year

18 Comments

1. Oftentimes, when I bring up the incumbent Administration’s spending spree… our critics (in the comments section) remind me that Obama is still operating on Bush’s budget. (Of course, Bush’s last two budget had to first be passed by Democratic Congresses…)

   It’s even worse than that, for the Democrats.

   In 2008, they deliberately broke tradition and held up the FY 2009 budget, so that Obama could add to it and seal it come January. So Obama has really owned his first-year budget, in a special way that previous Administrations haven’t.

   Of course, the average person doesn’t care so it gets forgotten. But so what. As you point out, from now on the average person will blame no one but him, for the budget and the economy. (And rightly so.)

   Comment by ILoveCapitalism — November 13, 2009 @ 1:23 pm - November 13, 2009

2. And now, Obama is declaring that starting next year, he’s going to become a total deficit hawk, and start cutting the budget every which a way. This sounds an awful lot like a “As soon as the holidays are over, I’m starting a diet” type of promise.

   Comment by V the K — November 13, 2009 @ 4:54 pm - November 13, 2009

3. Duh…
   As everyone outside of rightwing lala land knows, the stimulus spending has prevented our economy from falling into a depression. One imagines that, all rhetoric aside, if any Republican, even Ron Paul, had won the election, they would have run up a similar deficit trying to stimulate the economy.

   And I bet y’all totally understand that, and thus are complete hypocrites for constantly making this argument. But of course, phony arguments are all ya got….

   Comment by Tano — November 13, 2009 @ 5:00 pm - November 13, 2009

4. V, more like “As soon as I get that final hit of crack, I’ll have the energy I need to clean up my act and get off crack.”

   Where crack == the addiction to deficits and an endlessly-growing government.

   Comment by ILoveCapitalism — November 13, 2009 @ 5:39 pm - November 13, 2009

5. Or I should say, crack == so-called “economic stimulus”

   Comment by ILoveCapitalism — November 13, 2009 @ 5:40 pm - November 13, 2009

6. the stimulus spending has prevented our economy from falling into a recovering from its current depression

   Fixed it for ya, Tano.
   

   One imagines that, all rhetoric aside, if any Republican, even Ron Paul, had won the election, they would have run up a similar deficit trying to stimulate the economy.

   Tano, let me give you a big hint. Paul’s economic advisor was a guy named Peter Schiff. He knows way, way more about economics than you do. And no, he would absolutely NOT have run up the deficit in the name of “stimulus”. Quite the opposite. Check out his rants at the link.

   Comment by ILoveCapitalism — November 13, 2009 @ 5:44 pm - November 13, 2009

7. Or check out his articles at this site: http://www.europac.net

   Comment by ILoveCapitalism — November 13, 2009 @ 5:45 pm - November 13, 2009

8. Or his book on Amazon: http://www.amazon.com/Crash-Proof-2-0-Economic-Collapse/dp/047047453X

   I’ve beaten the markets handily this year, following his basic advice. I won’t be so fortunate every year of course – No one ever is – but I will be ahead on a 5- to 10-year basis, if Obama doesn’t impose outright communism first.

   Comment by ILoveCapitalism — November 13, 2009 @ 5:47 pm - November 13, 2009

9. One imagines that, all rhetoric aside, if any Republican, even Ron Paul, had won the election, they would have run up a similar deficit trying to stimulate the economy.

   Not likely.

   Republicans use tax cuts, not government spending, to stimulate the economy — and for a very good reason.

   So what are these multipliers? In their new blog, Bob Hall and Susan Woodward look at spending increases from World War II and the Korean War and conclude that the government spending multiplier is about one: A dollar of government spending raises GDP by about a dollar. Similarly, the results in Valerie Ramey’s research suggest a government spending multiplier of about 1.4. (Valerie does not present her results in multiplier form, but she emails me this translation: “The right column of figure 5A of my paper shows that for a log change of government spending of 1, log GDP rises by 0.28, implying an elasticity of 0.28. To back out the implied multiplier, we can use the fact that government spending averages around 20% of GDP. This implies a multiplier of 1.4.”)

   By contrast, recent research by Christina Romer and David Romer looks at tax changes and concludes that the tax multiplier is about three: A dollar of tax cuts raises GDP by about three dollars.

   In short, tax cuts have been proven — ironically, in research by Obama’s own economic advisor — to have two to three times the stimulative effects on GDP as does government spending. Or, put differently, you get the same effect for half to a third of the cost.

   The problem, though, is that tax cuts stimulate the economy by reducing the expenses of businesses, working people, and others who pay taxes, thus enabling them to produce more goods and services, employ more people, and purchase more items. They don’t go to the welfare rolls, state payrolls, and corrupt ACORN organizations that are the base of the Obama Party. The whole point of Obama’s “stimulus” was to put money taken from the former into the latter’s pockets — which is why all it’s done is raise the deficit.

   Comment by North Dallas Thirty — November 13, 2009 @ 6:37 pm - November 13, 2009

10. As everyone outside of rightwing lala land knows, the stimulus spending has prevented our economy from falling into a depression.

    A talking-points assertion that not even the looniest of the liberal media is buying.

    My favorite quote?

    Some of the errors are striking: The community action agency based in Greenfield reported 90 full-time jobs associated with the $245,000 it got for its preschool Head Start program. That averages out to just $2,700 per full-time job. The agency said it used the money to give roughly 150 staffers cost-of-living raises. The figure reported on the federal report was a mistake, a result of a staffer’s misunderstanding of the filing instructions, said executive director Jane Sanders.

    Several other Head Start agencies also reported using stimulus funds for pay raises and claimed jobs for it.

    Giving people pay raises is not “saving a job” — except in the leftist universe that Barack Obama occupies and for which Tano regularly beclowns himself.

    Comment by North Dallas Thirty — November 13, 2009 @ 6:44 pm - November 13, 2009

11. Republicans use tax cuts, not government spending, to stimulate the economy

    Yeah but NDT, tax cuts would lower government revenues in the short run, thus increasing the deficit in the short run. They would raise revenues in the medium to long run, of course. But on a short-run basis, they would play into Tano’s claim of Republicans increasing the deficit. Even Bush initially ran $400B annual deficits before his tax cuts generated enough growth to lower deficits to the $100B range.

    The key is to cut deficits by cutting spending. Also, cutting regulation. Those two measures would lower the burden of government on the economy, permitting growth and job creation in the private sector.

    Have you ever heard of the Great Depression of 1920? If you have, well, I’ll bet Tano hasn’t. People haven’t heard of it for a reason. Because government did all the right things to solve it. They cut spending, cut taxes, cut the deficit, cut regulations. That freed people’s activities so growth could come roaring back (the Roaring 20s).

    Contrast that to the Great Depression of the 1930s. First under Hoover and then under Roosevelt, the government did all the wrong things: raising spending, raising taxes, raising deficits and raising regulations and directives. Therefore, job creation suffered and the country had 13 years of torture, ended only by WW2.

    Comment by ILoveCapitalism — November 13, 2009 @ 6:49 pm - November 13, 2009

12. So, in conclusion, to solve unemployment, the government needs to do all four:
    - Cut taxes
    - Cut spending much more; meaning
    - Cut the deficit. And,
    - Cut regulations.

    We need all four. With spending cuts being the most important to tackle. (Since spending is out of control and is the biggest cause of deficits being out of control.)

    Comment by ILoveCapitalism — November 13, 2009 @ 6:52 pm - November 13, 2009

13. “Republicans use tax cuts, not government spending, to stimulate the economy — and for a very good reason.”

    Holding all else equal, decreasing government revenue has the same effect on the budget bottom line as increasing government expenditure.
    Whether you stimulate by spending or cutting taxes, you are increasing the deficit.

    Comment by Tano — November 13, 2009 @ 8:46 pm - November 13, 2009

14. “The key is to cut deficits by cutting spending’

    Cutting spending in this recession would have been a total disaster.

    Thats why i said that even Ron Paul would have stimulated the economy. I fully understand that he, and his advisors, are dead set, i deologically against that. But actually being in a position of power and responsibility is enormously different than just shooting off your mouth, spewing ideology, to no effect – as Paul does now, and as all of you (and I) do. If Paul were elected, then suddenly his simple-minded ideology becomes a luxury he couldn’t afford. He would have to do what the overwhelming majority of economists and businessmen and politicians know needed doing.

    Comment by Tano — November 13, 2009 @ 8:51 pm - November 13, 2009

15. Cutting spending in this recession would have been a total disaster

    , for America’s moochers, and the Democrats who count on their votes.
    

    Thats why i said

    , ignorantly and wrongly,
    

    that even Ron Paul would have stimulated the economy…

    [Paul] would have to do what the overwhelming majority of economists and businessmen and politicians know needed doing

    , according to Tano. Which is: exactly what Obama has done, digging America’s hole ever deeper and thereby causing ever greater unemployment, also so that the Democrats’ moochers can continue to live as moochers.

    Comment by ILoveCapitalism — November 13, 2009 @ 10:04 pm - November 13, 2009

16. Holding all else equal, decreasing government revenue has the same effect on the budget bottom line as increasing government expenditure.

    Except that, with tax cuts, you get three times the value for the economy.

    But again, Tano, you are not concerned about value; you are a moocher, as ILC put it correctly, who is only concerned about his welfare checks. You don’t care about jobs or business because you have no intention of working; you are a parasite who only steals from others.

    Comment by North Dallas Thirty — November 13, 2009 @ 11:42 pm - November 13, 2009

17. As everyone outside of rightwing lala land knows, the stimulus spending has prevented our economy from falling into a depression.

    As everyone who doesn’t have their nose buried deep in Chairman Obama’s ass knows millions are unemployed, millions are losing their homes, nobody can get credit, no businesses are adding inventory, the dollar’s in the toilet along with consumer confidence. But Obama got himself a raise so he can go play golf or shoot hoops while the Proles suffer the results of liberalism.

    He gets Wagyu Beef, we get Hamburger Helper if we’re feeling particularly extravagant.

    Besides, Tardo, the liberal left tried desperately for eight years to convince us we were in a depression. Now we have one of their creation. Why would they want it to end? Rahm Emanuel says it’s a good thing.

    Comment by ThatGayConservative — November 14, 2009 @ 5:56 am - November 14, 2009

18. TGC, in other words: “Oops, too late.”
    

    the stimulus spending has prevented our economy from falling into a depression

    That’s such a rich quote. It may be my favorite GP quote of the last week.

    First, there’s the fact that if unemployment were measured by Depression-era methods, it would be 22%: http://www.shadowstats.com/

    So what’s the difference between today’s unemployment and the Great Depression? Women in the workforce, and computer games for the unemployed, are the only differences I can think of.

    But what I love even more about the quote is that in another context, DNC, MoveOn and Kos talking points Tano will be telling us that we need more stimulus spending because unemployment is so high and his Dear Leader’s stimulus spending mostly hasn’t even kicked in yet. Wait for it. (The third part contradicts the first part, but that won’t matter to DNC, MoveOn and Kos talking points Tano.)

    Comment by ILoveCapitalism — November 14, 2009 @ 8:59 am - November 14, 2009

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