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Friday, March 20, 2009

How is the Tingle Working? Obama Deficits to be $9.3 Trillion over Decade



This will be a short honeymoon. Anyone with a brain and who has watched how Congress has conducted itself over the last few weeks must take pause and ask if this is the same group that you would want to run your healthcare. We can see what they have done for our 401k's and housing. Obama is delusional if he thinks he can nationalize education, health care and energy.

Hope and change? Got it.
______________________


March 21, 2009
Much Bigger Deficits Seen in Budget Office Forecast

By DAVID STOUT
WASHINGTON — President Obama’s budget proposals, if carried out, would produce a staggering $9.3 trillion in total deficits over the next decade, much more than the White House has predicted, the Congressional Budget Office said on Friday.

The office’s estimates of deficits in the fiscal years 2010 through 2019 “exceed those anticipated by the administration by $2.3 trillion,” the budget office said in a report.

The deficits under the Obama plan would be $4.9 trillion more than the deficits that would be projected if there were no changes in current laws and policies — what the nonpartisan budget office calls its baseline assumption.


The startling new figures have enormous implications, political as well as fiscal. They are certain to bring new expressions of alarm and dismay from deficit hawks on Capitol Hill, where the president’s $3.6 trillion budget proposal for the next fiscal year, which begins in October, has already stirred debate.

President Obama’s budget director, Peter R. Orszag, conceded in a news briefing on Friday that annual deficits of 4 to 5 percent of gross domestic product, as envisioned in the office’s report, are “ultimately not sustainable.”

But Mr. Orszag insisted that administration officials “remain confident” in what he called “the four key principles” of the president’s budget outline: health care reform, improvements in education, energy efficiency, and reducing the annual deficit in half by the end of the president’s first term from the extraordinary levels it has suddenly reached because of the bailout and stimulus spending this year — spending that the budget office said would help to bring an end to the recession by the end of 2009.

Mr. Orszag said he was confident that those goals will all be accomplished in whatever budget resolution emerges after negotiations with Congress. Asked about recent statements by Senator Kent Conrad, the North Dakota Democrat who heads the Budget Committee, that the president’s spending plans might have to be adjusted downward, Mr. Orszag said it was always assumed that there would be negotiations. “It’s not like the process would have them just Xerox and vote on it,” he said.

As for the differences among various budget projections, Mr. Orszag attributed them in part to small percentages — such as divergent assumptions about the rate of economic growth — that, when applied to huge numbers, can produce eye-popping contrasts.

The new estimates will reignite the debate over whether the president’s spending plans are far too ambitious, given the state of the economy, or just what is needed to address systemic problems.

“If there was ever any doubt that the administration’s budget spends too much, taxes too much and borrows too much, it’s gone,” said Senator Mitch McConnell of Kentucky, the Republican minority leader.

Senator Charles E. Grassley, Republican of Iowa and ranking minority member on the Finance Committee, as well as a senior member on the Budget panel, said Congress and the White House need to get the message that the new figures embody.

“People can afford only so much government spending, even for the worthiest-sounding causes,” he said in a statement.

Representative John A. Boehner of Ohio, the House Republican minority leader, had a similar reaction. “We simply cannot continue to mortgage our children and grandchildren’s future to pay for bigger and more costly government,” he said.

But USAction, an organization pushing for passage of the president’s budget, said the new numbers teach an opposite lesson. “This revised report delivers a stark message that the economy is in even worse shape than previously thought,” said Alan Charney, the group’s program director. “It reinforces why it’s even more critical to pass the initiatives on healthcare, education and the economy laid out the President’s budget.”

The deficit is the year-by-year gap between what the government spends and the revenue it takes in. So even if annual deficits are cut, the overall national debt will continue to grow so long as there is no surplus. The debt now stands at around $11 trillion, with about $6.5 trillion owed to individuals, corporations and governments and other lenders, foreign or domestic, while about $4.3 trillion is owed to the funds for Social Security benefits, military and civil service pensions and other government programs.


New York Times



37 comments:

  1. Taking on what seems, contemporaneously, as MASSIVE DEBT, is a hallmark of great Presidents.

    As wiki informs US, as to a past Presidient and how he overcame the "tough times" that were the result of the previous Administration. Just a scenario that our current President finds himself in:

    Unemployment peaked at over 10.7% percent in 1982 then dropped during the rest of Reagan's terms, and inflation significantly decreased. A net job increase of about 16 million also occurred (about the rate of population growth).

    The policies were derided by some as "Trickle-down economics," due to the significant cuts in the upper tax brackets. There was a massive increase in Cold War related defense spending that caused large budget deficits,[17] the U.S. trade deficit expansion, and contributed to the Savings and Loan crisis, In order to cover new federal budget deficits, the United States borrowed heavily both domestically and abroad, raising the national debt from $700 billion to $3 trillion, and the United States moved from being the world's largest international creditor to the world's largest debtor nation.


    They're goin' to pass some revised version of his Program, with most all of the major pieces still in place.

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  2. I've been trying to tell you all, Don't pay any attention to ANYTHING, right now.

    The Deficit will NOT be 9.3 Trillion over the next Decade. Nor will it be 8.3 Trillion, or 7.3 Trillion, or 6.3 Trillion.

    You've got to understand the rules under which the CBO operates. They have to assume (by law) that the "Expenditures" for all outyears will be the same as the expenditures for the current year. Thus, if you have a $900 Billion stimulus package "this year," then they have to assume a $900 Billion Stimulus package, "Every Year."

    It's all, "Hyperbolatin," right now, folks. He's going to have some pretty good deficits, but they won't be "killers."

    The damage will be in other areas.

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  3. Tiz all good. One thousand 2019 dollars will be the same as one 2009 US dollar.

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  4. The Slaughter of the Innocents Continues
    Two Teens Shot & Killed Last Night in Highland Park -

    Two teen boys, one sixteen and one fifteen, have died following being shot by suspected gang members Friday afternoon in Highland Park, according to an LAPD press release. The shooting took place just before 3:30 p.m. in the 1600 block of North Figueroa Street. Officers arriving on scene found Alejandro Garcia, 16, and Carlos Hernandez, 15, lying on the sidewalk suffering from multiple gunshot wounds. Both victims later died at the hospital. "According to detectives, a group of men believed to be gang members confronted the teens while they were on a sidewalk. A fracas broke out and one of the gunmen pulled out a handgun and fatally shot them. The suspects then ran from the scene." Police believe the shooting was "gang motivated," and the suspects remain at large.

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  5. We'll just move them zeros, when the new American currency is introduced, mat.
    Should happen before 2019, though.

    It's only money, script. The value of the paper has always been illusionary, seems you've just come to realize that. Some of US have known it for as long as we can remember.

    The zealotry of the newly converted, it is cute.

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  6. The value of the paper has always been illusionary, seems you've just come to realize that. Some of US have known it for as long as we can remember.
    ==

    Aha. Tell that to the pensioners on fixed income. Those that still haven't had their life's savings raided.

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  7. There were more than a few who tried to tell them, mat, but none are so blind as those that refuse to see.

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  8. This comment has been removed by the author.

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  9. Tell them what? That they have a choice as to how their pension savings is stolen from them?

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  10. Secessionist California Pig Farmers Swear Revenge on 'Hollywood Types' - LAist Los Angeles News, Food, Arts & Events

    The New York Times reports on a growing movement to separate California into geographical sects, spearheaded by Big Ag laborers who blame city-dwellers for failing farm productivity and insensitive policies.

    “They think fish are more important than people, that pigs are treated mean and chickens should run loose,” said Mr. [Virgil] Rogers, who said he hitched a ride in 1940 to Visalia from Oklahoma to escape the Dust Bowl, with his wife and baby son in tow. “City people just don’t know what it takes to get food on their table.”

    The final straw for folks like Mr. Rogers was Proposition 2, a ballot measure in November that banned the tight confinement of egg-laying hens, veal calves and sows. While many food activists and politicians in the state hailed the vote as proof of consumers’ increasing interest in where their food comes from, the proposition’s passage has angry farmers and their allies wanting to put the issue of secession to a vote, perhaps as soon as 2012.

    The irony of Prop 2, of course, is that now California's supermarkets are simply purchasing their eggs from foreign farms that are not beholden to any state laws. (Yup, that means your run-of-the-mill grocery eggs aren't any happier than they were pre Prop-2).

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  11. No, to tell them that they should have controlled their savings, themselves. Not trusting to the Bernie Madoffs of the whirled to deliver better than average returns.

    That they have no business thinking that they can live on the laurels of their past.

    That they trusted in others when they should have trusted in themselves.

    That those 'savings' were not savings at all, but were investments.
    The two are not synonyms, never were.

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  12. I don't know beans about pensions, but I'd bet a dollar to a donut that a "qualified" pension has to be indexed to inflation.

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  13. Never invest what you cannot afford to lose, mat.

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  14. And inflation, managed by the Fed, guarentees that saving is a net loser. So one must spend or invest, but investment entails risk.

    Life is risky,
    we cannot legislate that reality away.

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  15. It has only gotten worse, since:
    Friday, Oct. 31, 2008

    Pension Funds Weakened By Stock-Market Decline
    By Jeremy Caplan


    Remember those defined-benefit programs through which companies promised a certain amount every month to retirees? The market crash may be dealing that already waning concept a final, fatal blow. A new report from Goldman Sachs' Global Markets Institute illustrates that massive equity losses have resulted in S&P 500 companies' pension funds, which had been overfunded at the start of the year, fading so fast that they are now underfunded as a group. Instead of holding 108% of the assets they were promising to provide to retirees, they now hold just 91% (and falling).

    As the appropriately dubbed "Pension Palpitations" report details, the S&P 500's pensions are now collectively underfunded by at least $115 billion. The problem stretches far beyond the finance sector. Five of the companies with the highest dollar amount of pension underfunding, according to the report, are Raytheon (underfunded by $1.6 billion), Johnson & Johnson ($1.5 billion), ExxonMobil ($1.4 billion), Macy's ($980 million) and Alcoa ($950 billion). "This is affecting the broad swath of companies that make up the fabric of what we call the 'real economy,'" says Mark T. Williams, a risk-management expert and finance professor at the Boston University School of Management.

    With the stock market shedding more than a third of its value this year, pension funds at big companies have been battered beyond recognition. What looked like safe stowaway spots where corporations securely tucked away assets for their employees' retirements now look like roller-coaster funds. In addition to sending shivers up the spines of employees who count on that income, the problem also threatens to haunt the bottom line at many major firms. Williams says some may be forced to consider mergers to accumulate bigger asset bases or may have to sell off strategic assets.

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  16. It looks to me that the only people that will save the Obama Administration will be the Republicans. The Democrats will take him out with their nuttiness in a few more months. Even liberals are scratching their heads. Check this one out:

    from Paul Krugman
    AIG
    Preliminary thoughts on the tax bill:

    1. It’s not the way you should make policy — it’s clumsy, and it will punish some innocent parties while letting the most guilty off scot-free

    2. But — there wasn’t much alternative at this point. And for that I blame the Obama people.

    I’ll leave to others the question of who knew or should have known that the bonus firestorm was coming; but it’s part of a pattern. At every stage, Geithner et al have made it clear that they still have faith in the people who created the financial crisis — that they believe that all we have is a liquidity crisis that can be undone with a bit of financial engineering, that “governments do a bad job of running banks” (as opposed, presumably, to the wonderful job the private bankers have done), that financial bailouts and guarantees should come with no strings attached.

    This was bad analysis, bad policy, and terrible politics. This administration, elected on the promise of change, has already managed, in an astonishingly short time, to create the impression that it’s owned by the wheeler-dealers. And that leaves it with no ability to counter crude populism.

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  17. Never invest what you cannot afford to lose, mat.
    ==

    I see. A pension plan is there to be stolen by corporate raiders from a company or government trust. How very quaint.

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  18. New York Democrats Indicted in Alleged $30 Million 'Pay-to-Play' Scheme

    A Democratic consultant and state official were indicted Thursday for allegedly receiving $30 million in kickbacks, as New York's attorney general accused them of using the state's pension fund investments as a "piggy bank."


    FOXNews.com
    Friday, March 20, 2009

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  19. And inflation, managed by the Fed, guarentees that saving is a net loser. So one must spend or invest, but investment entails risk.

    Life is risky,
    we cannot legislate that reality away.


    Your words are wasted on mat, rat. He's oblivious to anything but collectivist rants and his *feelings* of *outrage*.

    I manage a modest investment package for my mom, as well as my own equally modest investments. That's "investments", not "savings".

    We're down by single digit percentages overall, since just before the big meltdown. At first sign that things were headed south, I cashed in about 70% of equity funds, and we're riding things out with the remainder. I'm with Rufus on the economy.

    Mat blows smoke from his ass, but has nothing to offer but gangrene taimted advice.

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  20. The shares are still there, their realitive value, to the rest of the market, remains constant.

    There's been no change, except the illusion has been marred. The mirror cracked.

    But the pensionaires bought into the System, that was, quite possibly, an error in strategic life planning.

    They bought into a game that had a fixed parley, mat. Warinings of the potential for fraud abounded, most were ignored.

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  21. Mat blows smoke from his ass, but has nothing to offer but gangrene taimted advice.
    ==

    Feel better now, Chewbacca?

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  22. But the pensionaires bought into the System
    ==

    My impression was that they were legislated into it. Am I wrong?

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  23. No, you chose where you work, mat.

    Not all employeers offer pension programs. Most private employers do not. Pensions are usually found amongst government or unionized workforces, now-a-days. With 401ks and IRAs taking their place in the majority of the private labor market.

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  24. This comment has been removed by the author.

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  25. Seems to me most everyone in the US is screwed. But hey, if you're happy with the system, enjoy.

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  26. Life is risky,
    we cannot legislate that reality away.
    ==

    LOL! When was the last time you and I got to legislate anything?

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  27. I find the pension stuff kind of interesting a I puzzle about the future. Here you have folks who have worked their lives away in various industries with contracts specifying a nice pension through their retirement with many of them indexed to inflation. Welp, many of those pensions are currently underwater. Rat seems to think that they will be left out in the cold if things continue on their merry way downward. I dunno about that. I believe there is an insurance fund that covers pensions for those with bankrupt firms guaranteeing their pensions - how are the pensions of the old steel workers doing. Paid out in full I'd imagine.

    But lets look forward - pensions don't recover and they are well underwater leaving pensioners facing a bleak prospect. What will happen - will those of us who are self employed, hence self pensioned and all others who paid into their own meager reserves be left standing while pensioners of bankrupt companies left shivering and cold? Naw, we are busy bailing out the jobs and the companies in a desperate effort to keep it all afloat so when it comes time to deal with the pensioners promised a comfy retirement it'll probably be us, the taxpayer, the common taters left paying the bill for all.

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  28. "But lets look forward - pensions don't recover and they are well underwater leaving pensioners facing a bleak prospect. What will happen - will those of us who are self employed, hence self pensioned and all others who paid into their own meager reserves be left standing while pensioners of bankrupt companies left shivering and cold? Naw, we are busy bailing out the jobs and the companies in a desperate effort to keep it all afloat so when it comes time to deal with the pensioners promised a comfy retirement it'll probably be us, the taxpayer, the common taters left paying the bill for all."

    I think I see a tiny light bulb.

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  29. We came out of the depression and formed FDIC and Social Security. Now that's not good enough - it seems we are trying to save it all.

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  30. 15. blert:


    Never forget that Soros ever makes his currency killings as SHORT SALES ONLY.

    Hence the destruction of the US dollar is his bet of a lifetime.

    The nations that gave him freedom are expected to impoverish themselves for the sake of his meglo-narcissism.

    The entire unregulated hedge fund naked short crowd has to be shut down for national security reasons.

    They intend to tank the dollar.

    By their actions you’d swear that they were fronts for KGB counter-financial warfare.

    They certainly have Soviet Mafia heavies at their beck and call.

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  31. 2 years ago there were over 100 big budget films at least partly created in Hollywood.
    In 2009, 3, according to Kevin James.

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  32. Countrywide sues AIG unit over its failure to cover loan losses

    The legal battle could provide a rare window into the collapse of the financial and real estate markets.

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  33. Representative Brad Sherman gets it!

    http://market-ticker.denninger.net/archives/887-Brad-Sherman-HE-GETS-IT!.html

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  34. Doug, the Soros of the world can't hurt the dollar. If they force it down our exports (thus, employment) go up. Good for our balance of payment, which causes the dollar to strengthen. They can only hurt a currency that is being supported by the government at an unnaturally high level.

    Trying to sink a "floating" currency is like taking a beachball out into the ocean and trying to hold it underwater.

    You can do it for awhile; but, eventually, you get tired, or hungry, or sleepy, or a shark eats your ass, or you get drowned by a hurricane or run over by a drug-crazed Ash in his sailboat, or something.

    At which point the beachball bobs back to the surface. And, you drag your tired, sore, waterlogged ass back to the shore.

    Of course, what will really happen is Soros will sell some poor mental deficient wannabee currency-destroyer his position after awhile, and be sitting at the tiki-bar drinking umbrella drinks and diddling the bartender's luscious young ass while Ash is bouncing his Hatteras off the that part of the mental midget's mindless, late-to-the-party, butt that the shark hasn't chewed off, and is hanging from a thread from his man-o-war, seared legs, barracuda-bitten toes.

    There's easier ways to make a living.

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  35. Damn, Rufus, that was poetic! And has the ring of truth, too.

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  36. In a Systemic failure, these fellows will not bail you out.

    PBGC is a federal corporation created by the Employee Retirement Income Security Act of 1974. It currently protects the pensions of nearly 44 million American workers and retirees in more than 29,000 private single-employer and multiemployer defined benefit pension plans. PBGC receives no funds from general tax revenues. Operations are financed by insurance premiums set by Congress and paid by sponsors of defined benefit plans, investment income, assets from pension plans trusteed by PBGC, and recoveries from the companies formerly responsible for the plans.

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