This chart puts our budgetary situation as clearly as anything I’ve seen.
And keep in mind that the projections in the President’s budget are almost certainly too optimistic, assuming economic growth significantly higher than we’ve been experiencing or historically have any right to assume.
As Keith Hennessey remarks,
Three things should jump out at you from the future portion of this graph:
- The red and blue lines diverge enormously, and the gap grows over time.
- The blue line is flat while the red line slopes upward.
- Both the red and blue lines shift upward significantly.
The first means larger and larger deficits as far as the eye can see—something financial markets simply will not allow to happen. The second means that federal spending is out of control, not just last year or this year, but as far as the eye can see. The third means that the federal government is playing, and will be playing, a much greater role than it has in the past. That entails that private enterprises will be playing a much smaller role than they have in the past. Since those private enterprises create jobs, create new technologies, and pay for the entire structure, that’s not a good thing. Megan McArdle: “I’m starting to think that it’s time to panic.” Or as Andrew Sullivan put it: “Obama To The Next Generation: Screw You, Suckers.”
Dick Morris points out the damage that the Obama administration has already done. He has a chart that shows how much change, and how little hope, Obama has brought to a variety of economic variables. Look at the whole thing. Some highlights: Since January 2009, when Obama took office,
- The price of gasoline is up 70%.
- The price of West Texas crude oil is up 136%.
- The price of gold is up 60.5%.
- The price of corn is up 78%.
- The price of sugar is up 165%.
- Unemployment is up 24%.
- Black unemployment is up 25%.
- Real household income is down .7%.
- The number of food stamp recipients is up 35%.
- The number of long-term unemployed is up 146%.
- The number of people living in poverty is up 9.5%.
- The money supply (M1) is up 18%.
- The national debt is up 32%.
- The U.S. has fallen from 5th to 9th on the Economic Freedom index.
Here’s my interpretation of the President’s budget: “Let’s keep doing exactly what’s produced those results!”
Meanwhile, the administration won’t even send an economist to Capitol Hill to defend the stimulus program.
Here’s another look at just the spending side:
Richard Fernandez has it exactly right. “Obama’s budget isn’t in trouble with Congress. It’s in trouble with arithmetic.”