Sensational review of Obama budget

The Obama Budget is an interesting read.  First of all, I have trouble with the ten-year budgets that he has instituted.  Projections of 10 years, when next year’s congress will be newly elected and will scoff at this year’s budget, don’t make much sense.  “Look, I’m 62 and have worked hard for 50 years.  So you can expect me to work hard for the next 50.”  But that aside, let’s take a look.

            $210 billion reduction over the next ten years is due to reduced interest payments on the public debt.  Presently interest is historically low, nearly zero.  And expanding government debt is sure to raise interest (Europe) or kill the economy with a perpetual recession(Japan).  Given America’s demand for growth, i.e. loose money, how much chance of lower interest do you think  there is? 

            $580 billion  in debt reduction is due to raising taxes on the rich termed “loophole closings”.  I ask you to list, say ten “loopholes”, in the current tax code.  You can’t deduct hardly anything except mortgage payments and contributions.  Maybe Obama thinks manufacturing expenses are loopholes.  At any rate it calls for limiting the amount of deductions you can take, and jacking up business taxes to 42%.  They are already the world’s highest at 25%.  Banks and financial institutions get hit with $100 billion in new taxes. And he wants capital gains rates to go up 8%. And, static model employed, businesses and rich will not likely change their behavior. (Ahem!!) Next Obama wants to cap your 401K and IRA.  The cap is higher than I’ll ever see--$3 million—but understand that you can take your pension as a lump sum and roll it over into an IRA. (you probably won’t get to $3M by saving $2250 per year) A lot of senior executives would max this out. Just remember this.  A government that considers it morally correct to tell you how much money people can save is a government that will confiscate without qualms and will never save anything themselves.

            Medicare spending gets cut $400 billion.  This somehow reminds me of the philosophy of my renters.  Just stop paying the rent or the doctor bills and say you have saved $400 billion. This ain’t hard.  I could just walk out of the grocery store and if someone claims I shoplifted, I would just say I’m saving my grocery money. Anyway, cutting MC should really comfort retirees.

            $200 billion gets cut from mandatory spending (like federal retirement benefits) and $200 billion from discretionary spending like national defense.  Once again, just refuse to pay the bill, and claim it is saving. 

            Finally Social Security gets chained CPI calculations which reduces the cost of living adjustments and “saves” $230 billion.   Are you seniors getting the idea that Barack doesn’t give a darn if you die hungry?  Well seniors vote +15% Republican you know. 

            So there you have it, the big Obama budget which likely won’t pass even among Democrats. Say, I have a novel idea.  Lets go back to the 2006 budget that was almost balanced, add 12% for inflation, and watch the return of prosperity.  (NOT entirely so simple since we have doubled the debt since then, but we had 4.3% unemployment then)