It is hard to take seriously his claim that he will cut old spending to make way for new spending and a lower deficit. As The Wall Street Journal points out, "[T]he 2009 budget deficit is estimated to be an eye-popping 12.7 percent of GDP, which once again dwarfs anything we've seen in the postwar era. The White House blueprint predicts that this will fall back down to 3.5 percent as soon as 2012, but this is based on assumptions about Washington that aren't going to happen."
One of the most absurd assumptions is that the new stimulus spending will be temporary.
Higher stimulus spending in the current budget becomes the new baseline for future budgets. Any cuts below that line will be condemned as heartless.
Every president promises to save money by eliminating waste and fraud. But the savings never materialize.
In Washington, one person's waste is another person's pork. Every dime spent by the federal government has well-connected advocates who swear the money is vital to the national interest. They line up to testify. Even if they didn't grease the palms of lobbyists and congressmen, their cries would be hard to resist. "This program will keep this poor woman, your constituent, alive! Would you be so cold as to deny her that?"
Congress appropriates the money, and then the permanent bureaucracy fights forever to preserve it. After all, its very life depends on it.
It's not that people in government aren't as good or competent as those in the private sector (though that may be true). The difference lies in the incentives and feedback they face. Bureaucracies have little check on what they do, no bottom line, no market prices for their "output." What they do have is an incentive to spend all the money budgeted or risk getting less next year.
As Milton Friedman used to say, no one spends other people's money as carefully as he spends his own. It is absurd to think the humongous constellation of federal bureaucracies is going to identify and root out "waste" in any significant way. It's just not in the nature of the beast.