Recently, I discussed the central economic policy of President Obama's budget and accompanying Presidential budget message. What drives economic recovery and growth according to the President and his budget is federal spending, deficits and debt, the fundamental tenets of the Keynesian economics that arose in the 1930s.
If you agree with that, then President Obama is your man for reelection in 2012. If you think that's nuts, however, then the message of the budget to you is that America needs a new President.
But the budget and accompanying Presidential rhetoric includes several other messages as well.
One message is that the President and the Democrat Party will not cut federal spending. The President proposes in this budget to increase federal spending by $1.5 trillion on net over the next 10 years, with the federal government to spend $47 trillion over that time! By 2022, President Obama's budget proposes to spend $5.82 trillion in that one year alone, virtually double the 2008 federal budget of $2.983 trillion, the year before Obama took office.
This is in the context of the national debt held by the public roaring to $20 trillion by 2022, as proposed in the President's own budget. That compares to $5.8 trillion in 2008. The gross federal debt, which includes the money the taxpayers owe in the Social Security trust fund and similar federal debts, which will have to be paid, is projected in Obama's own budget to total nearly $26 trillion by 2022, over 100% of GDP that year. But even in this exploding national debt crisis, the Democrats will not cut spending.
Yet, the President insists in his budget message, "Meeting the spending targets in this Budget meant some very difficult choices: reforming, consolidating, or freezing programs where we could; cutting programs that were not effective or essential and even some that were, but are now unaffordable; and precisely targeting our investments. Every department will feel the impact of these reductions as they cut programs or tighten their belts." That is how the President describes a budget that increases spending on net by $1.5 trillion, spending $47 trillion over the next 10 years. This shows how far President Obama's soft, smooth rhetoric can be from reality. Remember that the next time you hear him talk.
Similarly, the President says in his budget message, "[T]his budget will cut the deficit by $4 trillion over the next decade." But that includes $2 trillion in deficit reduction already enacted into current law under the Budget Control Act of 2011 and other measures last year. The President can't claim savings for his new budget that were already enacted into law last year.
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