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The Obama Fisc

January 27, 2010
WSJ
1/27/2010

Spending religion arrives a year, and trillions of dollars, too late

[Barack] Obama’s touted spending freeze for some domestic agencies is the politics of gesture. It would apply to only 17% of the budget, and these programs have already had a 22% increase in their annual appropriations in the past two years, and another 25% increase including stimulus. As for the deficit, CBO shows that over the first three years of the Obama Presidency, 2009-2011, the federal government will borrow an estimated $3.7 trillion. That is more than the entire accumulated national debt for the first 225 years of U.S. history. By 2019, the interest payments on this debt will be larger than the budget for education, roads and all other nondefense discretionary spending. If this borrowing were financing defense investments or tax rate reductions to spur the U.S. economy, we wouldn’t be worried. But most of this money is going to transfer payments to individuals, or subsidies to home buyers and inefficient businesses that do little for wealth creation. As it always does, CBO forecasts that deficits will decline in the later years of its 10-year budget window. But this forecast depends on assumptions about Congress so fanciful that James Cameron couldn’t make them up. … If the President and his party really are serious, they can do more than promise a spending freeze after 2012. They can stop spending more now: Drop the health-care bill, cancel the unspent stimulus spending from last year, kill the $150 billion new stimulus that has already passed the House, and bar all repaid bailout cash from being re-spent. Everything else is marketing.

The story continues …..

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