President Obama’s Budget for fiscal year 2010 (for some reason titled “A New Era of Responsibility”) in a nutshell:
- Department of Defense and international expenses (spending on wars and occupations) will go up from $666 billion to $673 billion (under President Bush it grew from $316 billion to$666 billion)
- Other appropriated programs will go up from $613 billion to $695 billion (under President Bush it grew from $298 billion to$613 billion)
- Social Security expenses will go up from $662 billion to $695 billion (under President Bush it grew from $406 billion to$662 billion)
- Medicare expenses will go up from $425 billion to $453 billion (under President Bush it grew from $216 billion to$425 billion)
- Medicaid expenses will go up from $259 billion to $290 billion (under President Bush it grew from $117.9 billion to$259 billion)
- Other mandatory program expenses will drop from $673 billion to $571 billion (under President Bush it grew from $290 billion to$673 billion)
- Net interest will go up from $139 billion to $164 billion (under President Bush it dropped from $222.9 billion to$139 billion)
- Disaster cost will go up from $4billion to $11 billion (under President Bush it went from $0 billion to$4 billion)
The total of proposed federal government expenses for FY 2010 is $3.552 trillion. President Obama is planning to spend more on virtually every government program, except for other mandatory programs.
During and after his campaign President Obama talked a lot about “tough choices” we will all have to make. I would like him to tell us where in this budget he made a single tough choice. He promised to go through the budget line by line and eliminate wasteful programs. Where did he do that in this budget? He is even proposing to spend more on wars and the military. A budget that President Bush inflated by more than 100% from $316 billion to$666 billion! I would like President Obama to answer one simple question: Why?
The president’s budget estimates tax receipts of $2.2 trillion, $2.4 trillion, $2.7 trillion, and $3 trillion for 2009, 2010, 2011, and 2012, respectively. These estimates are laughable. My projections for tax receipts, as I explained in The Coming US Tax Receipt Shortfall:
Federal tax receipts will fall to $2.25 trillion in 2009, to $2 trillion in 2010, to $1.75 trillion in 2011, and to $1.5 trillion in 2012.
Meanwhile there is no indication that government expenses will fall. Even with the current, now completely obsolete, budget estimates for government expenses, the Federal deficit would develop as follows:
- $850 billion for 2009
- $1 trillion for 2010
- $1.3 trillion for 2011
- $1.7 trillion for 2012
These are very optimistic figures. It wouldn’t be surprising if actual figures turned out to be around double or triple those numbers, unless a true change in policy were to occur.
Now that we have updated figures on coming expenses it’s time to update the deficit predictions:
- $1.65 trillion for 2009
- $1.6 trillion for 2010
- $1.95 trillion for 2011
- $2.2 trillion for 2012
If President Obama keeps spending like this, and really wants to cut the deficit in half by 2013, he will at one point be faced with no other choice but to raise taxes on all Americans, rich, middle class, and poor. This is of course nothing new. Taxes have been rising in the US for the past century.
It is certainly disappointing that Obama has now undoubtedly expressed his intention of continuing the irresponsible policies of the Bush era. But it is not really surprising. Obama has already promised us more of the same during his campaign and before taking office.