May 11 2009
Obama Pollyannish On Economy, Federal Deficits
President Obama and his administration have been living a delusion when it comes to the economy and the federal deficit. Interestingly enough, we have new deficit numbers from the White House which showed the CBO was much more accurate than the White House rosy estimates. The graph below illustrates the difference between the CBO and White House:
Now we get numbers from the White House predicting the deficit levels at the end of this coming September (end of the Federal Government Fiscal Year (GFY)):
A fresh estimate of the deficit showed it coming in at $1.84 trillion — representing a massive 12.9 percent of gross domestic product — in the current 2009 fiscal year that ends on September 30. A prior White House forecast released in February projected a deficit of $1.75 trillion, or 12.3 percent of GDP.
The fact is the CBO was much more pragmatic when it made its estimates because it was not being ridiculously optimistic on turning the economy and job market around. I would guess they have new estimates that show even worse deficit numbers.
The fact is the slow economy, with increasing unemployment, has shrunk tax revenues both corporately and individually. This is why tax cuts stimulate economic growth and deficit spending does not.
It was a fantasy the Dems in DC sold this country, that they could stimulate jobs and consumer spending through the bloated and ponderous government spending programs. As I have noted this week, that will not happen for months, and maybe not until 2010.Â
Which means these deficit numbers are going to get worse, along with the jobs numbers.
Update: OK, Team Obama is really spewing BS on the economy. We have had two consecutive quarters of -6.0+% economic decline. There is no indication this will get any better this quarter (end of July). See the following chart
But today the Obama administration is promising a fantasy +3.5% growth by the end of the year – which is a swing in GDP of 9.5% growth within 2 quarters!?!?!?
The Obama administration projected that the U.S. economy will expand at a 3.5 percent annual rate by year-end, a rebound that would be almost twice as strong as private forecasters expect.
In the economic assumptions of its 2010 budget request, President Barack Obama’s economic team didn’t change its 2009 predictions for a 1.2 percent drop in gross domestic product this year, slower inflation, higher unemployment and lower market interest rates than a year ago.
They are just ignoring reality, selling BS to America, pretending they are not on a path of destruction. How long can this fantasy be pulled over the country’s eyes? Â I doubt it will survive the July 4th weekend.
Of course, that requires a serious opposition that is not distracted by comedians, talk radio hosts, silly DHS reports, etc. The only issue of the day that will get traction is the one of lack of jobs. That is the issue hurting Americans across this land. Discussing anything else is a waste of time and opportunity.
Wasn’t this Obama guy a Senator or something the last 4 years.
So where does he get off on this “inherited” BS ?
Oh yeah, he was AWOL for the last 2 years. So who’s fault is that ?
He could have turn down the POTUS job.
We only have one President at a time, so right now these are Obama’s problems .. if he can’t fix ’em … give Joe Biden the job.
The worse the numbers, the shorter the admin.
Of course these numbers are the product of promising everyone, everything. Congress is supposed to be discussing health care this week. Wait til they get serious with telling folks there SS withholding from their paycheck is not going to be what it is now, it’s going to be about 28%. but everyone knows this is not ‘taxes’ it just insurance premiums.
right now the vast gullible Obamites are thinking the guvmint is gonna ‘give’ them free health coverage.
Wait til they wake up the sleeping dog.
Pardon my poor editing in the comment above.
I just listened to ‘the Ones’ speech about health care. I’ve heard people describe him as brilliant. He should read his speech and ask himself some questions. Health care costs are going up because the cost of everything goes up.
He wants a program that wants to make everything more available to everyone and he thinks the cost will go down?
The bit about reducing the amount of the rise in health care costs by 1.5% a year will ‘reduce’ costs? really?
Let’s do just one simple math problem to see how that works.
say health care cost $1000 this year and it is projected to rise by 8% next year and we reduce that to only a 6.5% increase. So that will ‘reduce’ costs? seems as if they will be $1065 next year which is MORE than this year, not less.
When someone tells me they are going to reduce my costs but the cost actually goes up, I’m gonna feel as if I’ve been lied to.
There is absolutely no possible way Obama’s growth numbers can happen with REAL GDP growth. I can possibly happen with absolute growth if we have a spike of massive inflation. The GDP could spike up as the cost of goods goes up but in constant dollars, it is impossible. The forecast of 3% growth in the 4th quarter is actually maniacal. It is a number put out there to reassure people who have no idea what they are being told, which is the majority of the population.
It is pretty much an impossibility. Who is going to buy the goods and services to grow GDP that much? Salaries are frozen, people are being laid off, people’s asset values are declining.
A cheaper alternative MIGHT be to eliminate all income tax withholding and estimated tax payments for one quarter. That would put a significant amount of money into people’s pockets and at this point not change the deficit much as it is through the roof anyway. The way you would do it is pick a month that has passed and say that all income earned that month is tax free, then you eliminate withholding/estimated tax in a future month to compensate. This prevents people from intentionally moving income to the tax free month but gives them the benefit of it. Say that all income earned in April was tax free and eliminate withholding in July to compensate. That gives people a wad of cash this summer to spend on things like a car or home improvements or whatever to give things a kick.
These numbers coming out of the Obama administration are pure nonsense.
Oh, and the mark of the narcissist is to never take responsibility for shortcomings so if the numbers don’t come in at greater than 3%, look for the administration to cast blame on someone else. You will be hearing a lot of “don’t blame us, it’s (insert goat here), fault”.
CP:
They did something like you suggest with the porkulus bill. Which wasn’t all pork. One provision extended the carryback of NOLs to 5 years from three. This allowed taxpayers to file amended returns for previous years 4 and 5 this year. It prevented people from moving income to the tax free years because they already occured.
It has raised the tax refunds this year to a point that the 2nd quarter GDP will be better than the 1st quarter. I doubt it will come in positive but is should be less than negative 3%. Which will be touted as a recovery. Any improvement in the 2nd quarter will be taken back in the 3rd quarter; leaving a very slow start to the 4th. No way we get 3.5% in the 4th quarter. Dream on.
Nonsense is a kind word. Lies, more lies, and damned lies would be more accurate.
Narcissist is also a kind word. I prefer filthy liar. If I’m trying to be social I just say that all the O’bumbler’s words have a short expiration date.
I wonder if they think the growth will come when they start spending that money. In other words, a fake growth comprised of borrowed money hitting the economy. Kind of like maxing out the credit card and calling it income.
Everytime I think about the growing debt and financial mess Obama is making…..all I have is a sick feeling in the pit of my stomache.
This is worse than we thought also:
California accuses Obama of allowing SEIU dictate stimulus policy
http://hotair.com/archives/2009/05/11/california-accuses-obama-of-allowing-seiu-dictate-stimulus-policy/
excerpt:
Officials in the governor’s office say a politically powerful union may have had inappropriate influence over the Obama administration’s decision to withhold billions of dollars in federal stimulus money from California if the state does not reverse a scheduled wage cut for the labor group’s workers.
The officials say they are particularly troubled that the Service Employees International Union, which lobbied the federal government to step in, was included in a conference call in which state and federal officials reviewed the wage cut and the terms of the stimulus package.
Frogg:
I have a friend who works for a city in California that is facing layoffs or pay cuts. I was told that the SEIU refused to take any pay cuts in the meetings and were promising “severe political damage” for any layoffs. They want to have their cake and eat it, too. Basically they want all non-union members laid off before any union members. They aren’t making any friends and it is the SEIU who is appearing greedy and arrogant, not management, in this case. But it looks like the union is going to lose a considerable number of jobs, mostly because of their knuckle-headed refusal to take any wage cuts. A temporary wage cut could save the jobs, they are refusing, so it is looking like union members will lose their jobs altogether.
Cutting off the nose to spite the face.
Here we go:
If you try to squeeze them too hard, they will simply move offshore.
GM is already building vehicles nobody wants, now they are going to build vehicles nobody wants at a price nobody can afford. Sounds like an idiotic union business plan to me.
Conditions have now gotten worse than what was predicted if there was no “stimulus.” This chart shows that the President’s own plan is failing to deliver.
Obama is a LOSER
What I’m afraid will happen is that the Obama adm and the Democrats will pass a bill that will penalize us heavily for buying a non-GM or non-Chrysler car. Best to buy a car just before this bill goes into effect.
Obama’s Dangerous budget Leaves GOP at a loss for words
http://www.washingtonexaminer.com/politics/Obamas-dangerous-budget-leaves-GOP-at-loss-for-words-44754742.html
excerpt:
Republican strategists have a problem. The scale of what President Barack Obama proposes to do to the American economy is so enormous, so far-reaching and so potentially disastrous that the opposition party is having a hard time describing it.
“How do you translate the numbers into something that people can grasp to represent the broader problem?†a Republican pollster asked in a recent conversation….
GOP message mavens are struggling with something that academics call “insensitivity to scope.†It affects us all; we can understand something on a small scale but have a difficult time comprehending the same thing on a massive scale.
Insensitivity to scope is a major obstacle to understanding the Obama administration’s $3.6 trillion 2010 budget. People simply have trouble understanding a number so big. A recent poll asked Americans how many million are in a trillion. Twenty-one percent of respondents got the answer right — it’s a million million. Most people thought it was a lot less.
How about:
Have cleaned out the Treasury, raided every piggy bank, and have blown the next 10 years income … and are promising to spend even more.
The sad part of this is how little people actually understand. People should be absolutely up in arms in outrage over this but they don’t understand.
Obama is spending more in real dollars than we spent on World War II. And we are getting exactly nothing for it. He is just raiding the treasury and the treasury of future administrations.
He is criminal.
Ah, here we go! Murtha Airport, the airport nobody uses, just got another $800,000 in stimulus funds. Whoopie!
What are they going to do? Hire flocks of people to cut the grass with scissors (like they do in China) or something?