Pay No Attention

It looks quite a bit like this:



The Messiah (AKA “The Wiz”) is going to offer us his budget on Tuesday night. The gist of the package has already leaked and, the kindest thing that can be said about it is, PTUI! He promises to “cut the deficit in half within four years.” I hope you aren’t impressed.

The deficit isn’t the debt. The deficit is the amount in a current year budget that spending exceeds revenue. As long as you are continuing to incur deficits you are increasing your debt.

Let’s put this proposal in context. Within 33 days of taking office he has virtually tripled the current year deficit. He’s now at levels that exceed the spending in World War II! At that time our very survival was imperiled. Today we’ve got a recession that still hasn’t reached the levels of 1982 or 1976 in terms of loss to GDP, inflation, unemployment or market collapse. The current year’s over-spending looks to fall within the range of $2.4 trillion, but we’ve got seven months left in the year and no end in sight.

The proposals he admits to so far reveal continuing hand-outs to the non-productive segments of our society in the next two years with deficits ranging at “only” about a trillion bucks a year. Finally by year four, he touts a “reduction” through his successful budget cuts to just over half-a-trillion. That is not a noteworthy achievement using any math format I can think of.

How will he achieve this “miracle”? He’s going to cut military spending, of course and save $190 billion a year. If you can’t find any way to make that amount into five times that amount without smoke and mirrors, we are in agreement. And he’s going to tax the “wealthy” a lot more.

Any reputable economist will be able to explain that increasing taxes on pseudo-wealthy folks will quickly drop them into the not-wealthy ranks. It will reduce their investments in business and stifle any entrepreneurship efforts. It will simultaneously eliminate any funds in private hands for investments in the market or savings. Hard to see how that either generates revenue increases or an economic recovery.

The only difference I can see between that Wizard, depicted above, and President Obama is that the short guy in Oz was really benevolent at heart and his solutions were economical and centered on individual growth and responsibility rather than government handouts.