Summary numbers on Obama's budget
Topics: Stimulus
06 Mar 2009
From: "Ervan Darnell (by way of Ervan Darnell )"
Obama is making mistakes so fast I don't even have time to blog them
all.
I reduced to quoting Mankiw again, who has an excerpt from the
CBO:
Consistent with textbook
Keynesian models, they report a significant short-run effect but little
long-run effect. In fact, they estimate the long-run effect on GDP may be
slightly negative due to crowding out.
As for employment, the CBO estimates the bill will create 1.2 to 3.3
million jobs at the end of 2010. By the end of the President's first
term, the projected impact of the bill falls to 0.3 to 0.7 million
jobs. [1]
In other words, the government's own accounting arm (okay, Congress's
accounting arm) isn't even willing to defend the "stimulus" as
a useful idea in the long term. How bad must it really be?
Meanwhile, Obama is even further off the mark in his budget by:
Here (in red) [column 1] are the
growth forecasts used to put out the new Obama administration budget,
followed by the consensus forecast of a panel of "Blue Chip"
private forecasters (in blue [column 2], naturally) [2].
2009: -1.2% -1.9%
2010: +3.2% +2.1%
2011: +4.0% +2.9%
2012: +4.6% +2.9%
2013: +4.2% +2.8%
which is how he avoids increasing taxes, by engaging in the same sort of
unfounded optimism that Bush was derided for using.
During the period 2005 to
2007,[...]. What was the budget balance? According to
OMB
historical documents, the budget deficit averaged just under 2
percent of GDP during those three years.
Now compare these results to the
new Obama budget. For the moment, let's put aside
concerns about the economic forecast on which the budget is based and
take their figures at face value. [...] According to their numbers, under
their proposed policies, the budget deficit will average a bit over 3
percent of GDP during that time. [3]
How many times have I heard liberals complain about the Bush
deficit? Now they are embracing higher spending and higher
deficits. Even if we ignore the "stimulus" package
deficits, it's higher deficits in the long run.
The spending picture is just as bleak, and liberal hypocrisy has as
strong:
Federal Outlays as a Percentage
of GDP
Average over the past half century: 20.2 percent
In 2007, the year before the crisis: 20.0 percent
In 2009, from the Obama budget: 27.2 percent
Average 2010-19, in Obama budget: 22.6 percent
In 2019, last year of Obama budget: 22.6 percent
[4]
That's Obama's own rosy projections, assuming, for instance, health care
costs don't balloon out of control for his new medical spending
plans.
-----------------
[1]
http://gregmankiw.blogspot.com/2009/03/cbo-on-stimulus.html
[2]
http://gregmankiw.blogspot.com/2009/02/rosy-scenario.html
[3]
http://gregmankiw.blogspot.com/2009/02/what-is-deficit-hawk-to-do.html
[4]
http://gregmankiw.blogspot.com/2009/03/federal-outlays-as-percentage-of-gdp.html
====================================================
Ervan Darnell,
http://www.kelvinist.com
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