Tuesday, April 21, 2009

Obama and His Credit Card

Obama's policy to spur economic demand is akin to asking every American to plunk down about 1/3rd of whatever their annual income is on a credit card. So if you make $75K, go out and spend about $25K on whatever you need. Maybe you can pay it later. And if you can't don't worry about it, I guess.

The chart above from the latest CBO budget and economic outlook is eye-opening. http://www.cbo.gov/doc.cfm?index=10014 There you can read in detail how Obama is paving the way for a future bankruptcy by resurrecting old and defunct Keynesian ideas. I think the chart speaks for itself in terms of what Obama's policies are. the interesting thing is the spike in the lines. It's up for revenue and down for spending. I especially love the spike down in the line for spending. Yep, Obama's a tightwad on government spending, starting in 2011 of course. The upward lines in revenue presume economic growth.
My prediction is that growth will be flat and the overall revenue line will, therefore, be flat. I also see no way the outlays will go down. Government spending is virtually guaranteed because it will not decrease significantly. We haven't gotten into his massive new "investments" as he builds our new utopian economy. Spending may spike down a little if they cease the bailouts but it will stay at an ongoing high level in the outyears.
Sometimes a picture tells a thousand words.

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