Sunday, May 03, 2009

The Obama Debt

Under the current president, our deficit and debt are growing greatly. He says he cares, but what is actually happening?

First off, definitions: the deficit is the difference between the amount of money the government receives and the amount it spends every year. In other words, it is how fast the nation goes into debt. The debt is how much the country currently owes to its creditors.

It is also worth noting that a $600 zillion spending bill doesn't mean the deficit this year increased by $600 zillion. Often, those dollar amounts are spread out over several years (usually as much as 10).

Now some context:
Deficit in 2007 = $161 billion
Deficit in 2008 = $455 billion

The projected deficit in 2009 when the budget was made was $482 billion. However, the economy has faltered since, and legislation passed late last year has modified those numbers. When Obama took office in January, the Congressional Budget Office predicted that:

Deficit in 2009 = $1118 billion

You'll often hear Obama quote $1.3 trillion for this amount that he "inherited" from Bush (and a Congress of which Obama was a member of the majority party). Now that the economy has worsened and bills like the ARR and Omnibus have passed the new projections from the CBO says:

Deficit in 2009 = $1845 billion

Now for the irony. The ARR proposed to increase the deficit by an average of $79 billion annually. One week later, Obama announced that he planned to cut the deficit in half by the end of his first term, 2013. Translation: in four years we will be going in to debt slower than we are this year. Additionally, he commanded his cabinet within 3 months to come up with ways to save $100 million. Unfortunately, in that same amount of time the government will have gone $461 billion further into debt, or 4613x the amount he is proposing to cut back.

What bothers me is the political game he is playing. After increasing the deficit quickly, he says he wants to decrease it gradually. After proposing great increases in spending, he brags about modest cutbacks.

The question you have to answer is, "Is he doing the best he can under the economic circumstances that surround him?" I suppose that's a fair question.

U.S. Treasury
Congressional Budget Office
Washington Post

1 comment:

  1. Those are some mighty big numbers. 100 million is not so big. You've probably seen this.


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