Obamanomics: Deficit Has TRIPLED, and Will Likely Increase by at Least $1 Trillion a Year

By the White House’s own estimates, the deficit over the next decade will increase by not just $1 Trillion, but by $1 Trillion EACH YEAR! That’s a conservative estimate, as most experts are beginning to feel that under Obama’s “leadership” our deficits will increase by nearly double that.  Russia and the Soviet Union already tried this and failed.  WHY ARE WE LETTING THIS COMU-SOCIALIST AND HIS DEMOCRAT MINIONS TRY IT AGAIN HERE IN AMERICA?

THEY MUST BE STOPPED AT ALL COST.

With this new admission of debt guilt, shouldn’t this pretty much drive the last nail in the coffin of Health Care Reform/Takeover?  Not to mention Cap-and-Tax.

Our economy and nation can’t hide behind fake figures and phony numbers for much longer.  Not with the staggering debt Obama is piling on to the next 10 generations.  It’s like Michael Moore trying to hide behind a blade of grass.  As the rate of decay of our economy increases at a blistering pace, pretty soon everything we own will be worthless, our currency will be worthless, and no one will earn enough money to buy even a loaf of bread.  Anyone remember pre-war Germany?  A wheelbarrow full of D-Marks wouldn’t buy a loaf of bread.  We will all be peasants.

The scene towards the end of “History of the World, part 1” is especially poignant here.  As the peasants are storming the castle, the king is told by his adviser that “the peasants are revolting!”  The king ignorantly and snobbishly replies “They certainly are!”  Dictator Obama and the liberal rats in Washington better wise up before they find themselves roasting on a spit.

http://www.ibtimes.com/articles/20090824/cumulative-deficit-estimate-for-next-decade-increasedtrillion-since-may.htm

Cumulative Deficit Estimate for Next Decade Increased $2 Trillion… Since May

By Trader Mark
Posted 24 August 2009 @ 07:45 am ET

I guess we’ll post this along the lines of “if you pass the stimulus plan, unemployment will only go to mid 8%” or “if you don’t give Goldman Sachs the TARP money, the world will end immediately” and other such incorrect mythologies. Long time readers know where I stand on government figures which are backwards looking; not to mention guestimates of the future… if the guess from government is correct THIS time around (chuckle here) the budget deficit for the next decade now will stand at $9 Trillion.

Last time government chimed in with an estimate? Way back… 3 whole months ago; when they said the deficit would be $7.1 Trillion. Missed it by *that* much. That’s ok, government estimates are made to be broken. Usually I try to give them more than 3 months to be wrong by a factor of 27% but I think within government circles that accuracy (+/- 25%) is considered “dead on”, and reason for promotion.

$9 Trillion over a decade is just under $1 Trillion a year. Consider until this year (partly by phony accounting for wars and financial rescues that were not counted in the budget by the former administration) the largest annual budget deficit we ever had was under $500 Billion. [Jul 28, 2008: US Budget Deficit to Half a Trillion] This year we have an excellent chance of $1.6 Trillion. Heck we just put up a $180B month [Aug 12, 2009: July Budget Deficit $180.7B]. With the economy only slowly recovering in 2010 (and subject to a double dip with higher inflation), and the main drivers of tax revenue (employment, real estate, consumption) not expected to be recovering much next year I think we have an excellent chance for another $1.5ish Trillion year in ’10. Especially after Obama and the Dems number fall this winter as the “Main Street” economy is not quite so awesome as the “Wall Street” economy and plans for Stimulus 8.0 are drawn up. Plus the next housing program give away; the next cars program; and helping the states out with their budget shortfalls in 2010. Oh yes, increased food stamps, another 13 week extension of long term unemployment, increased welfare for those who still fall out of unemployment, and I am sure a few other things I am forgetting. (cursory green shoots inserted here)

Now the good thing by layering on debt to inflate asset values AND stoke “prosperity” [Jun 5, 2009: 1 in 6 Dollars of Income Now Via Government; Highest Since 1929] [Jul 30, 2009: Cash for Clunkers a Bit Hit, Government Asks “What Can we Buy You Next?”] , is you might punish your currency month after month, but it should drive incremental tax revenue gains from stocks and (gosh) even real estate as more (ahem) “wealth” is created. Not in real terms, but in nominal… and most Americans only live in a nominal world. So if the currency drops 15% and your government is able to stoke some combination of your 401k, and house up 15% – you really gained nothing but you’ll feel great because most people only look at their 401k and housing values, without understanding the currency. Now if you happen to be one of those American souls who simply is trying to get by in a harsh world, and you don’t happen to own stocks or real estate? Well, you’re job then is to pay for your life with 15% more of a devalued currency – making everything 15% more expensive in real terms. But really, it’s not about you – we have a financial and political elite to take care of and only by coming together as one can we do it. Reverse Robin Hood style. Remember, inflation is GREEEEEEAT! (as long as your are not in the bottom half) [Aug 18, 2009: Bloomberg Opinion – Deflation Theory is Lemon We’ve Been Sold]

Even more funny is that the nominal increase in tax revenue (created by government shuffling money from the future to now to create “GDP growth”) might put a dent in near term deficits … by pathetically adding to long term deficits. Remember – in a nominal world there is no cost benefit analysis; only benefit benefit analysis. We get our goodies today, and the costs get stuffed “somewhere else” for “someone else” to deal with. Listen to the masses with the siren call of “free government money, I want mine!” not realizing they are taking from themselves… with interest. That’s called living in a nominal world. And not being real.

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(Don’t miss this last paragraph.  This sums up why our money and economy will be worthless in the very near future if we don’t STOP THIS INSANE SPENDING AND ALL OF THESE SENSELESS BAILOUTS.  Obama and the democrats are killing our country.  We MUST stop them, any way we can.)

America is (but not for long) still under 100% debt to GDP. We are on a clear path to surpass Japanese debt to GDP (a staggering 200% debt to GDP) within the decade. US Debt Clock (as of Aug 09) read $11.7T; GDP is say $13.5T. Throw the next decade’s (conservative) $9T on top and you are at a juicy $21T debt circa 2019 aka 150% of GDP. I think that’s conservative – we are overachievers and will “beat” that. Since the government figures just were raised $1.9T in 3 months you can see how quickly we could jump from $21T in 2019 to (some higher number). Once we pass 200% debt to GDP, it will all be uncharted territory for a modern developed country. Our annual growth rate of debt is now trouncing Japan, so it’s the story of the tortoise and the hare. Although in this case you don’t really want to be the hare. I also conveniently left out the $40T in unfunded liabilities (i.e. IOUs) sitting in Medicare. I’ve also left out the healthcare “reform” – considering the original estimates of Medicare were off by a factor of 10x within the first year of it’s implementation… well, you can do the math. And just for kicks let’s throw in the $1 Trillion pension disaster that is looming (currently being hidden by… accounting tricks) [Mar 4, 2009: Bloomberg – Hidden Pension Fiasco May Foment Another $1 Trillion Bailout] That’s just sort of icing on the cake at this point.

Did I mention how the debt will increase even more quickly if government debt interest rates permanently jump up as the world sees the increasing risk of investing in America?

Stanford University economics professor John Taylor, an influential economist, told Reuters Television Friday the U.S. budget deficit poses a greater risk to the financial system than the collapse in commercial real estate prices.”If that gets out of control, if interest rates start to rise because people are reluctant to buy all that debt, then that can slow the economy down. So, that’s the more systemic concern I have,” Taylor said.

Via Bloomberg

• The U.S. government’s long-term budget outlook is darker than expected, with projected deficits over the next 10 years totaling $2 trillion more than had been forecast, according to an Obama administration official.
• A White House budget review set for release Aug. 25 will show cumulative deficits over the next decade amounting to $9 trillion, up from $7.1 trillion that the administration predicted in May, the official said on condition of anonymity because the figures haven’t been made public.

Really a trillion here, a trillion there – what does it matter. All I know is many Americans were gleeful per my review of national news this weekend they got new cars. (granted many now have a new layer of debt) Others are gleeful they can get their first house via money trees grown in D.C.. (and when many default on their close to no money down mortgages in 3 years – it will be ok, no skin in the game after all) Citigroup and Bank of America bondholders are happy that they never had to take a hit despite the biggest crisis in 80 years. Goldman Sachs is happy they got fulfilled dollar for dollar on AIG counterparty risk. AIG is just happy to be in existence and seeing its stock surge 20% a day, subsidized by US taxpayer. And we’re all happy these actions plus more are making the stock market inflate. It’s really all about happiness after all. Can we put a price on that?[Mar 31, 2009: Financial Rescue Pledges Now $12.8 Trillion] Hey! That was supposed to be a rhetorical question!

[May 29, 2009: In 1 year, US Taxpayer on the Hook for $55,000 More per Household] Stop it! There is no price too high to bear for happiness of our people and concurrent transfer of wealth from the middle to our financial oligarchs. Get with the program!

For another source to fact check the Administration:

• The nonpartisan Congressional Budget Office has estimated deficits between 2010 and 2019 will total $9.14 trillion.

Considering the CBO thought we’d be $1.1 T in hock for 2009 in (one third of the way into the fiscal 2009 year) December 2008 – they only understated the reality by 45% …Now we want them to guestimate how bad things will be not 1 year but 10 years out, so let’s take it all with multiple grains of salt. If they are only off in the decade by the same amount they were off in this 1 year it is really +/- $5 Trillion over 10 years. And since no one really knows how it will turn out, the best course of action is to continue policies as is and buy happiness (not to mention higher equity prices). “Someone else” (benefit benefit) analysis will worry about these things in 2019.

[May 23, 2008: David Walker on CNBC this Morning]

[Mar 26, 2008: Annual Spring Entitlement Warning Falls on Deaf Ears]

[Nov 23, 2008: David Walker in Fortune Magazine]

[Jun 12, 2009: NYT – America’s Sea of Red Ink was Years in the Making]

[Aug 5, 2009: Federal Tax Revenue Plummeting]

The Well Dressed Hypocrite

While pretending to be concerned about the poor and disadvantaged, Mrs. m-O-ssiah ONCE AGAIN displays both her and the liberal hypocrisy.  She wears expensive clothes payed for with taxpayer dollars plundered INVOLUNTARILY from American taxpayers and gets nothing but adoration from the liberal press.  Sarah Palin wears clothes paid for by DONATIONS of WILLING DONORS and is castigated to the ends of the earth.  Ah, the ruling class.  Don’t blame me.  I voted for the lesser of two evils.
http://www.nydailynews.com/lifestyle/fashion/2009/05/01/2009-05-01_first_lady_michelle_obama_kicks_in_own_foot_feat_for_fashionistas_lanvin.html