Spending And Deficits Are Trouble
July 28, 2016 at 4:25 p.m.
By Gary [email protected]
They - whoever "they" are - called his tax and spending policies "Reaganomics."
But after that, "they" never called it Bushonomics under the first Bush or Clintonomics under Clinton or Bushonomics under the second Bush. But I think now more people should start using the term Obamanomics.
And I'm afraid Obamanomics could be some bad ju-ju.[[In-content Ad]]All that talk of fiscal responsibility we heard during the campaign seems to have flown right out the Oval Office window.
Certainly these are trying economic times, but does that mean we have to break the bank with runaway government spending?
Lots of economists think that deficit spending as a means to pull the country out of a recession is a bad idea. Economists also take issue with the Obamanomics claim that 150,000 jobs have been created in the first 100 days following the $787 billion stimulus package enacted earlier this year.
Especially since the labor department keeps talking about job losses each month.
Economists also are more than a bit skeptical about President Obama's claim that 600,000 jobs will be created in the next 100 days.
Mickey Levy, chief economist at Bank of America, for example, told NPR, "I don't buy such rules of thumb. I think they're, frankly, misleading. I don't think there is any way to prove or disprove the numbers. I would say that the magnitude of deficit spending, which is unprecedented, and the fact that it's being financed by our central bank basically printing money, should increase demand and it should increase jobs."
Levy added, "I do applaud the administration for its objectives of trying to stabilize and its role in encouraging people to look forward to recovery, but I find such estimates about jobs saved or jobs created a little on the silly side."
Levy also echoed my sentiments regarding the whole notion of "stimulus." I have always contended that the US economy is so large that it eventually will work itself out of a recession regardless of what the government does.
Levy told NPR it would not be unusual for the economy to rebound from a deep recession like the one we're in now and produce 3.5 million jobs over the next two years.
That's what Obamanomics is supposed to do. But Levy says there's no way of knowing whether the stimulus package is what actually will put people back to work.
So we have all this deficit spending and no finite way to quantify if it's doing any good.
And the public is becoming wary.
President Obama's disapproval rating on the economy has risen from 30 percent in February to 42 percent, according to a Gallup poll completed May 31.
What to do?
Go to the podium and announce "Pay-Go." That's where the government can't enact a program or tax cut without paying for it somewhere else in the budget.
I fully support the president's embrace of a pay-as-you-go policy. I think it's a wonderful idea.
Problem is, he's already ran up a $1.8 trillion deficit this year on top of a half trillion deficit from the year before.
Pay-Go does nothing to reduce the deficit. It - in theory - keeps the deficit from growing larger, which is a good thing.
But understand - it only applies to new spending or tax cuts. There are already enough programs in place to gobble up all the tax revenue the treasury has and then some. I foresee budget deficits going forward each year for a long, long time.
And speaking of revenue, what will Obamanomics do to the stream of revenue going into the treasury?
Revenue in 2009 is forecast - and I would say wildly optimistically forecast - to be down $400 billion from 2008.
The numbers are interesting. All these are in trillions of dollars.
2005 2.153
2006 2.407
2007 2.568
2008 2.524
2009 2.156
2010 2.332
Following are the corresponding deficit numbers for those years, again in trillions of dollars.
2005 .381
2006 .248
2007 .160
2008 .458
2009 1.841
2010 1.258
Remember, 2009 and 2010 are forecasts, which, I believe are crazy optimistic.
Deficits like this and we're talking national health care? How in the world are we going to Pay-Go that one?
I think when all is said and done, Obamanomics will have the net effect of increasing the federal deficit, while decreasing revenue to the treasury.
Is it just me or shouldn't that be the other way around?
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They - whoever "they" are - called his tax and spending policies "Reaganomics."
But after that, "they" never called it Bushonomics under the first Bush or Clintonomics under Clinton or Bushonomics under the second Bush. But I think now more people should start using the term Obamanomics.
And I'm afraid Obamanomics could be some bad ju-ju.[[In-content Ad]]All that talk of fiscal responsibility we heard during the campaign seems to have flown right out the Oval Office window.
Certainly these are trying economic times, but does that mean we have to break the bank with runaway government spending?
Lots of economists think that deficit spending as a means to pull the country out of a recession is a bad idea. Economists also take issue with the Obamanomics claim that 150,000 jobs have been created in the first 100 days following the $787 billion stimulus package enacted earlier this year.
Especially since the labor department keeps talking about job losses each month.
Economists also are more than a bit skeptical about President Obama's claim that 600,000 jobs will be created in the next 100 days.
Mickey Levy, chief economist at Bank of America, for example, told NPR, "I don't buy such rules of thumb. I think they're, frankly, misleading. I don't think there is any way to prove or disprove the numbers. I would say that the magnitude of deficit spending, which is unprecedented, and the fact that it's being financed by our central bank basically printing money, should increase demand and it should increase jobs."
Levy added, "I do applaud the administration for its objectives of trying to stabilize and its role in encouraging people to look forward to recovery, but I find such estimates about jobs saved or jobs created a little on the silly side."
Levy also echoed my sentiments regarding the whole notion of "stimulus." I have always contended that the US economy is so large that it eventually will work itself out of a recession regardless of what the government does.
Levy told NPR it would not be unusual for the economy to rebound from a deep recession like the one we're in now and produce 3.5 million jobs over the next two years.
That's what Obamanomics is supposed to do. But Levy says there's no way of knowing whether the stimulus package is what actually will put people back to work.
So we have all this deficit spending and no finite way to quantify if it's doing any good.
And the public is becoming wary.
President Obama's disapproval rating on the economy has risen from 30 percent in February to 42 percent, according to a Gallup poll completed May 31.
What to do?
Go to the podium and announce "Pay-Go." That's where the government can't enact a program or tax cut without paying for it somewhere else in the budget.
I fully support the president's embrace of a pay-as-you-go policy. I think it's a wonderful idea.
Problem is, he's already ran up a $1.8 trillion deficit this year on top of a half trillion deficit from the year before.
Pay-Go does nothing to reduce the deficit. It - in theory - keeps the deficit from growing larger, which is a good thing.
But understand - it only applies to new spending or tax cuts. There are already enough programs in place to gobble up all the tax revenue the treasury has and then some. I foresee budget deficits going forward each year for a long, long time.
And speaking of revenue, what will Obamanomics do to the stream of revenue going into the treasury?
Revenue in 2009 is forecast - and I would say wildly optimistically forecast - to be down $400 billion from 2008.
The numbers are interesting. All these are in trillions of dollars.
2005 2.153
2006 2.407
2007 2.568
2008 2.524
2009 2.156
2010 2.332
Following are the corresponding deficit numbers for those years, again in trillions of dollars.
2005 .381
2006 .248
2007 .160
2008 .458
2009 1.841
2010 1.258
Remember, 2009 and 2010 are forecasts, which, I believe are crazy optimistic.
Deficits like this and we're talking national health care? How in the world are we going to Pay-Go that one?
I think when all is said and done, Obamanomics will have the net effect of increasing the federal deficit, while decreasing revenue to the treasury.
Is it just me or shouldn't that be the other way around?
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