Diary

CBO Analysis of President Obama's Budget Proposal 2010-2019

The Congressional Budgetary Office has just released its review of the President’s budget proposal: A New Era of Responsibility. The CBO numbers show us sinking faster, at the hands of Obama’s fiscal death squad, than we first thought.

Tapping into my inner Ross Perot, and my love of charts, here are some of the CBO’s latest estimates.

Deficit, Gross Domestic Product, and Publicly Held Debt.

Click on image to enlarge.

Obama’s original estimate had the deficit growing to $6.96 trillion from 2010-2019, a GDP of $22.86 trillion in 2019, and publicly held debt as a percentage of GDP of 67.2%, According to the Budgetary Office the deficit created by the President’s budget will exceed the original estimate of
$6.96 trillion by $2.3 trillion, rising to a total of $9.27 trillion in 2019, a GDP of $20.97 trillion, and publicly held debt as a percentage of GDP of 82.4%.

Here is a graphical representation of what is being projected.

Click on image to enlarge.

The most telling feature of this is the incredible increase in spending while suffering a severe depreciation in revenue the government will be taking in. As time goes on the estimated gap continues to widen which explains the sharp up turn in publicly held debt as a percentage of GDP.

From the CBO Director’s blog,

CBOProposed changes in tax policy would reduce revenues by an estimated $2.1 trillion over the next 10 years. Proposed changes in spending programs would add $1.7 trillion (excluding debt service) to outlays over the next 10 years. Interest costs associated with greater borrowing would add another $1.0 trillion to deficits over the 2010–2019 period.

In a nut shell, the President is making good on his promise of keeping taxes low for those making under $250 thousand a year. Although, while doing this he is engaging in absurd spending that does not correspond with the amount of revenue being taken in. Since the main source of government income is tax payrolls, which are being decreased while expenditures are increasing, heavier taxation of all wage earning quintiles will be required at some point in order to make up for revenue deficits.

Fear not though. The President is engaging in high level talks-with our brightest minds-discussing the contentious problems facing all Americans. Barack Obama Pimps the Bailouts on Jay Leno