The left told us that Obama’s was a historic presidency. And they were right: he just smashed his own record for massive and totally unsustainable deficits.
Budget deficit sets record in February
By MARTIN CRUTSINGER (AP)
WASHINGTON — The government ran up the largest monthly deficit in history in February, keeping the flood of red ink on track to top last year’s record for the full year.
The Treasury Department said Wednesday that the February deficit totaled $220.9 billion, 14 percent higher than the previous record set in February of last year.
The deficit through the first five months of this budget year totals $651.6 billion, 10.5 percent higher than a year ago.
The Obama administration is projecting that the deficit for the 2010 budget year will hit an all-time high of $1.56 trillion, surpassing last year’s $1.4 trillion total. The administration is forecasting that the deficit will remain above $1 trillion in 2011, giving the country three straight years of $1 trillion-plus deficits.
The administration says the huge deficits are necessary to get the country out of the deepest recession since the 1930s. But Republicans have attacked the stimulus spending as wasteful and a failure at the primary objective of lowering unemployment. [Editorial note: The Republicans are right, and the American people know it. The stimulus is a gigantic porker which was recently upgraded as costing a massive $862 billion from the previous estimate of $787 billion. But the real cost is actually $3.27 TRILLION!!! And contrary to Obama’s utterly false claims, only SIX PERCENT of Americans believe that the stimulus has created any jobs at all].
The administration defends the economic stimulus bill that Congress passed in February 2009 with a pricetag at the time of $787 billion as the right medicine to get the economy back on its feet. President Barack Obama has said even more is needed to battle an unemployment rate that remained stuck in February at 9.7 percent. [Editorial note: When Obama was elected, unemployment was at 6.6%. He promised that his stimulus would prevent unemployment from reaching 8%. The stimulus failed by Obama’s own standard. To try to explain away the failure of his policy, Obama created the nonexistent category of “saved jobs.” But economists point out the following: “One can search economic textbooks forever without finding a concept called `jobs saved.’ It doesn’t exist…”]
The White House says that job creation will remain a top priority, hoping to convince voters that Obama did not spend too much time during his first year in office trying to get Congress to pass health care reform. [Allow me to editorially interrupt this spin to point out that ObamaCare is the top priority, with Obama hoping to convince liberals that they need to pass this incredibly unpopular bill no matter how many Democrats lose their seats in order to “maintain a strong presidency.” And in point of fact, they have done little else this entire year].
The government’s monthly budget report showed the record $220.9 billion deficit for February reflected outlays of $328.4 billion and revenues of $107.5 billion. The February receipts marked the first time that revenues are up compared with the same month a year ago since April 2008. Revenues had fallen for 21 straight months as the recession cut into both individual and corporate income tax payments. [Editorials note: And yet Obama is selling his healthcare takeover as “deficit neutral” on the incredibly risky assumption that tax revenues will miraculously massively increase. So Obama is explaining away his deficits by pointing to the frighteningly low revenues even as he bases his health care on the assumption that those same revenues will massively increase. And if Obama is wrong, the trillions of dollars of new spending will implode our economy].
Deficits normally shoot up in February because it is a month when the government makes large refund payments to individuals and corporations as part of the tax filing process. Those payments were boosted this year by various tax credits that were expanded or added as part of the government’s stimulus efforts including the “Making Work Pay” tax credit and the first-time home buyers tax credit. [Editorial note: Which doesn’t in any way change the fact that this February’s frighteningly low revenues continues a 21-consecutive month trend. That in addition to the fact that the stimulus is contributing to our deficit crisis].
Through the first five months of the budget year, government revenues totaled $800.5 billion, down 7 percent from a year ago, while outlays totaled $1.45 trillion, up a slight 0.1 percent from a year ago.
The deficit of $651.6 billion through February is up by 10.5 percent from the $589.8 billion deficit run up during the first five months of the 2009 budget year. The government’s budget year begins on Oct. 1.
The budget that Obama sent to Congress in February projects that the deficits over the next decade will total $8.53 trillion. But the Congressional Budget Office last week put the 10-year total even higher at $9.8 trillion. Part of the reason for the $1.2 trillion difference is that the CBO is projecting slower economic growth and thus less tax revenues than the administration over the next decade. [Editorial note: Number one, this proves we can’t trust the Obama administration or the government’s cost estimates to do anything other than be lowball figures. Number two, passing trillions in new spending via ObamaCare is hardly the thing to do given the fact that we will have LOWER revenues rather than higher ones].
The administration has maintained that the country must run large budget deficits until the economy has begun to grow at a sustainable pace that is bringing the unemployment rate down. Only then, the administration says, should the government focus on getting control of the deficits. [Editorial note: So I’m flat broke and deeply in debt. Clearly the thing I need to do is go on a massive spending spree on my credit card in order to get out of debt!!!].
Obama has created by executive order an 18-member fiscal reform commission that has been charged with coming up with a plan to shrink the deficit to 3 percent of the economy within five years. The plan is scheduled to be unveiled in December, after the midterm congressional elections. [Editorial note: What Obama has in fact created is a tool to weasel out of his repeated campaign promise not to raise taxes on “95% of Americans” by so much “as one dime”].
With the economy so weak, the interest rates that the government has to finance the flood of red ink have remained low. However, economists are worried that the favorable outlook on interest rates could change quickly if investors, including foreign investors, start to worry about the government’s commitment to restraining future deficits. China is the largest foreign holder of U.S. Treasury securities. [Editorial note: First of all, the Associated Press is factually wrong: Japan is now our largest holder, as China is jumping off the proverbial sinking ship. And to make things even worse, China is preparing to abandon the dollar altogether. Second, just to clarify, what this paragraph means is that the moment our interest rates go up – which they have to do in order to deal with our debt/deficits – we will have a double-dip recession. And the second dip may well be worst than the first].
Through the first five months of this budget year, net interest payments totaled $86.5 billion, up 15.3 percent from a year ago. [Editorial note: this is exactly what happened to Greece; and we are not far away from the same sort of implosion occurring here. Obama’s “solution” is to borrow more money in more unsustainable spending which will ultimately push our interest payments rates up and up].
In its report last week, the CBO predicted that the government debt held by investors would climb from $7.5 trillion at the end of last year to $20.3 trillion in 2020. CBO forecast that interest payments would more than quadruple from a projected $209 billion this year to $916 billion annually by the end of the decade. [Editorial note: So let’s just keep spending and spending and spending until we fly off a cliff to our deaths].
Congratulations on your historic presidency, Mr. Obama. Congratulations on your new record as the biggest spender in the history of the human race.
Obama promised hope and change. And he’s delivering.
A second Great Depression will be “change.” And there are plenty on the left – who embrace the Cloward-Piven strategy – who are “hoping” for it.