If you listen NOT closely to President Obama, like most busy people must, you might think that the the budget will balanced in a few years, even though it won’t.
That’s because Obama is using language to obscure fact, moving the goalposts during the game by redefining his objectives to ones that are easier to reach.
Let’s take a look at the words he dribbled out about the budget during his press conference Tuesday. Few people seem to have understood what he was actually saying.
On the budget, what my budget does is to put forward some tough choices, some significant spending cuts, so that by the middle of this decade our annual spending will match our annual revenues. We will not be adding more to the national debt. So, to use a — sort of an analogy that families are familiar with, we’re not going to be running up the credit card any more.
Sounds like a balanced budget by the middle of the decade, right? Not at all.
Part of what everyone has to pay when they’re running a deficit is interest on their debt. It can be a big part of your monthly expenses, and it’s about 5 percent – and growing – of the entire federal budget. But the result being described by Obama of his “tough choices” excludes interest payments. “Spending” may “match revenues” – though this is debatable – but we’ll still be running a deficit because of interest payments.
So as a practical matter, what he is offering is totally meaningless. If I could stop paying interest on my mortgage, I’d be on a plane to Paris tomorrow.
Of course, Obama’s failure to actually, really balance the budget – including interest payments – is the fault of none other than President George W. Bush’s.
We still have all this accumulated debt as a consequence of the recession and as a consequence of a series of decisions that were made over the last decade. We’ve piled up, we’ve racked up a whole bunch of debt. And there is a lot of interest on that debt.
See what the president is up to here? If Obama can just match revenue to spending, he’ll have done his part. The interest on the accumulated debt is not his fault. Maybe Bush, if he has any decency, can somehow erase the rest of the deficit working out of his home in Dallas, where he’s retired.
Ending the actual deficit is not even the goal anymore, if you read Obama closely:
What we say in our budget is let’s get control of our discretionary budget to make sure that whatever it is that we’re spending on an annual basis we’re also taking in a similar amount. That’s step number one.
Step number two is going to make — is going to be how do we make sure that we’re taking on these long-term drivers and how do we start whittling down the debt.
So amont of the annual deficit due to interest payments no longer has to be eliminated by spending cuts or tax increases. Instead, we can continue to run a deficit, and slowly reduce the interest payments by “whittling down the debt.” Very slowly.
So welcome to the Magical Budgetworld of Obama. With just a few tweaks of the English language, we no longer have to balance the budget!
Maybe he is the Messiah.
12 thoughts on “Obama’s Shady Use of Language on the Budget”
The wispy smoke and mirrors of Obamaspeak can be so alluring.
Some say that matching revenue with spending without using the dreaded machete to cut anything out of the budget actually means that our taxes will rise. His reliance on tax increases and the spooky IRS agents to collect the Obamacare revenues is not workable and shows a real lack of financial prudence.
The Administration can blame Bush( or even Nixon), all they want, but the President doesn’t have the final say, Congress decides what’s to be allocated and spent. This Prez’s inclination to blame anyone for his failures or the state of the Union is unmanly and offensive. He might be well served to take a cue from GovChristie and be forceful. We’re grownups and we can deal with it, no matter how hard it might be.
I remember how he cut Medicare half a trill in the Obamacare thing and said this was to save Medicare. Now–this thing would be the “stabilize” the budget idea–at least not make it worse–but it doesn’t even do that. But since we are all assumed to be idiots, let’s just dance along the yellow bricks.
Obama’s Budget …. meet 1984.
ITEM: “Extensive budget cuts.” none.
ITEM: “Decisions over the last decade.” Blame it on Bush (and Clinton). Its not our fault.
ITEM: “Whittling down the budget”. Please keep your eyes closed (while OMB elves change the numbers on the Debt Clock).
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Keith,
Tell me what kind of information you would like about the debt. I know the debt numbers like the back of my hand. Many of the Portland talk show hosts rely on my data when it comes to debt numbers. I’ll pass you some information that I hope you can put to use. Leave a message if you like it and want more.
From http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/budget.pdf Page 3, “When I took the oath of office 2 years ago, my Administration was left an annual deficit of $1.3 trillion, or 9.2 percent of GDP, and a projected 10-year deficit of more than $8 trillion.”
It is impossible to get this $1.3 trillion. If you take a one year period staring on 01/01/08 or 01/20/08, you can get a $1.4 trillion deficit. Obama regularly used this number in the 2008 election, but this number includes $458 budgetary spending deficit and $900+ billion in assets purchased under TARP (page 134, http://www.gpoaccess.gov/usbudget/fy10/pdf/fy10-newera.pdf ).
From the press conference: “When I took office, I pledged to cut the deficit in half by the end of my first term. Our budget meets that pledge and puts us on a path to pay for what we spend by the middle of the decade.”
According to the budget.pdf on page 171, the deficit is going to be $1.101 trillion at the end of the 2012 budget. Since the deficit is outlays minus receipts, this is twice the size ($1,101 / $458,553) of the deficit left by his predecessor. Even if you subtract the $242 billion in interest (Page 176) on the debt in 2012, the math doesn’t compute.
From the press conference: “On the budget, what my budget does is to put forward some tough choices, some significant spending cuts, so that by the middle of this decade our annual spending will match our annual revenues.”
(Page 171 of receipts.pdf) 2015 Receipts $3,583 – 2015 Outlays $4,190 = 2015 deficit $607
From the press conference: “We will not be adding more to the national debt. So, to use a — sort of an analogy that families are familiar with, we’re not going to be running up the credit card any more.”
According to the budget.pdf on page 171, the 2010 debt held by the public is $9,019 and goes up to $18,967 on 2021, Even if you subtract the total accumulated interest (Page 176), the sum of interest does not equal additional deficits. There is also a addition error on that page. The number “5,726” should be “5,727”.
I think that’s enough for now.
Some things to think about
Public debt since Pelosi became speaker went from $4,898,816,127,068.69 to $9,385,079,979,612.71. All spending measures must start in the House of Representatives. Pelosi is responsible for increasing the public debt over 91.5%.
If you believe there is an $14 trillion in debt, then you must believe there were not any surpluses in the budget since 1957. http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo4.htm
If you believe there was a surplus from 1999 to 2001, then you must believe the the actual federal debt is $10 trillion, since all intragovernmental debt is simply moving money from your left pocket to your right pocket.
It is not logical or possible to believe in both. If you want me to back this up even further, write me back with some specific questions.
I trust neither the Reps or Dems on the budget. Both have shown themselves to be criminals in stealing from the American taxpayer. We need a President with guts to *freeze* all spending and an outside source to come in and do a 2 year audit of every single governmental department, find the waste and then put the crooks in jail.
Uncle Sam used to be a man dressed in an American flag, top hat with a white grandpa beard. He has now changed into a man with a black hoodie, black jacket, black gloves with a 9mm pistol pointed at your face, requesting “everything you own.”
You’re right Tom. I think only Chris Christie would put on the brass knuckles and get it done.
Andy, thanks. Glad to have you as a resource. I was wondering if it worked even subtracting the interest.
I guess I didn’t make this clear enough:
According to the budget.pdf on page 171, the 2010 debt held by the public is $9,019 and goes up to $18,967 on 2021, Even if you subtract the total accumulated interest (Page 176), the sum of interest does not equal additional deficits. There is also a addition error on that page. The number “5,726″ should be “5,727″.
If the average business did this kind of math, banks would never loan them money. I’ve never heard anyone ever doing this kind of financial statement. If GWBush used this math, he would have had surpluses beyond the 2001 budget.
I haven’t look at debt interest rates lately. Towards the end of GWBush’s budgets, when there was $8 trillion in Public Debt and $4 trillion in Intragovernmental Debt, we paid and equal amount in dollars to each debt. So why does Intragovernmental Debt get such a higher return?
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