Obama spending binge never happened

[erfalf]

Ah yes, Gaspar of Washington county....

I guess that is like welcoming me to the club. I have a nickname.

[guido911]

The inevitable fisting of the Nutting story from erfalf's link:

First of all, there are a few methodological problems with Nutting's analysis — especially the beginning and the end point.

Nutting basically takes much of 2009 out of Obama's column, saying it was the "the last [year] of George W. Bush's presidency." Of course, with the recession crashing down, that's when federal spending ramped up. The federal fiscal year starts on Oct. 1, so the 2009 fiscal year accounts for about four months of Bush's presidency and eight of Obama's.

In theory, one could claim that the budget was already locked in when Obama took office, but that's not really the case. Most of the appropriations bills had not been passed, and certainly the stimulus bill was only signed into law after Obama took office.

Bush had rescued Fannie and Freddie Mac and launched the Troubled Asset Relief Program, which depending on how you do the math, was a one-time expense of $250 billion to $400 billion in the final months of his presidency. (The federal government ultimately recouped most of the TARP money.) So if you really want to be fair, perhaps $250 billion of that money should be taken out of the equation — on the theory that it would have been spent no matter who was president.

Nutting acknowledges that Obama is responsible for some 2009 spending but only assigns $140 billion for reasons he does not fully explain. (Update: in an email Nutting says he attributed $120 billion to stimulus spending in 2009, $5 billion for an expansion of children's health care and $16 billion to an increase in appropriations bills over 2008 levels.)

On the other end of his calculations, Nutting says that Obama plans to spend $3.58 trillion in 2013, citing the Congressional Budget Office budget outlook. But this figure is CBO's baseline budget, which assumes no laws are changed, so this figure gives Obama credit for automatic spending cuts that he wants to halt.

[Conan71]

Yeah well, you guys other than Guido, Gaspar, and Erfalf are Democrats and you all suck. 

There, thread winner!

[erfalf]

Anyways, the way I came up with what I did. Apparently I was transposed something incorrectly. But anywho. Now keep in mind, statistics obviously can't be considered FACT. Plus I believe the government does not have to report future obligations when reporting it debt. So there is plenty of wiggle room. It is all a matter of opinion. All I am saying in regards to the recent Obama claim, is that it is a stretch to start considering Obama a thrifty president.

heir:

To come up with what I did, I used actual deficit number from the Office of Management and Budget. These number include on and off budget items (not really sure what that means, but anyways):

FY2009 - $1,412,688M
FY2010 - $1,293,489M
FY2011 - $1,299,595M

I adjusted the 2009 number by roughly $400B since that is roughly the difference between the budget that Bush approved and Obama signed and implemented in 2009. That gives us about $1T for FY 2009 under Bush.

So, with this idiot math I come up with the deficit actually INCREASING nearly 30% under the Obama administration. And if you really want to blow your mind look at the deficit numbers pre-bailouts. We would have to cut another 50% or so to get anywhere near there (or I guess increase revenues 50% or so, but since neither seems particularly likely).

I could use the actual numbers to show a zillion different things, just like Nutting did. What is more realistic? That is what you have to consider when looking at statistics.

[Gaspar]

The WSJ tackled it also: http://online.wsj.com/article/SB10001424052702304707604577426240727922340.html?mod=rss_opinion_main

[heironymouspasparagus]

Let's not forget that sometime in the recent past - and I cannot remember exactly when, but think it was summer last year - the Social Security trust fund went from + to -.  So that will become an increasing item in the mix for the next couple of decades.

Total future obligations are mind blowing - many tens of trillions of dollars.  And we all know it ain't gonna happen.  The checks may be written and taxes collected, but it will become more and more just Monopoly money - meaning the currency will be inflated enough to make the numbers work out.  Because we as a span of generations right here and now cannot put on our "big boy panties" and do what MUST be done to actually fix these things.  It is 'unpopular' and the people with the checkbooks own the ones who write the laws. It will become a futuristic, near apocalyptic, science fiction scenario.



Maybe like this.....??

Down the Yangtze the awful prediction has been fulfilled.  You expect this river trip to be an experience of the past - and it is.  But it is also a glimpse of the future. In a hundred years or so, under a cold uncolonized moon, what we call the civilized world will all look like China, muddy and senile and old-fangled: no trees, no birds, and shortages of fuel and metal and meat; but plenty of pushcarts, cobblestones, ditch-diggers, and wooden inventions. Nine hundred million farmers splashing through puddles and the rest of the population growing weak and blind working the crashing looms in black factories.

Paul Theroux, "Sailing Through China", 1983.

[Hoss]

Let's not forget that sometime in the recent past - and I cannot remember exactly when, but think it was summer last year - the Social Security trust fund went from + to -.  So that will become an increasing item in the mix for the next couple of decades.

Total future obligations are mind blowing - many tens of trillions of dollars.  And we all know it ain't gonna happen.  The checks may be written and taxes collected, but it will become more and more just Monopoly money - meaning the currency will be inflated enough to make the numbers work out.  Because we as a span of generations right here and now cannot put on our "big boy panties" and do what MUST be done to actually fix these things.  It is 'unpopular' and the people with the checkbooks own the ones who write the laws. It will become a futuristic, near apocalyptic, science fiction scenario.



Maybe like this.....??

Down the Yangtze the awful prediction has been fulfilled.  You expect this river trip to be an experience of the past - and it is.  But it is also a glimpse of the future. In a hundred years or so, under a cold uncolonized moon, what we call the civilized world will all look like China, muddy and senile and old-fangled: no trees, no birds, and shortages of fuel and metal and meat; but plenty of pushcarts, cobblestones, ditch-diggers, and wooden inventions. Nine hundred million farmers splashing through puddles and the rest of the population growing weak and blind working the crashing looms in black factories.

Paul Theroux, "Sailing Through China", 1983.

Ah, for a second there I thought Shadows had hacked your account...

[nathanm]

Total future obligations are mind blowing - many tens of trillions of dollars.

Here's the thing: Your total future obligations when you were born were somewhere on the order of a million bucks (in today's money). Was it some horrible shame that you didn't have the funds to support yourself for the rest of your life the moment you popped out of momma's womb? There's a reason why SS doesn't make much hay about their 75 year predictions. They are always completely wrong. Too much can change between now and then to say much of anything about the solvency of a fund 75 years hence. More people might be born, fewer people might be born. We might have a massive flu epidemic. Who the hell knows? It's useful to have the number, but you also have to look very carefully at the assumptions used to reach it and realize that it's only a guess.

In the case of something like a life insurance company or Social Security, 20-25 year projections are much more useful, for there is a lot less assuming and a lot more projecting. Confidence is obviously much higher. You may note that almost every year since 1987 when the new SS rates went into effect, someone has been beating the drum of insolvency based on the trustee's long term outlook. Nearly every year the insolvency date moves a year or more into the future.

Moreover, those future obligations can largely be shrunken by throwing out stupid policies that do things like drive skyrocketing health care costs.

[erfalf]

The WSJ tackled it also: http://online.wsj.com/article/SB10001424052702304707604577426240727922340.html?mod=rss_opinion_main

When I read this article, I thought of former co-workers. They didn't want to set the bar too high right off the bat. They figured to themselves they needed wiggle room so that they could show improvement, to get bonuses, raises, promotions, etc. Obama spends like a drunken sailor right out of the chute so that the rest of his term he appears fiscally conservative. Now I doubt that thought ever really crossed anyone in the administration's mind, but hey, it's fun to speculate.

[heironymouspasparagus]

Here's the thing: Your total future obligations when you were born were somewhere on the order of a million bucks (in today's money). Was it some horrible shame that you didn't have the funds to support yourself for the rest of your life the moment you popped out of momma's womb? There's a reason why SS doesn't make much hay about their 75 year predictions. They are always completely wrong. Too much can change between now and then to say much of anything about the solvency of a fund 75 years hence. More people might be born, fewer people might be born. We might have a massive flu epidemic. Who the hell knows? It's useful to have the number, but you also have to look very carefully at the assumptions used to reach it and realize that it's only a guess.

In the case of something like a life insurance company or Social Security, 20-25 year projections are much more useful, for there is a lot less assuming and a lot more projecting. Confidence is obviously much higher. You may note that almost every year since 1987 when the new SS rates went into effect, someone has been beating the drum of insolvency based on the trustee's long term outlook. Nearly every year the insolvency date moves a year or more into the future.

Moreover, those future obligations can largely be shrunken by throwing out stupid policies that do things like drive skyrocketing health care costs.

Social Security is gonna be a self limiting issue to some extent.  All of us - my age group - baby boomers - are gonna work through the system and while there will be a few hanger's on, most of us will be dead in less than 30 years.  That 'peak' will go back down, and while there are peaks in the time since, none seem to be nearly as big as my group.

Probably the biggest thing I have in mind for the tens of trillions is the current debt - kind of like a credit card debt - we keep adding to it, only make the minimum payments, and never pay down any principle. (sp?)  Over a 50 year period, that means - when interest rates get to more normal levels - that with today's level, we probably have about a 50 trillion payoff, IF we started making minimum payment equivalent reductions.  So today's 15 is gonna be paid back many times.

If we just wait until the house of cards all falls down, then we may end up with a decade or two (think Argentina) of pain, but eventual recovery at lower activity levels.  Perhaps a 'steady state' economy??

Wish I could be here to see it.  Probably won't happen, 'cause I think that is 30 to 50 years away.