O’s Performance: What Lies Ahead?

Posted November 12th, 2012 by Jim Ettwein





Obama’s Performance, and what is ahead for all of us.

  1. Chalked up a 1.1T deficit, biggest since WWII, except for all his previous 3 deficits.
  2. Deficit is at 7% of GDP, above any year since Harry S Truman.
  3. Tax revenue is up 6.4%, probably due to the Bush-era tax cuts, which he wants to eliminate.
  4. Outlays fell, mostly due to reduced military spending (4%), reduction in unemployment benefits (24%), and an 8.9% decrease in Medicaid benefits to the states.

The WSJ also states “…federal spending remains at a new plateau of about $3.54 trillion, or some $800 billion more than the last pre-recession year of 2007. One way to think about this is that most of the $830 billion stimulus of 2009 has now become part of the federal budget baseline. The “emergency” spending of the stimulus has now become permanent, as we predicted it would.

If Mr. Obama were to bludgeon Republicans into giving him all of the tax-rate increases he wants, the Joint Tax Committee estimates this would yield only $82 billion a year in extra revenue. But if growth is slower as a result of the higher tax rates, then the revenue will be lower too. So after Mr. Obama has humiliated House Republicans and punished the affluent for the sheer joy of it, he would still have a deficit of $1 trillion.”

Source: WSJ 11/12/2012, p.A16 and CBO


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