By Peter Roff, Thomas Jefferson Street blog
According to White House Budget Director Peter Orszag, as Reuters reported Monday, "High U.S. budget deficits are being driven by an economic crisis that President Barack Obama inherited."
That really says it all.
It is true that the U.S. economy was in bad shape when Obama came into office. But he and his top appointees want us to believe that their preferred solution—pushing huge increases in federal spending in his so-called economic recovery act and his budget for the upcoming fiscal year though Congress to prime the Keynesian pump, putting money in the hands of their political constituencies—are in no way related to the just announced record $1.8 trillion federal deficit.
"Orszag, writing in a blog posting, also said that the administration's latest budget deficit estimates—which were revised upward by $89 billion and $87 billion for this year and next, respectively—reflect the latest data on tax receipts, federal bailouts and other government costs," the wire service reported.
The new Democratic administration has made it necessary for the federal government to borrow just under one half of every dollar it must spend this year to fund its existing obligations and all the new spending the new president and his allies in Congress approved during Obama's first 100 days in office.
As the Associated Press explains, the FY2008 deficit will increase "by $89 billion to above $1.8 trillion—about four times the record set just last year." Which Orszag and others want us to believe is somebody else's fault.
The Reagan deficits, which used to be held up as an example of the former president's mismanagement of the economy, were, at their worst point, only about a tenth of what Obama has given us in his first year—no, his first days—in office. Today Reagan's $221,245,000 billion budget deficit for FY 1986 ( U.S. Office of Management and Budget, Historical Tables, annual), once the worst year on record, looks like the good old days. And that deficit occurred during a period of economic expansion, unlike the Obama deficit, which is being incurred during a serious recession.
The deficit is not the only weakness in the Obama policy. Unemployment, which is now just under 9 percent, continues to rise. And increased joblessness leads to increased government spending for things like additional unemployment benefits and food stamps. At the same time the much promised transparency in stimulus spending has yet to appear. As the AP is reporting, "Federal auditors acknowledge they can't yet track the transportation money that is leaving Washington and there is no single list of the thousands of projects planned in each state."
The days of blaming Bush are at an end. At some point Obama's White House is going to have to step up and accept responsibility for the fact that its economic program, for the moment at least, is failing, that it is not producing the promised results and that it is, as the non-partisan Congressional Budget Office suggested early on might be the case, making things worse.
Check out our political cartoons.