Obama’s Budget

I thought Obama had been doing pretty good so far in his term to date. But when it comes to his budget, I think it looks to be a disaster of gigantic proportions.

Here are some key facts on the budget:

• The projected deficit of $1.75 trillion is four times larger than the next largest deficit in history
• The $3.6 trillion of expenditure represents the Federal Government spending around US$25,000 on behalf of every American man, woman and child.
• The deficit is almost 50% of government expenditure. So around half of what Obama is spending, he will borrow money for.
• The deficit will be around 12% of GDP. That makes our projected deficits look minor – would be like a NZ$25 billion deficit
• The budget is actually a “rosy” scenario, with an assumed 3.2% economic growth next year.

I think this budget may doom Obama to being a one term President. It is a massive increase in spending, that is quite literally unfunded.

Now let it be said that Bush was also a fiscal disaster. He also failed to restrain spending much. The best recent President in terms of achieving a balanced budget was Bill Clinton.

Of course Obama may not get his budget through Congress. The Republicans are geared to fight this, and many of the moderate Democrats will be worried about having to justify this in 2010 elections.