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Tuesday, February 15, 2011

Surreal is this Blindman's Budget

Yesterday I attempted to explain the basics of budgeting.  As I'm sure you know, the Federal Budget process is far removed from those basics.  In order to show you just how far off we are, here is a little chart from budget data found on the White House website (Office of Management & Budget).
Only a blind-man could look at this chart and fail to see that something must be done.  But Obama's new budget fails to notice reality.  Instead his proposed budget is a surreal venture that seeks to march onward listening to the beat of a drum that only the President can hear.  Talk of any higher spending needed to fix the economy now falls on deaf ears (Krugman), yet on he marches.

Reagan faced a similar recession, with high unemployment like we currently have.  Yet his deficits never approached today's levels despite a massive defense buildup during his presidency and Congressional budgets nearly 3% higher than he proposed.  For President Obama to say that spending on this level is necessary during our current economic troubles is historically untrue.  Many economist say that the Stimulus of 2009 was not only unnecessary, but the types of spending included in it were counter-productive for growth.  What made Reagan a great leader was that he knew it was his job to make the tough choices.  The choices he made would be painful for the nation, but they would allow the economy to recover quickly.

In truth, Reagan & the Fed's choices allowed the recession to sting for a short time, but when it turned, the economy grew faster resulting in the longest peace time expansion on record.  On the other hand, Obama has sought to ease the downturn, soften the harsh blows, which has led to a slow recovery.  He has forfeited tomorrow's economic gains through his budget deficits.  My son understands that for a ball to bounce higher and faster, it must hit the ground hard.  Reagan allowed a short, hard bounce while Obama has spent over a trillion dollars tried to pad our landing.  Today, we sit with no momentum for an upward swing as that debt now sits upon us.

When poor decisions are made, there are consequences.  We can't hide from them.  They will catch up with us eventually.  My wife and I had the opportunity to move up the ladder into a big house like many of our friends, but we chose not to.  I've watched our friends lives played out like a yo-yo as they are helped by the government and the banks.  They're in their house - they're out of their house.  The government programs may seem like they are helping, but some people are still unable to make the mortgage payments. Now those people are forced to start over after wasting two years making payments on a house they can't afford.  Temporary assistance can't fix permanent problems.

Being a leader means making the hard choices.  If President Obama had brought forward a budget that makes these hard choices in cutting spending, I would have gladly supported him.  But with his budget, the president has taken the easy way out and failed to lead. Andrew Stiles at NRO points out that the President proposes new and higher taxes to pay for new spending on education and high-speed rail initiatives as well as flood the coffers of the EPA & Energy Department.  He brings in 2 trillion in new taxes to lower spending by 1.1 trillion. As we wait to see the CBO scoring, the baseline for any spending cuts seems exaggerated.

Our real hope as a nation is for our elected representatives to exhibit true leadership by moving to reign in our runaway spending.  The Republican leadership has said they intend to bring entitlement reform to the table.  I hope the Democrats will work with them to find a real bipartisan solution that will brighten our tomorrow.  We cannot 'Win the Future' if we continue down the path to insolvency.  There is no bankruptcy court for our nation.  We must not forfeit our future.  The time to act is now.  At this pivotal moment, Obama's response is, "Present".  Our country needs and deserves better from our President.

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