Congratulations America, if there was any doubt that you’d elected pretty, fawning airheaded sycophant as president, then this morning’s release of his proposed fiscal 2012 budget should make it obvious.
When the hand-picked Democrat chairman of your deficit reduction commission characterizes your budget as going “nowhere near where they will have to go to resolve our fiscal nightmare” you have some serious issues.
First, let’s pick off the low-hanging fruit. High-speed rail—it’s a rathole.
The President’s budget plan proposes raising the capital gains tax from 15 percent to 20 percent—and due to static scoring they believe that will increase tax receipts. In fact, historically the exact opposite has been true; tax receipts have risen as the capital gains rate has come down. But Obama’s never been interested in maximizing revenues, he wants to punish the rich even if he only succeeds in blowing a hole in his own budget.
The president’s budget would put a cap on deductions for charitable giving. That may well reduce monies charities have and put a greater burden on government services. That is, it may end up costing the government more in increased social services spending after they’ve socked it to charities.
The budget proposes to cap the home interest rate deduction for high income earners. This is most likely to affect Democrat voters who live in expensive cities like New York and San Francisco. Normally I’d say to go ahead and give the shaft to those liberal elites, but it’s also more likely to have a trickle-down effect to lower income earners as it puts another hurdle in the way of the recovery of the nation’s home market.
And then there’s the economic growth assumptions—they aren’t any better than the infamous unemployment rate predictions.
The administration's new budget may not represent a full-fledged appearance by Rosy Scenario, but economists believe the economic assumptions are definitely pink around the edges.
What has raised eyebrows are the growth figures starting in 2012 and running for the rest of the decade. They show the overall economy, as measured by the gross domestic product, growing at significantly higher rates than private forecasts.
That has a direct impact on the administration's estimates for the deficit in those years. Stronger economic growth means more people working and more tax payments to the government and thus lower deficits.
For 2012, the administration is forecasting that GDP will increase 3.6 percent and then climb to rates of 4.4 percent in 2013, 4.3 percent in 2014 and 3.8 percent in 2015.
By contrast, the Congressional Budget Office and many private forecasters see the GDP growing at rates that are as much as a full percentage point below the administration's forecasts. And the administration's forecasts continue to be slightly stronger for the rest of the decade through 2021.
They then go on to quote Mark Zandi, and even a stopped clock is right twice a day.
And then there’s the total failure to say or do thing one about entitlement programs.
President Obama is an empty suit.