Barack Obama's 2013 Budget Fails to Make the Tough Cuts America Needs

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Barack Obama, budget, cuts, tax cuts, deficit

Barack Obama's 2013 Budget Fails to Make the Tough Cuts America Needs

Could you run the government on $2.5 trillion dollars? The Obama administration sure can’t.

Obama’s latest disaster of a budget calls for a $1.33 trillion deficit, for a total federal budget of $3.8 trillion. 

To put it in perspective, Obama wants the government to spend an amount of money next year that exceeds the GDP of every country in the world, save three.

Of course, Obama’s newest budget is about more than just the mind-boggling extent of our government’s bloat. For a president seeking reelection, the budget proposal is about shoring up support and giving the people what they want. Through his budget proposal, Obama is essentially using taxpayer money to bet that Americans want to continue avoiding making the tough cuts we need to make, particularly regarding the government’s health care programs.

President Barack Obama is doing the American public a gross disservice by continuing to behave as though Americans will never have to pay the piper.

At some point, Americans are going to need to decide to pay down the debt, or at least keep it from continuing to spiral out of control. Instead, Obama is betting that Americans will continue to embrace the popular perception that short term, unique circumstances exist that justify not just putting the problem off, but actually making it worse.

When will this end? When we're not in a recession? Believing that would be ridiculously naïve. The government has commonly run deficits even when the economy is healthy.

When will improving the present stop justifying hurting the future? Kicking the can down the road can't always be the right thing to do, can it?

Quite simply — it is ridiculous that this administration can't figure out a way to run the government on $2.5 trillion, or at least something close to $2.5 trillion.

As long as the government refuses to reform its health care programs, permits wasteful programs like Communities Putting Prevention to Work to continue, and allows billions of dollars of stimulus money to sit unspent, a $1.33 trillion deficit remains unnecessary, irresponsible and indefensible.

Photo Credit: Matt Ortega

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Christopher P. Ryan

Christopher P. Ryan currently attends The George Washington University. He previously ran his own business and did volunteer work in his communit...

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Nicholas DeBoer

Austerity, the antijobs plan.

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A common misunderstanding of the public debt leads to the austerity argument every time. The public debt is not dangerous, it will not harm us, and we cannot become insolvent in our own currency, as long as Americans are willing to use it. It is just a portion of private sector savings, that's it.

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  • Christopher P. Ryan 3 months ago It's likely that within a few ...

It's likely that within a few years paying interest on the debt will total about 1/4 of the federal budget. That's a pretty scary proposition to me.

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  • Mike Wright 3 months ago That may be, but the money that bou...

That may be, but the money that bought the debt in the first place was already created by government, then un-created when converted to 'debt', then converted back to real money when cashed out or paid off. The debt IS PART OF THE MONEY SUPPLY ALREADY. This is an important point, often overlooked.

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Reducing spending and balancing the budget is not an impossible feat. Getting the most partisan congress we have had in years to agree that we need to balance the budget is a much more challenging task.

The key to balancing our budget is getting rid of discretionary spending on entitlement programs. in 2011 the US spend 19.5 billion on NASA, 28.6 billion on foreign aid and 159.3 billion on Anti-terrorism. Guess how much was spend on entitlement programs? A whopping 2.4 trillion dollars.

It's time to reduce the federal government back to its constitutional functions.

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" it is ridiculous that this administration can't figure out a way to run the government on $2.5 trillion"

Sigh. This passes for an argument these days, I suppose.

When can we get back to the days when Democrats and Republicans argue over a 1% of spending as % of GDP and the government functions again? No one is ever going to cut $1.3 trillion from the economy during a recession. That would be insane. Are you asking for that? No, probably not. So what's the point of even saying it out loud?

As long as people are arguing this nonsense (and convincing other people of this nonsense), there's no hope. We need to come back to reality. Ron Paul's fantasy world is nice if you're stoned, but the grown ups are trying to govern.

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  • Christopher P. Ryan 3 months ago Paul-- I'm surprised and dissa...

  • Andrew Melli 3 months ago A crucial chord about Paul supporte...

Paul-- I'm surprised and dissapointed--you've always seemed respectful on this site, until now.

Should I take this comment as an example of the kind of "reality" that "grown ups" like you understand and children like me don't? Polemics and self-righteousness in the face of a broad overview of the facts? An arrogant, disrespectful approach in response to sensible observations?

The actual reality is that Ron Paul's "fantasy world" used to be a fringe movement, and is now becoming more legitimate by the day. Around 1/4 of the Republican party now supports him for President, and that number will continue to grow until people like you shed their pathetic arrogance in favor of having an actual conversation with people like me.

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  • Benjamin Byron 3 months ago "Sensible observations" s...

"Sensible observations" seems to have a more elastic application in politics and policy discussions these days.

Popular support means political legitimacy, not intellectual or ideational legitimacy--there are billions who follow very different religious persuasions, but the size of their flock does not legitimate their particular worldview, only their 'people power.'

Paul is arguing against the legitimacy of the ideas, not the tea party/libertarian movement in 'people' terms.

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  • Christopher P. Ryan 3 months ago Which of my observations are not se...

  • Benjamin Byron 3 months ago $2.5 trillion merely covers mandato...

  • Christopher P. Ryan 3 months ago Your comment about mandatory spendi...

Which of my observations are not sensible?

If Paul, or you, or anyone else thinks that "The government should spend less money" is an idea that does not or should not have political or intellectual legitimacy-- I'm really not sure where that leaves us, or what to make of that. That idea's legitimacy seems painfully self-evident to me, but I suppose others may have different opinions.

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$2.5 trillion merely covers mandatory spending. This is fine, if you don't think we need a military or the various other things done with discretionary spending.

This is why your critique of the Obama budget isn't sensible--it demands extreme cuts across the board in all categories......in one budget year. This is not a sensible course of action (Sensible: Chosen in accordance with wisdom or prudence; Prudence: sagacity or shrewdness in the management of affairs).

We can agree that extreme, abrupt change is neither sensible not prudent. Perhaps if you argued Obama's budget fails to meet a standard for the proper reduction of the deficit over time, that could be a sensible critique.

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Your comment about mandatory spending is a false choice. Mandatory spending should not total $2.5 trillion.

In many ways, the fact that we are even having this conversation is the problem. Define as many words as you want--spending what you take in should never be, to use your word, "extreme." It's pathetic that it is. It can't continue to be indefinitely.

Besides, you are responding as though I called for a balanced budget this year, which I did not. Though I have no doubt that we could easily lose hundreds of billions from the budget, in certain cases a "phase out" of certain programs would probably be more appropriate. Whether that would leave the budget balanced or not--I can't say for sure without more info.

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Mandatory spending is mandatory b.c. the gov't says its mandatory. There is need for social insurance policies in the economy when it is in a transition, however, such programs should be scaled back in times when the resources could be implemented for further development in newly emerging or upgraded industries of the economy.

Keep the programs, but it wouldnt hurt for a citizen to prove they have applied for x jobs before asking for gov't $$.

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A crucial chord about Paul supporters, but I'll say most of the items expressed regarding the fiscal situation are fair from both sides.

The item at hand is more so the response to the perceived problems. More offices and bureaucrats or a consolidation or streamlining of sorts during a crisis?

There are plenty of areas in government that could be downsized, and a consequence of that is less government expenditures for agencies' budgets.

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Obama the divider. That will probably be exactly what the historians call him if they are even making an attempt to be nice. He will go down as the worst POTUS in history eclipsing Carter and GWB. At least he's consistent.

Someone stated "Austerity". They don't even know the meaning of the word yet. Wait till another 4 years of Obama and we will have to have austerity like Greece. They are rioting because their free give away programs, retirement at 55 and other wonderful entitlements can't be paid for.

"Bread and Circuses" - superficial means of appeasement formula for the well-being of the population. Give them food and entertainment. That is Obama. Maybe they'll be gullible again.

I agree with the article. He could at least try.

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  • Paul Anderson 3 months ago Why would we have a Greece-like sit...

  • Bradley Bosserman 3 months ago Yeah, we're totally destined t...

Why would we have a Greece-like situation in 4 years? Worst case scenario, the economy grows at a slow rate and we have a big deficit. Our long term problems don't hit for 10 years.

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  • Ben Poole 3 months ago Paul, Actually, I hope your corr...

Paul,

Actually, I hope your correct. But reality is we can't wait till we implode. That means after 4 more years we will be at 20 Trillion in debt. The way the discussion is going around here, people want more war. Then add another 4 trillion to that. Interest rates will go up as the economy improves so there will be little relief as towards future income because it will be swallowed by interest rate increases. That leaves very few and poor choices still left. Even with cutting at that point, we'll still run deficits. If everything pans out perfect in our favor, we may be able to sustain long enough for a full recovery to overshadow the climbing debt. Otherwise we'll be at budgets of 25% of GDP and climbing with debt over 125% GDP.

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  • David Gray 3 months ago We will get out of our debt situati...

  • Ben Poole 3 months ago I concur. The problem is Obama want...

  • Jeff G 3 months ago Ben, military spending is large but...

We will get out of our debt situation the same way we did after the Great Depression and WWII. It took a combination of raising taxes (payroll tax collection started in 1943), cutting spending (war spending obviously went WAY down after WWII), and inflating the currency (inflation was 8.74% in 1950 and 7.74% in 1951). It took all three back then, it will take all three this time as well.

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I concur. The problem is Obama wants to raise taxes (perhaps ok), does not cut (cuts projected deficits - that is not real cuts from today's spending - BAD), and is increasing the military budget (not decreasing as we did after WWII - BAD). And it looks like the US is going to be in perpetual war and interventionism (REALLY BAD). So, I don't see history being on our side on this one unless we get a non-interventionist POTUS. The imperial presidency must end. That is a long shot as Ron Paul is the only one. So, the future doesn't bode well. We can get out now- but will we?

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Ben, military spending is large but importantly it's discretionary, so it can go up some years and down others -overall not consistently adding to the debt. It's also important to recognize that the President/Executive branch does *not* appropriate any federal spending - Congress does; and Congress has the power at any moment to reform the way it appropriates money, 70% of which is not part of the annual budget process anyways.

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Though true, there is a point you don't want to cut to much and hollow at the military for defense. At the same time Obama is budgeting 1.3Trillion deficit. If we cut 100% military (obviously ridiculous) we still wouldn't have a balanced budget. Obama is proposing to raise taxes but spends everything on new bureaucracy, new road initiative etc.

You are correct, he can't spend what he isn't given. How do you get Congress to cut? The 70% is expected to grow till no discretionary is left. They need to forget about cutting from projected deficits over 10 years. That has proven to be false. None of the promises in 2010 reductions have seen a penny reduced. Every CBO estimate is a lie. Not that its intentional. Whatever tax increase is spent.

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Yeah, we're totally destined to be Greece. I wish we had a reserve currency that we could denominate our debt in so that we could avoid that fate. Oh wait! We do? Awesome!
If the "free give-away programs" --AKA robust welfare state and social safety net--were the problem, why aren't the Scandinavian countries in a similar spiral?

And you could give the "Obama is the worst Prez ever!" stuff a rest. You say that in every post....like 40 times a day. We get it. You don't like Obama.

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  • Ben Poole 3 months ago Do you even understand socialism Br...

Do you even understand socialism Bradley? If you want it, they have a ticket at the airport. Scandinavian countries are self sufficient. Meaning they have enough resources of their own and are net exporters. Their laws also haven't allowed their industries to go in their entirety overseas as ours have. Its a different world and no comparison to the US with VAT and a completely different tax structure and model. They also fund their entitlements and not spend them as our government does. They have good healthcare because they don't subsidize the healthcare industry feeding more money increasing medical costs. They also don't pay for illegal immigrants to get free services. They deport them. The list goes on and on.

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  • David Gray 3 months ago Ben I think you are missing Bradley...

  • Ben Poole 3 months ago Good point (mic) and after reconsid...

  • David Gray 3 months ago I have vague memories of gas costin...

Ben I think you are missing Bradley's point. One of the major factors behind Greece's issues is that they do not control their own currency and are beholden to the rest of the Eurozone. We don't have that problem.

We also don't have the problem of a leader being able to step down and decree his unelected successor to takeover and start implementing austerity on the people. That is what's happening in Greece today. No wonder they are rioting.

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Good point (mic) and after reconsideration, a mic to Bradley. Though, we can print more money or more quantitative easing (same thing almost). We suffer in the long run. At some point after the depression/recession funk we are in, we will have to pay the piper by paying out interest payments. Perhaps we can continue to run deficits for 5 more years. But, one day soon, it will catch up to us in higher inflation and devaluation of our currency. Eventually the flight to safe haven of the dollar will subside and dollars will be sold further putting downward pressure on the dollar. So, in 10yrs we'll be hopping along with Gold at $3K an oz. and paying $10 for a happy meal. Then we'll be the cheap labor third world country as wages stagnate.

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I have vague memories of gas costing $0.79/gal and often heard stories growing up about how a Coke cost a dime. Inflation is a reality in a fiat system of currency.

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I'm not fan of Obama, but where's the GOP's budget proposal? The GOP POTUS candidates, with the exception of Ron Paul, have not proposed substantive cuts. We need deep cuts, and we need them fast.

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  • Bradley Bosserman 3 months ago "We need deep cuts, and we nee...

"We need deep cuts, and we need them fast." False.

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  • Zack Fiv 3 months ago "False" False. We do need...

"False" False. We do need cuts. We spend over $1 trillion a year overseas in a counter productive foreign policy that actually endangers us even more. We spend hundreds of billions a year on corporate welfare and hundreds of billions more on entitlement spending sent to the wealthiest segments of our society. The status quot cannot stand.

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Christopher,
Given the recent budget history and hyper-partisanship, this proposed budget is not even worth the paper it's printed on. There will be no discussion on it until after the election; don't forget we still don't have a budget for this year and Harry Reid says we won't. After the election, discussion will take place based on the results - maybe.

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  • Gary W. Patterson, Jr. 3 months ago How pathetic is it that we now have...

How pathetic is it that we now have a gov't that can only act for about 6 months after a presidential election? After that, it's time to start thinking about mid-terms, then it's off to presidential politics all over again. Pretty sad.

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"When will this end?" Hopefully not until the economy is back near full employment and we've made the essential investments needed to prepare our country and economy for the future.

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  • Christopher P. Ryan 3 months ago Essential investments such as...? ...

Essential investments such as...? The government still hasn't managed to spend all of the last round of "essential investments" passed around 3 years ago (ARRA)! Besides, as I wrote above, recent history shows a pattern of deficit spending even when the economy is expanding. Expecting any different in the future is simply naive.

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  • Bradley Bosserman 3 months ago Investments in education, training,...

Investments in education, training, broadband, transportation, nextgen energy, smart grid, all sorts of things. The vast majority of ARRA funding has been spent. It takes a while to move through the system. That's how Federal program budgeting works. And we'll need to stabilize long run debt through some type of fiscal consolidation. That should occur after the economy has recovered, include raising revenue levels from their current 60-year low, and even more aggressively tackle health care inflation. If we're running big deficits w/ full employment, complain then. But now's not the time.

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  • Paul Anderson 3 months ago Correct. We need long term cuts and...

  • Christopher P. Ryan 3 months ago The market won't be paying us ...

Correct. We need long term cuts and long term tax increases. But right now, our deficit is fine. We're borrowing at a negative interest rate.

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The market won't be paying us to borrow once inflation hits, interest rates come back up, and the government refinances their existing debt. The government is already going to have to refinance over $5.5 trillion of debt in the next 4 years. ( <http://www.treasurydirect.gov/govt/reports/pd/feddebt/feddebt_ann2011.pdf> p 15) This is already so out of control it's absurd, and you want them to borrow more (leading to it being refied later)???

Bottom line: Recent history shows no meaningful relationship between the state of the economy and the government's decision whether to run deficits or not. If you guys really expect that to change this time around, more power to you. I hope you're right, but I for one am not buying it.

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Austerity, the antijobs plan.

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11 Replies

  • Christopher P. Ryan 3 months ago And the tax increases Obama is prop...

  • Andrew Melli 3 months ago You have taken an extreme premise, ...

  • Lawrence Sampson 3 months ago OH! My liver! lol...

And the tax increases Obama is proposing in the budget will be job creators? I don't think so.

Besides, are jobs now worth laying the cost at our children's feet??

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  • Bradley Bosserman 3 months ago Given that we can currently borrow ...

Given that we can currently borrow 10 year treasuries at a negative real interest rate, yes. It means that the market is paying us to borrow right now. With unemployment still north of 8% and massive amounts of capital being under utilized, this is a no brainer. At least for economists. Partisan ideologues are a different story.

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  • Christopher P. Ryan 3 months ago Are you actually asserting that eco...

  • Bradley Bosserman 3 months ago Does literally every single economi...

  • Paul Anderson 3 months ago Chris - Every credible economist...

Are you actually asserting that economists 1) ALL agree on this issue and 2) All agree with YOU on this issue??? I hope you know that's not true.

Key words in your statement: The market is paying us to borrow RIGHT NOW. Putting the Fed's irresponsible and damaging quantitative easing aside for a moment, what will the excuse be when rates go up, and we keep right on borrowing?

I am many things, a partisan ideologue is not one of them. Check the rest of my work on this site. I criticized both parties' track records in this very article.

You should take a moment to consider that I am right, because I have lived through the current approach to managing the economy being rammed down my throat (unsuccessfully!!!) for my whole life.

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Does literally every single economist agree with me? No, of course not. But there are very few honest ones who advocate fiscal consolidation while unemployment is so high, capital stock is underutilized, and interest rates are at or near the zero-bound. The economic and empirical basis for such an argument is pretty weak, even if you had tried to draw on an actual economic theory. I'll let your silly comment on monetary policy slide because that's a separate discussion.

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Chris -

Every credible economist agrees with him.

Austrian economists don't really count. My understanding is that they're just here for smarter people to mock. For fun.

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I really appreciate that the persistent counter-argument to the clear economic logic of increasing borrowing under negative real-interest rates is, "Well, yea, but what if that changes..." A complete dodge of the economic argument put forward to argue some exogenous, imagined future reality not under consideration at the moment. Those of the Ron Paul/Austrian persuasion have no consistent, reasonable argument against the logic of increased borrowing under negative real interest rates and so they change the discussion to something they know quite well: arguing about altered imagined future scenarios that stack in their favor.

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I suppose FA Hayek received his Nobel Prize by accident.

Ben- see my link above for evidence that the situation is changing in a way that makes borrowing more money a scary proposition.

Paul- I'm through interacting with you on this website until you stop nastily diminishing others' opinions. Check the community principles on the website-- respect is one of them, and you are falling short and embarrassing yourself.




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You have taken an extreme premise, either austerity or total stimulus; the answer is predictable gov't & sound regulation. The admin doesnt trim wasteful spending, & wants to make up the difference by taxation. In a recession, trim waste than to cover it by wealth extraction:

i.e.

Meals Out are 30.48% more expensive because of tax,
Cell Phones 40.04%
Vaccines 29.67%
Airfare 43.77%
Gas 44.52%
Hotel 39.39%
Tobacco 75.17%...

More Expensive...

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  • David Gray 3 months ago Computers, other electronics, housi...

Computers, other electronics, housing, etc...

All Less Expensive....

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  • Andrew Melli 3 months ago I am certainly interested to hear h...

I am certainly interested to hear how an item may be less expensive when a tax is placed upon it.

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OH! My liver! lol

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