Obama’s Tax-and-Spend Bender
The Wall Street Journal reports that as if the recent Senate election in Massachusetts never happened (or perhaps because of it?), President Barack Obama’s budgets for 2010 and 2011 will push federal government spending up to gigantic new levels:
The budget reveals that overall federal outlays will reach $3.72 trillion in fiscal 2010, and keep rising to $3.834 trillion in 2011.
As a share of the economy, outlays will reach a post-World War II record of 25.4% this year. This is a new modern spending landmark, up from 21% of GDP as recently as fiscal 2008, and far above the 40-year average of 20.7%.
In the “out years” in mid-decade, the White House promises that spending will fall all the way back to 23% of GDP. Even if you choose to believe such a political prediction, that still means Mr. Obama is proposing a new and more or less permanently higher plateau of federal spending.
And here you thought the “stimulus” was supposed to be temporary. This is also before the baby boomers retire and send Medicare and Social Security accounts soaring.
But that’s not all:
If Mr. Obama’s priorities become law, federal outlays will have grown an astonishing 29% since 2008.
As further proof, the White House proposes to convert long-standing “discretionary” spending that requires annual appropriations into permanent entitlement programs. A case in point is the Pell Grant program for college, which the budget would shift into the “mandatory” spending column at a cost of $307 billion over 10 years. The political goal here is to make a college education as much of a universal entitlement as Social Security.
But the reality is that even these still-high deficits are based on assumptions for growth and revenue gains from record tax increases starting January 1, 2011. And what a list of tax increases it is—no less than $2 trillion worth over the decade. . . . Even these tax increases won’t be enough to pay for the spending that this Administration is unleashing in its first two remarkable years.
As our Senior Fellow Robert Higgs has decisively shown, such massive tax, spending, and debt-mongering will only prolong the recession, high unemployment, and economic malaise. Please see the following:
Depression, War, and Cold War: Challenging the Myths of Conflict and Prosperity, by Robert Higgs
Crisis and Leviathan: Critical Episodes in the Growth of American Government, by Robert Higgs
Against Leviathan: Government Power and a Free Society, by Robert Higgs
Neither Liberty Nor Safety: Fear, Ideology, and the Growth of Government, by Robert Higgs