Obama Seeks Freeze on Many Domestic Programs

[GRG55]

Re: Obama Seeks Freeze on Many Domestic Programs

January 26, 2010
Obama Seeks Freeze on Many Domestic Programs

By JACKIE CALMES
WASHINGTON—President Obama will call for a three-year freeze in spending on many domestic programs, and for increases no greater than inflation after that, an initiative intended to signal his seriousness about cutting the budget deficit, administration officials said Monday.
The officials said the proposal would be a major component both of Mr. Obama’s State of the Union speech on Wednesday and the budget that he will send to Congress next Monday for the fiscal year 2011 that begins in October.
It would cover the agencies and programs for which Congress allocates specific budgets each year, from air traffic control and farm subsidies to education, nutrition and national parks.
But it would exempt the Pentagon, foreign aid, the Veterans Administration and homeland security budgets, as well as the entitlement programs that make up the biggest and fastest-growing part of the federal budget, Medicare, Medicaid and Social Security.
The payoff in budget savings would be small relative to the deficit: The estimated $250 billion in savings over 10 years is less than 5 percent of the $9 trillion to $10 trillion in additional debt the government is expected to accumulate over that time.
etc
http://www.nytimes.com/2010/01/26/us...budget.html?hp


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so much for fiscal policy. ready to phase out q.e.?

Even the faithful are losing faith...

March of the Peacocks

By PAUL KRUGMAN
Published: January 28, 2010

Last week, the Center for American Progress, a think tank with close ties to the Obama administration, published an acerbic essay about the difference between true deficit hawks and showy “deficit peacocks.” You can identify deficit peacocks, readers were told, by the way they pretend that our budget problems can be solved with gimmicks like a temporary freeze in nondefense discretionary spending.

One week later, in the State of the Union address, President Obama proposed a temporary freeze in nondefense discretionary spending.
Wait, it gets worse. To justify the freeze, Mr. Obama used language that was almost identical to widely ridiculed remarks early last year by John Boehner, the House minority leader. Boehner then: “American families are tightening their belt, but they don’t see government tightening its belt.” Obama now: “Families across the country are tightening their belts and making tough decisions. The federal government should do the same.”

What’s going on here? The answer, presumably, is that Mr. Obama’s advisers believed he could score some political points by doing the deficit-peacock strut. I think they were wrong, that he did himself more harm than good. Either way, however, the fact that anyone thought such a dumb policy idea was politically smart is bad news because it’s an indication of the extent to which we’re failing to come to grips with our economic and fiscal problems...

...So if health reform fails, you can forget about any serious effort to rein in rising Medicare costs. And even if it succeeds, many politicians will have learned a hard lesson: you don’t get any credit for doing the fiscally responsible thing. It’s better, for the sake of your career, to just pretend that you’re fiscally responsible — that is, to be a deficit peacock.

So we’re paralyzed in the face of mass unemployment and out-of-control health care costs...

...I’m sorry to say this, but the state of the union — not the speech, but the thing itself — isn’t looking very good.

[BiscayneSunrise]

Re: Obama Seeks Freeze on Many Domestic Programs

Perhaps, we should look at government bankruptcy as a good thing.

As in corporations, it is difficult if not impossible, to make necessary reforms. As long as the money is flowing, it is easier to deny the problem, and harder to overcome internal resistance.

Now that governments are facing the financial grim reaper, they are now finally forced to make decisions that would have been political suicide just a couple of years ago.

And, by and large, many of these decisions will be ones that will make for a more modern society tuned in to the realities of the 21st Century.

Yes, there will be some severe social turbulence along the way but that's how history works.

[Jay]

Re: Obama Seeks Freeze on Many Domestic Programs

Here's how it works:

Inflate bubble. Sucker in the plebs. Pop bubble. If someone important gets caught out, pay them back with tax payer money. Inflate again. Continue process until things look really bad and people start using words like oligarchy in public. Have president give soothing words but continue with business as usual. Tighten once again and force IMF type austerity measures on the public sector who now holds the bag. If they don't break, run cycle again. Destroy all state pensions, services, capital, power, and unions. Wring every dollar you can out of the states but don't touch the military or anything that furthers central control. Do this until people scream, then do it some more because you can. Then do it some more.

Now restart new economy. Laugh with your frat buddies on your estancia in Panama.

[GRG55]

Re: Obama Seeks Freeze on Many Domestic Programs

Yes, the Unaffiliateds. This will play well with them. They were beginning to buy into the constant rant of we can cut the deficit by not growing the government and getting rid of waste, fraud and abuse. This has nothing to do with economics and everything to do with politics. Real deficit reduction will come after another round of stimulus, and it has to be done by an outside committee. This will be well forgotten in a week or two.

Just days after the CBO 1.35 T deficit forecast we get a slightly different view from the White House. Are we numb yet...:rolleyes:

Obama Proposes $3.8 Trillion Budget Focused on Jobs

Feb. 1 (Bloomberg) -- President Barack Obama’s $3.8 trillion fiscal 2011 budget puts an emphasis on job creation with $100 billion in additional stimulus spending, along with higher taxes for the wealthy in an attempt to narrow the deficit.

The spending blueprint forecasts this year’s budget shortfall will hit a record $1.6 trillion, following a $1.4 trillion deficit in 2009. The 2011 deficit is predicted to be $1.3 trillion, with deficits remaining above $700 billion for the rest of the decade, according to the projections...