We noted the other day the $2 trillion increase in deficit projections by Obama, and the fact that the self-inflicted profligacy of his administration likely forced the reappointment of Ben Bernanke as Fed Chairman. Irwin Stelzer has some similar reflections on the revised and even more gargantuan deficits:

the new estimate assumes that Medicare and Medicaid spending will be cut by $622 billion, even though Congress has made it known that it is reluctant to make any such cut. Then there is the $600 billion in revenue included for the sale of emission permits, despite the fact that the House has given away so many permits in order to buy support for the cap-and-trade emission-reduction that the program will produce at most $450 billion.

Those two items alone come to almost another trillion dollars in red ink. Throw in another trillion-plus for Obamacare, and it is no surprise that senior economist Bill Gale, at the liberal Brookings Institute, says that the deficit will hit over $10 trillion over the next decade, a figure he finds “deeply alarming”.

This year, the deficit will come to 11.2 percent of GDP, and by 2019 the debt will be equal to 76 percent of the value of the nation’s output of goods and services, almost double the 41 percent when Obama took control of the nation’s finances. No problem, say White House economists. Unsustainable, says Warren Buffett, among others.

Obama’s plans are outrageous, but reality has a way of intruding when the plans are unfinancible, as Obama’s patently are. Bill Clinton was brought to heel by the bond market; perhaps that will become true of Obama’s plans as well. Clinton fumed during his first year in office: “I hope you’re all aware we’re all Eisenhower Republicans. We’re Eisenhower Republicans here, and we are fighting the Reagan Republicans. We stand for lower deficits and free trade and the bond market. Isn’t that great?” As a matter of fact, yes it is.

This entry was posted on Tuesday, September 1st, 2009 at 8:11 am and is filed under business, Democrats, General, Republicans. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.