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Out of Control Debt Flashback: Forbes: President Obama: The Biggest Government Spender In World History

Obama Laughing

By Gary P Jackson

As the Establishment Republicans™ prepare to surrender Congress and their responsibility to the American people to President Obama, I thought it might be a good time to take another look at an editorial from last year that appeared in Forbes, written by economist Peter Ferrara.

In the lengthy Forbes piece, Ferrara contends that President Obama is the biggest spender in the entire recorded history of the world, and backs it up with plenty of facts.

Here’s a taste:

The U.S. has never before had a President who thinks so little of the American people that he imagines he can win re-election running on the opposite of reality. But that is the reality of President Obama today.

Waving a planted press commentary, Obama recently claimed on the campaign stump, “federal spending since I took office has risen at the slowest pace of any President in almost 60 years.

Peggy Noonan aptly summarized in last weekend’s Wall Street Journal the take away by the still holding majority of Americans living in the real world

There is, now, a house-of-cards feel about this administration. It became apparent some weeks ago when the President talked on the stump – where else? – about an essay by a fellow who said spending growth [under Obama] is actually lower than that of previous Presidents.

This was startling to a lot of people, who looked into it and found the man had left out most spending from 2009, the first year of Mr. Obama’s Presidency. People sneered: The President was deliberately using a misleading argument to paint a false picture! But you know, why would he go out there waiving an article that could immediately be debunked? Maybe because he thought it was true. T

hat’s more alarming, isn’t it, the idea that he knows so little about the effects of his own economic program that he thinks he really is a low spender.

What this shows most importantly is that the recognition is starting to break through to the general public regarding the President’s rhetorical strategy that I’ve have been calling Calculated Deception. The latter is deliberately using a misleading argument to paint a false picture. That has been a central Obama practice not only throughout his entire presidency, but also as the foundation of his 2008 campaign strategy, and actually throughout his whole career.

Rest assured, Ms. Noonan, that the President is not as nuts as he may seem at times. He knows very well that he is not a careful spender. His whole mission is to transform the U.S. not into a Big Government country, but a Huge Government country, because only a country run by a Huge Government can be satisfactorily controlled by superior, all wise and beneficent individuals like himself. That is why he is at minimum a Swedish socialist, if not worse. Notice, though, how far behind the times he and his weak minded supporters are, as even the Swedes have abandoned Swedish socialism as a failure.

Sadly, as we are learning more and more by the day, a significant number of Americans are ignorant. And even sadder, these ignorant people VOTE. Combine a populace that doesn’t have a clue about what is going on around them [who will believe anything they are told without question] and a corrupt media that will outright lie to help President Obama and his democrats push their anti-American agenda, and you end up where we are right now: In the middle of a complete disaster, and the pending collapse of our nation.

Ferrara continues:

The analysis by Internet commentator Rex Nutting on which Obama based his claim begins by telling us “What people forget (or never knew) is that the first year of every presidential term starts with a budget approved by the previous administration and Congress.” Not exactly.

The previous administration, or President, proposes a budget. The previous Congress approves a budget. And what Congress approves can be radically different from what the President proposes.

As Art Laffer and Steve Moore showed in the Wall Street Journal on Tuesday, President Bush began a spending spree in his term that erased most of the gains in reduced government spending as a percent of GDP achieved by the Republican Congress in the 1990s led by former House Speaker Newt Gingrich, in conjunction with President Clinton. But for fiscal year 2009, President Bush in February, 2008 proposed a budget with just a 3% spending increase over the prior year. Fiscal year 2009 ran from October 1, 2008 until September 30, 2009. President Obama’s term began on January 20, 2009.

Recall, however, that in 2008 Congress was controlled by Democrat majorities, with Nancy Pelosi as Speaker of the House, and the restless Senator Obama already running for President, just four years removed from his glorious career as a state Senator in the Illinois legislature. As Hans Bader reported on May 26 for the Washington Examiner, the budget approved and implemented by Pelosi, Obama and the rest of the Congressional Democrat majorities provided for a 17.9 percent increase in spending for fiscal 2009!

Actually, President Obama and the Democrats were even more deeply involved in the fiscal 2009 spending explosion than that. As Bader also reports, “The Democrat Congress [in 2008], confident Obama was going to win in 2008, passed only three of fiscal 2009’s 12 appropriations bills (Defense, Military Construction and Veterans Affairs, and Homeland Security). The Democrat Congress passed the rest of them [in 2009], and [President] Obama signed them.” So Obama played a very direct role in the runaway fiscal 2009 spending explosion.

Note as well that President Reagan didn’t just go along with the wild spending binge of the previous Democratic Congress for fiscal year 1981 when he came into office on January 20 of that year. Almost no one remembers now the much vilified at the time 1981 Reagan budget cuts, his first major legislative initiative. Then Democrat Rep. Phil Gramm joined with Ohio Republican Del Latta to push through the Democratic House $31 billion in Reagan proposed budget cuts to the fiscal year 1981 budget, which totaled $681 billion, resulting in a cut of nearly 5% in that budget. Obama could have done the exact same thing when he entered office in January, 2009, even more so with the Congress totally controlled by his own party at the time.

Reagan then ramped up the spending cuts from there. In nominal terms, non-defense discretionary spending actually declined by 7.1% from 1981 to 1982. But roaring inflation at the time actually masks the true magnitude of the Reagan spending cut achievement. In constant dollars, non-defense discretionary spending declined by 14.4% from 1981 to 1982, and by 16.8% from 1981 to 1983. Moreover, in constant dollars, this non-defense discretionary spending never returned to its 1981 level for the rest of Reagan’s two terms! By 1988, this spending was still down 14.4% from its 1981 level in constant dollars.

Even with the Reagan defense buildup, which, remember, won the Cold War without firing a shot, total federal spending as a percent of GDP declined from a high of 23.5% of GDP in 1983 to 21.3% in 1988 and 21.2% in 1989. That’s a real reduction in the size of government relative to the economy of 10%, a huge achievement.

In sharp contrast to Reagan, Obama’s first major legislative initiative was the so-called stimulus, which increased future federal spending by nearly a trillion dollars, the most expensive legislation in history up till that point. We know now, as thinking people knew at the time, that this record shattering spending bill only stimulated government spending, deficits and debt. Contrary to official Democrat Keynesian witchcraft, you don’t promote economic recovery, growth and prosperity by borrowing a trillion dollars out of the economy to spend a trillion dollars back into it.

But this was just a warm up for Obama’s Swedish socialism. Obama worked with Pelosi’s Democratic Congress to pass an additional, $410 billion, supplemental spending bill for fiscal year 2009, which was too much even for big spending President Bush, who had specifically rejected it in 2008. Next in 2009 came a $40 billion expansion in the SCHIP entitlement program, as if we didn’t already have way more than too much entitlement spending.

But those were just the preliminaries for the biggest single spending bill in world history, Obamacare, enacted in March, 2010. That legislation is not yet even counted in Obama’s spending record so far because it mostly does not go into effect until 2014. But it is now scored by CBO as increasing federal spending by $1.6 trillion in the first 10 years alone, with trillions more to come in future years.

After just one year of the Obama spending binge, federal spending had already rocketed to 25.2% of GDP, the highest in American history except for World War II. That compares to 20.8% in 2008, and an average of 19.6% during Bush’s two terms. The average during President Clinton’s two terms was 19.8%, and during the 60-plus years from World War II until 2008 — 19.7%. Obama’s own fiscal 2013 budget released in February projects the average during the entire 4 years of the Obama Administration to come in at 24.4% in just a few months. That budget shows federal spending increasing from $2.983 trillion in 2008 to an all time record $3.796 trillion in 2012, an increase of 27.3%.

Moreover, before Obama there had never been a deficit anywhere near $1 trillion. The highest previously was $458 billion, or less than half a trillion, in 2008. The federal deficit for the last budget adopted by a Republican controlled Congress was $161 billion for fiscal year 2007. But the budget deficits for Obama’s four years were reported in Obama’s own 2013 budget as $1.413 trillion for 2009, $1.293 trillion for 2010, $1.3 trillion for 2011, and $1.327 trillion for 2012, four years in a row of deficits of $1.3 trillion or more, the highest in world history.

President Obama’s own 2013 budget shows that as a result federal debt held by the public will double during Obama’s four years as President. That means in just one term President Obama will have increased the national debt as much as all prior Presidents, from George Washington to George Bush, combined.

But this 2012 election is defined for the voters by the future, not the past. And that future is fully revealed by the stark contrast between President Obama’s spending, deficits and debt projected under his proposed 2013 budget, and the projections under House Budget Committee Chairman Paul Ryan’s budget, adopted by the Republican House, and endorsed by presumptive Republican Presidential nominee Mitt Romney.

Despite all the controversy in Washington and in the media over Ryan’s budget, what it all adds up to is just to restore federal spending to its long term, postwar, historical average of 20% of GDP. That stable level of federal spending, with some modest variance, prevailed for over 60 years after the end of World War II, until 2009. Ryan’s budget reduces federal spending from an average of 24.4% of GDP during the Obama years to 20.1% after just 3 years, by 2015.

By contrast, under the budget policies supported by President Obama and Congressional Democrats, federal spending soars to 30% of GDP by 2027, 40% by 2040, 50% by 2060, and 80% by 2080. Obama’s 2013 budget proposes to spend $47 trillion over the next 10 years, the most in world history by far, increasing federal spending by $1.5 trillion above the current CBO baseline. Ryan’s budget proposes to cut that by $6.8 trillion. By 2022, Ryan’s budget would be spending nearly a trillion dollars less per year than President Obama’s budget.

Ryan proposes tax reform to consolidate the current 6 individual income tax rates, ranging up to 35%, to just two rates of 10% and 25%. His budget would otherwise retain the Bush tax rates of 15% for capital gains and 15% for corporate dividends, and repeal the Alternative Minimum Tax. Ryan also proposes corporate tax reform, closing loopholes and reducing the federal corporate tax rate from 35% to 25%, which is roughly the international average. CBO scores these reforms, even with the rate cuts, as again restoring federal revenues to their long term, postwar, historical average of 18.3% of GDP by 2015.

Obama’s budget, in sharp contrast, proposes to increase federal taxes by nearly $2 trillion over the next 10 years above the CBO baseline. The budget projects that under Obama’s tax policies federal income tax revenues will double by 2020, federal corporate tax revenues will double by 2017, and federal payroll taxes will double by 2022

Next year, under President Obama’s policies, the top tax rates of virtually every major federal tax are already scheduled to increase under current law. That is because the Obamacare tax increases are scheduled to go into effect, and the Bush tax cuts expire, which President Obama proposes refuses to renew for singles making over $200,000 a year, and couples making over $250,000. President Obama is now proposing on top of that the Buffett Rule, which would increase tax rates on capital gains and dividends even further. Counting that, next year the top tax rate for capital gains would increase by 100%, the top tax rate on corporate dividends would increase by 100%, the top two income tax rates would increase by nearly 20%, and the Medicare payroll tax again for singles making over $200,000 and couples making over $250,000 would increase by 62% (under Obamacare).

This is all on top of the corporate income tax rate, which counting state corporate rates is nearly 40%, the highest in the world now, except for the socialist one party state of Cameroon. Under the Buffett Rule, America’s capital gains tax rate would be the fourth highest in the industrialized world. Based on historical precedent, these tax rate increases are unlikely to raise anywhere near the revenue projected by CBO, meaning even higher future deficits and debt.

Under Ryan’s budget, even with CBO’s static scoring, the federal deficit in actual nominal dollars would be reduced to $182 billion by 2017, the fifth year of the budget. That compares to $1,327 billion, or $1.327 trillion, today. So in just 5 years, the deficit would be reduced by at least 86%. The deficit under Ryan’s budget would be less than 1% of GDP by 2017, at 0.9%, where it stabilizes for 6 years to the end of the 10 year budget window. Most importantly, given the sharp tax rate cuts in Ryan’s budget, with dynamic scoring the budget would probably be balanced by 2017. That is because in the real world the rate cuts will not lose nearly as much revenue as CBO scores.

Under President Obama’s budget, his own projections show the deficit never gets anywhere near balance. Indeed, the deficit never gets below or anywhere near the former all time record in 2008. By 2022, his own budget projects the deficit rising over the previous 5 years to $704 billion. But if Obama’s comprehensive tax rate increases throw the country back into recession next year, the deficits will soar much higher for several years, to new all time records.

Even under CBO’s horse and buggy static scoring, Ryan’s budget does serve to get federal debt under control and avoid any debt crisis, putting federal debt held by the public on a declining path from 77% of GDP in 2013 to 62% by 2022. That debt continues on a sharp decline from there, as the long term effects of Ryan’s structural entitlement reforms phase in. Debt held by the public is reduced to 53% of GDP by 2030, 38% by 2040, and 10% by 2050. That means the national debt is all but paid off by 2050, and would be soon thereafter. In fact, under dynamic scoring it probably would be paid off by then.

In stark contrast, on our current course, under President Obama’s budget policies, federal debt held by the public rockets to 140% of GDP by 2030, 220%by 2040, and 320% by 2050, on its way to over 700% by 2080. That would undoubtedly create a Grecian style sovereign debt crisis for America before that point.

I’m not a fan of Paul Ryan’s plan, but in the context of a presidential election, I understand why Ferrara used it to contrast Obama’s radical, out of control spending.

Ryan’s plan simply isn’t bold enough. It doesn’t cut spending anywhere near it needs to be, and doesn’t do it quick enough.

We keep forgetting that while our $17 TRILLION debt, which will be well over $20 TRILLION before we are finally rid of Obama in 2017, we also have over $90 TRILLION in unfunded liabilities, which include Social Security and other entitlements promised. It’s 100% unsustainable. Obama and his democrat party doesn’t care. Sadly the Republican party “leadership” doesn’t care enough to fight.

Dedicated to Obama:

Feel free to add your own “tribute” to Mr Obama.

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Filed under In The News, Politics

In Which I Try To Figure Out Why Forbes Would Hire A Complete Imbecile

By Gary P Jackson

Complete imbeciles, like complete morons, are rare, but it looks like Forbes has cornered the market on both, and with just one single writer!

I’ve followed Sarah Palin since her earliest days as Governor of Alaska, and remember when she got nothing but glowing press, as the best and most popular governor in the nation. I’ve also watched as the corrupt left wing media lied about her, and her record. I’ve watched as “journalists” sat around and just made things up about Sarah, her family, and close friends.

It’s rare when these pundits have the courage to actually challenge her on policy. Whenever they do, they come away looking stupider than before.

Case in point, the last time someone challenged Sarah was after she wrote an op-ed for the Wall Street Journal warning about the disastrous quantitative easing, the practice of the US buying up it’s own debt, and printing money wildly. Sarah was one of the first to speak out against this insane practice. Months before the rest caught up to her.

One of the Journal’s hack writers, Sudeep Reddy, took at shot at her and got the smackdown of his life! Not only did Sarah take him down, the editorial board of the Journal would side with the former Alaska Governor, over their own writer!

It’s no wonder pundits would rather just sit around and make stuff up, rather than try and debate substance with the best governor in the country. The one who our Whitney Pitcher wrote: Governor Palin–Leading the Fight on Debt and Liabilities, describing how she had the best record of any governor in the GOP field for cutting spending and lowering liabilities, all while creating a $12 billion budget surplus. Sarah did this in good times, when her legislature wanted to spend like drunken sailors, and money was pouring in like water over Niagara Falls!

That brings us to Forbesjournalist” [snort] John McQuaid who tweeted last week:

In which I try to figure out what @SarahPalinUSA is up to

McQuaid included a link to a nonsensical rambling entitled Sarah Palin Gets Subversive.


Quite possibly the dumbest man alive

McQuaid, who writes for a FINANCIAL website, seems dumbfounded that Sarah Palin wrote such a blistering op-ed in the Wall Street Journal entitled How Congress Occupied Wall Street.

Predictable, when every serious human being gets where Sarah Palin is coming from, McQuaid starts out with the same tired old moronic talking points that imply Sarah is doing all of this for nothing more than money, and getting her name in lights.

Oh, at the end, he grudgingly admits Sarah might be on to something with her talk of corruption, but still makes sure to let Forbes readers know that she’s just an opportunistic politician, not a principled reformer.

With two books, millions of online articles, not to mention the Undefeated, a movie ENTIRELY devoted to showing how Sarah Palin has fought massive corruption since her earliest days in politics, you’d think a writer for a big time financial rag would have been at least curious, and exposed himself to the truth! Google even works for stupid people!

In one of my longer rants, I noted that many people, including democrats like Mickey Kaus, are calling Sarah’s speech in Iowa, the Saturday before Labor Day, one of the great speeches of all time. The speech was about crony capitalism, and massive corruption in politics. Sarah hammers both parties.

After Kaus’s article, lefty Joshua Green tweeted that Kaus was correct and that Sarah had the record to back up the strong talk

Sarah’s Iowa speech is now being compared to “The Speech” Ronald Reagan made in 1964.

What Sarah Palin did in Alaska, cleaning up massive corruption, is legendary.

Working as Chairman of the Alaska Oil and Gas Compact Commission, she was Alaska’s top energy regulator, Sarah found serious corruption, mostly within the Republican Party.

This included wrong doings by fellow commissioner Randy Ruedrich, who also happens to be the Chairman of the Alaska Republican Party, and one of the state’s most powerful men.

When Sarah went to her boss, Governor Murkowski, and reported the issues, she was told to sit down and shut up. Alaska’s Attorney General threatened prosecution if she went public with the scandals.

Of course we all know what she did next. Sarah quit the best job she had ever had, at that point, gave up a six figure salary, and went to town!

When the dust settled, Ruedrich was forced to pay the largest fine in Alaska history. The AG was forced to resign, and of course, Sarah Palin would defeat Frank Murkowski in a landslide in the GOP primary, and go on to win the general, defeating popular ex-governor, Tony Knowles, in a convincing manner as well.

When I first learned of Sarah Palin in early 2007, the FBI was still frog marching corrupt Republican politicians off to prison!

There was actually a thing called the “Corupt Bastards Club” filled with corrupt Republican politicians, who had caps made up with “CBC” emblazoned on them! These jackasses proudly wore their caps in public, giving the proverbial finger to the Alaskan people!

As Governor, Sarah helped create massive ethics reforms. She made cronyism illegal.

She cleaned up the corrupt ties between politics and Big Oil, and even reformed the way Big Oil paid Alaska for the oil and natural gas it harvested. For years Big Oil had been robbing the Alaskan people, who own that oil, blind.

If Sarah Palin was just in all of this for the money, she could have become quite wealthy by just going with the flow. Instead she committed political suicide [if you listened to the “conventional wisdom of the day] quit a job that paid well over $100,000 a year, and took on the entire Alaska political system! And it wasn’t like she, and her husband Todd, who worked in the oil fields, were anything even resembling rich!

Oh, and let’s not forget that Alaska’s legislature wanted to give both her, and her Lt. Governor, a $25,000 a year raise. Both she and her Lt. turned the money down.

Sarah also famously fired most of her staff at the Governor’s Mansion, including the executive chef, and drove herself to work, in her own car. She felt saving other people’s money was better than living a life of luxury with it.

It’s one thing to have a difference of opinion on policy, but “journalists” like John McQuaid, who bring nothing but grade school level snark, devoid of any substance, are pathetic.

Even Governor Palin’s sharpest critics acknowledge that she is indeed a principled reformer who has a solid record of taking on corrupt politicians in both political parties, and cleaning things up. Only the most dishonest of hacks ignore this in their writings.

Maybe McQuaid should watch Peter Schweizer’s appearance on CBS’s 60 Minutes and read his book: Throw Them All Out maybe then he’ll understand where Sarah Palin is coming from. Peter is Sarah Palin’s top adviser, and a man on the same mission she is to clean up Washington, and run the corrupt bastards out of politics forever!

Meanwhile we may have uncovered video from McQuaid’s college years:

Possibly some video from McQuaid’s life before “journalism“: [he’s driving the AMC Gremlin]


Filed under In The News, Politics, sarah palin