Obama's nightmare budget

President Obama this week came out with his budget proposal for fiscal year 2013. Wow, after reading about its details, I’m impressed. Now before you go into shock, let me explain something. I’m impressed that he is such a leftie that he will never abandon or even modify his fanatic beliefs in higher taxes and reckless spending as a way for America to rebound. Some details are in order.

He makes several claims. For one, he thinks a tax increase on the wealthy and defense spending cuts that will never materialize will help solve our problems. He also asserts that in his second term revenues will soar, outlays will fall, and $1.3 trillion annual deficits will be cut in half.

But let’s review the past four years to see if these promises are based on Obama’s fiscal history. His can claim four years of spending of more than 24% of GDP, the four highest spending years since 1946. In the current fiscal year of 2012, despite talk of austerity, Mr. Obama predicts spending will increase by $193 billion to $3.8 trillion, or 24.3% of GDP. Also, another deficit of $1.327 trillion in 2012, also an increase from 2011, will make it four years in a row above $1.29 trillion. When was the last time that happened? Never. In addition, revenues are at historic lows because of the mediocre recovery and temporary tax cuts that are deadweight revenue losses because they do so little for economic growth. The White House budget office estimates that for the fourth year in a row revenues won't reach 16% of GDP. The last time they were below 16% for any year was 1950.

What is the financial result of these disasters over the past four years? All of this has added as astonishing $5 trillion in debt in a single Presidential term. We as a nation stand at a national debt held by the public (the kind you have to pay back) will hit 74.2% this year and keep rising to 77.4% next year. Economists warn that when debt to GDP reaches 90% or so, the economic damage begins to rise. And this doesn't include the debt that future taxpayers owe current and future retirees through the IOUs in the Social Security "trust fund."

Despite all the terrible news, Obama says this will change in 2013 if he is re-elected. Next year, revenues will suddenly leap to 17.8% of GDP thanks to tax increases on the wealthy, which we are supposed to believe will have little impact on growth. Didn’t someone say they never got a job from a poor person?

Meanwhile, spending will fall by one percentage point of GDP to 23.3%, thanks to the automatic cuts in last year's debt-ceiling bill. But there’s a catch here in this supposed good news. More than half of those cuts are scheduled to come out of defense, which even Mr. Obama's Defense Secretary says are unacceptable. They will be renegotiated next year no matter who wins in November. The cuts also include an estimated $1 trillion in savings in domestic discretionary programs that also won't happen, especially because Mr. Obama's budget proposes to add $350 billion to these programs. His budget also proposes no meaningful reforms in entitlements, which are the fastest growing part of the budget and will grow even faster once ObamaCare really kicks in. Won’t that be dandy?

So what can we count on? One thing only--the monumental tax increase. His plan would raise tax rates across the board on anyone or any business owners making more than $200,000 for individuals and $250,000 for couples. These are the 3% of taxpayers that Mr. Obama says aren't paying their fair share, though that 3% pays more in income tax than the rest of the other 97%.

That’s enough bad news for now. I’ll have one more blog to lay out the rest of the bad news. Thank goodness the G.O.P., weak and inept as it is, controls the House and will drive a stake through the heart of this budget.