King Obama, Slayer of Growth and Prosperity
Remember, when Obama was lying campaigning and promised that for every $1 in new revenue (taxes) that Republicans would agree to, there would be $3 in spending cuts? And that he was proposing a reasonable tax increase of just $800 billion?
Yeah..that seems like a lifetime ago, doesn’t it.
His new plan — basically the same one that received zero votes (for either party) the first time he submitted it — would instead raise taxes almost $3 for every $1 in spending cuts,which would raise a doubly-reasonable $1.6 trillion dollar in new taxes.
Via AEIdeas:
Now, according to Obama’s math, his “balanced” plan cuts the projected cumulative debt by $4.4 trillion over ten years with 36% of the reduction coming from $1.6 trillion in tax increases — 80% from wealthier Americans, 20% from business. So, basically, $2 in spending cuts for each $1 in tax hikes. “Balanced.”
But once you begin to dig into the numbers, the plan doesn’t look balanced at all.
Of the supposed savings, then, $1.6 trillion comes from tax hikes and $577 billion comes from spending cuts, not counting saved interest. So 73% of the savings comes from taxes, 27% from spending cuts. That’s $3 of tax hikes for every $1 of spending cuts.
Even if you include interest savings, 60% of the debt reduction comes from tax hikes. Obama is making the exact mistake Europe is making by employing a tax-hike heavy version of fiscal austerity.
Actually, that’s not a mistake by Obama — that’s a feature of his plan.
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The problem is (well, there’s lots of problems, but one of them is) this: when a politician says he’s going to raise taxes by $3, or by $1.6 trillion, I believe him. But when he says he’s going to cut spending by $577 billion, or by one cent, I don’t.
If history is any indication, then if taxes go up $1.6 trillion, then spending will go up by about $2 trillion.
In the spirit of bipartisan cynicism, I would also like to point out that the above statement is just as true of R’s as it is of D’s.
The last time we had a balanced budget, we had a D president with an R congress.
Of course, since the beginning of the BHO administration, we haven’t had any kind of a budget, balanced or otherwise.