May 11, 2009

Does the Deficit Matter?

By Richard Baehr
Barack Obama signaled to the ECNPC (the ever compliant national press corps) last week, that they should make a big deal of his proposed $17 billion in spending cuts for the 2010 fiscal year, many of which (40%) were originally proposed by George Bush a year ago and not accepted by the Democratic controlled Congress at that time. Today comes word that the new estimate for the deficit for 2009 is about $100 billion higher than thought just a month ago (and that incremental deficit, more than 5 times the size of Obama's proposed cuts, will be run up just in the remaining five months of the fiscal year). The 2010 deficit number has also been revised -- also likely higher by nearly $100 billion. Expect more increments to this number as the year goes on. One thing we can count on is that every estimate from the Administration proves to be optimistic and self serving (e.g. the $7 trillion ten year accumulated deficit, that the non-partisan Congressional Budget Office estimated  at...(Read Full Article)