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AP Says Deficit Pledges Will Probably Fail

Some surprisingly harsh “analysis” from the Associated Press:

Analysis: World leaders take the deficit pledge

By MARTIN CRUTSINGER (AP)

June 28, 2010

TORONTO — World leaders made bold pledges to cut their spiraling budget deficits but will probably fall far short of their lofty goals.

After spending massive amounts of money to rescue the global economy from the worst downturn in decades, the Group of 20 major industrial and developing nations have reversed course and promised to cut their deficits in half in terms of the global economy in just three years.

This pledge, by nations which represent 85 percent of the global economy, would represent a sea change in how the world’s major economies are handling their finances.

It could usher in sizable tax increases and massive cuts in government programs, including popular benefit programs such as Social Security and Medicare in the United States.

You can already see where this “analysis” is headed. It is intended to show us that we will have to follow the rest of the world and raise taxes. Even though Mr. Obama and the Democrats hate the idea of raising taxes.

President Barack Obama and other leaders in their closing news conferences on Sunday insisted that they really meant what they said, sounding like the dawning of a new age of austerity was just around the corner

The Europeans might very well mean it, and they might actually pull it off. Otherwise, they will face the same situation that Greece is facing, only a thousand times more powerful. And there will be no on to bail them out.

But there will be no such "austerity" in the United States. Not under Mr. Obama and the Democrats. After all, they have an election to buy.

There will just higher taxes. Government will expand and spending will continue to rise, just as it always has. Even after November, since 2012 is just around the corner.

The deficit cutting pledge, included in the G-20 joint communique issued Sunday, certainly sounded dramatic. The developed countries promised to cut deficits in half in three years as a percentage of their total economies and said they would stabilize their total debt burdens by 2016.

For the United States and most of the other nations, that would be a remarkable turnaround, especially from the past two years, a period when deficits soared as government’s boosted spending and cut taxes in an effort to keep the 2007-2009 Great Recession from becoming a repeat of the Great Depression of the 1930s.

Is there any real evidence anywhere that “spending massive amounts of money” did anything to turn the global economy around?

In actual fact, Europe was largely spared the Great Depression of the 1930s. Only Germany suffered, and that was mostly due to its World War I debts and its dependence on the US for reconstruction loans.

And the massive government spending in the US may have very well prolonged the Depression here by 15 years.

The U.S. deficit hit an astonishing $1.42 trillion last year, the highest in history, and analysts think it will show only a slight improvement to $1.3 trillion this year.

Obama’s budget projects the deficit will never fall below $707 billion over the next decade.

The AP has finally noticed that the US deficit is “astonishing.” Funny, how they never mentioned any of this when they were pushing for the passage of the most expensive entitlement in the history of the nation — ‘healthcare reform.’

However, even these seemingly grim numbers would represent an improvement in the deficit picture that would allow Obama to meet one of the deficit targets — cutting the red ink in half by 2013.

Actually, Mr. Obama has repeated pledged to ‘halve the deficit’ by the end of his first term. It now looks like that deadline will go the way of all of his other deadlines.

His spending plan released last February has the deficit falling from 10 percent of GDP last year to 4.2 percent of GDP in 2013, a cut of more than half.

All of which is beyond even ‘voodoo economics.’ Much of this reduction is based on the fantasy that his ‘healthcare reform’ will save billions of dollars. When, in fact, it will have the opposite effect.

Obama does miss the other target of getting total debt stabilized by 2016. His budget shows that the debt held by the public, which doesn’t count what is owed to the Social Security trust fund, would keep rising from 56 percent of the economy this year to 69 percent of the economy a decade from now and not stabilize by 2016, as the G-20 target calls for.

But Obama insisted in his closing news conference Sunday that his administration has a plan to meet the G-20 goals. That effort includes getting recommendations from a deficit commission due to report in December on how to trim spending further in such areas as government benefit programs.

Hilarious. Mr. Obama plans is to get a report from a commission about how to cut the deficit. This is what passes for ‘having a plan’ in the era of Obama.

And, of course, the post-election report from Mr. Obama’s “deficit commission” will not dwell much on spending cuts. But it will demand a plethora of new and higher taxes, including a VAT tax. All of which will be piled upon the tax increases that are already coming in 2011.

The trouble is that Congress has shown little enthusiasm for making the tough choices on taxes and entitlement programs that will be needed to get the U.S. deficit down to 3 percent of GDP, the level economists believe would stabilize the debt burden.

And lawmakers in other countries, who also have to face voters, have shown a similar reluctance

Actually, the Europeans are finally getting serious about cutting their spending because of recent elections, in which conservatives have been trouncing the socialists.

Obama said he would force Congress next year to address the deficit problem, which Republicans in Congress have made a major issue and polls show is eliciting growing concern among voters.

"Next year when I start presenting some very difficult choices to the country, I hope some of these folks who are hollering about deficits and debt step up, because I’m calling their bluff," he said.

But Obama is likely to find that lawmakers are much more willing to talk about the deficit than take the painful votes needed to do something about the deficit.

You see, according to the AP, Mr. Obama desperately wants to reduce the deficit, but the mean old Congress won’t let him. In truth, it would be child’s play for him and his Democrat majority to reduce the projected deficit tremendously.

Congress could start by repealing ‘healthcare reform’ before its disastrous policies can take effect. Mr. Obama could also return the nearly half of the $787 in ‘stimulus money’ that is still unspent to the US treasury. Mr. Obama could use the money that the banks have paid back from their TARP loans to reduce the deficit.

And, the federal government could also follow the European actions, and like the British, cut government spending by freezing or reducing government hiring and salaries and by reducing or eliminating a thousand wasteful and useless programs and agencies.

But Mr. Obama and the Democrats will not do any of these things because they do not care one iota about the deficit. They simply want to create a ‘deficit crisis’ so that they can hike taxes even more and continue to expand their power and buy the votes they need to stay in office.

This article was posted by Steve on Monday, June 28th, 2010. Comments are currently closed.

6 Responses to “AP Says Deficit Pledges Will Probably Fail”

  1. TwilightZoned says:

    “Obama said he would force Congress next year to address the deficit problem, which Republicans in Congress have made a major issue and polls show is eliciting growing concern among voters.”

    As Barry has proven time and time again…what he says is generally the opposite of what he does. I have complete confidence he’ll develop some way around cutting and actually increase spending. After all, how could one collapse the system otherwise? (sarc)

    • JohnMG says:

      …..“Obama said he would force Congress next year to address the deficit problem…..”

      That won’t take much effort. By next year it’s more likely that congress will force Obama to do something about the deficit……right before they force Obama to leave the White House.

      (I can dream, can’t I?)

  2. proreason says:

    Michael Barone’s brilliant insight.

    How many times do you read something based on an idea you haven’t heard before.

    http://article.nationalreview.com/437227/why-obamacare-is-unpopular/michael-barone

    Barone suggests that the marjority of Americans are either property owners or have the prospect of getting there. And they aren’t going to sell out their current or future property rights for penney-anti bribes. That’s why the Obamy agenda is so unpopular.

    Note that this is diametrically opposed to the prevelant liberal theory, which many of us also fear, that when the taxpayer base goes below 50%, than the mad-rush to socialism will complete the marxists takeover of the country.

    He doesn’t carve it out specifically, but the core idea (God please make him right) is that property rights are so important that they easily trump other financial bribes….like those of the liberal agenda. He doesn’t mention income taxes…but that is the logical extension. Example, is a person with a home worth $150,000, willing to align with a party that will put a couple of thousand dollars a year in the person’s pocket if it there appears to be a chance that they will be coming after your property next? Property ownership makes it more than a matter of principle.

    Also note that a person can easily be “liberal” until a marxist agenda actually begins to be implemented. It’s fine and dandy to be for all of that pie-in-the-sky stuff when it isn’t hitting home. But when, all of a sudden, the rhetoric is translated into bullets that begin to splat around your life and your house and your property, then it suddenly doesn’t sound quite as wonderful.

  3. untrainable says:

    I love it. The AP is already prepping us for failure. They KNOW that Obama isn’t going to reduce anything except our liberty, and our individual cashflow. But you can bet that when the official numbers come out, Obama’s failure to cut the deficit will be a “surprise”. And the higher deficit will be “unexpected”.

  4. Right of the People says:

    “Obama said he would force Congress next year to address the deficit problem,”

    He knows the House and probably the Senate is going to be in Republican hands next year so he already has the blame game set up for when they will propose legislation to reduce the deficit and he will veto it. He’ll give some lame excuse like it doesn’t go far enough or some other pile of excrement. Of course then he’ll make one of his few rare appearances on national TV (sarc) and cry about how the evil and mean Republicans are keeping him from helping the country.

    Even if he can’t get any more of his agenda through because congress will block him, they won’t be able to repeal the odious bills he’s already passed because he’ll veto anything that crosses his desk.

  5. proreason says:

    Imagine how the US economy will react if will stop the insane sending in it’s tracks this November and elect people in 2012 who will cut taxes and roll-back the socialist programs from the last 80 years. And I’m not talking about draconian cuts to Social Security and Medicare….just some smart adjustments to permanently align them over time with the country’s demographics, plus the elimination of massive drains on the country like the Departments of Education, Commerce, Transportation and Energy, and of course the dagger aimed directly at the heart of America, ObamyCare..

    The boom will make the post-WWII boom look like a Sunday stroll. That would be the revolution of all time.

    Investment will flood into this country like Niagra Falls. You will be able to physically hear the sucking sound of capital flowing into this country. We will have to import workers and can make them pay huge amounts just for the priviledge of coming into the the country.

    And the boom will start the instant the new policies are announced. It won’t have to wait for anything to happen. The world knows what we have done in the past. They know the creativity is still alive that can revolutionize medicine, transportation, communications and agriculture…..again.

    The world euporia will be mind-boggling. Wealth will overcome the Obamy depression in a few years and climb to heights we can’t even imagine today.

    Christie, Palin, Rubio……any of those three and perhaps others can make it happen.

    All it will take is a leader with guts who will say that in America, we are returning to our roots of freedom and innovation, and rejecting false prophets who arrogantly proclaim that life is impossibly complex without the guidance of a tiny group of self-proclaimed elites who put their judgement above the wisdom of millions who understand and carry on the traditions that have made this country great.

    If that self-proclaimed elite know so much, they damn well better prove it in the next few months, rather than continuing to be the total failures that we know them to be


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