Posted on October 30, 2012
Obama’s $4 Trillion Tale
The deficit is not cumulative
President Obama’s pamphlet, “A Plan For Jobs & Middle-Class Security,” has been laughed off as a flimsy collection of dubious boasts and campaign buzzwords, but there’s one claim in it that deserves more attention. Among the seven bullet points in his agenda is “Cutting The Deficit By More Than $4 Trillion.” Just in case you think that was a misprint, the booklet reiterates that “President Obama’s plan reduces the deficit by more than $4 trillion over the next decade."
That’s a mite ambitious, considering that the deficit, as alarmingly high as it’s been in recent years, has never been anywhere near $4 trillion. Assuming the projected 2012 deficit of $1.1 trillion is accurate, that means Obama is promising to produce a budget surplus of $2.9 trillion. In order to reach that figure, the government would have to take in about $300 billion more in annual receipts than ever before, while spending absolutely nothing. Even he is not that completely unrealistic, so what in the world is he talking about?
The president’s FY 2013 budget gives us a pretty good hint, when it complains that he inherited “a 10-year deficit of more than $8 trillion – and this figure grew even larger as the depth of the recession became clear.” His use of a 10-year time frame is doubly convenient, in that it pins all the Obama deficits on George W. Bush, and then credits Obama for projected reductions that his policies will assuredly not produce. There’s a more fundamental flaw in this argument, however, in that the federal deficit is an annual measurement. There is no such thing as a cumulative, 10-year deficit.
When a deficit is said to have been “cut,” that can only be in comparison to the deficits from previous years. It cannot be cut in comparison to somebody’s projection of what the current deficit was going to be. The way Obama figures it, the deficit is capable of being cut and increased simultaneously. Let’s say, for instance, that last year’s deficit was 10(x). Let’s also say that an estimate for this year’s deficit is 15(x), but that the actual amount turns out to be 12(x). The way that deficits have always been calculated, this is an increase of 2(x) over the previous year. Yet if we’re measuring it the way Obama does, we can say that we “cut” the deficit by 3(x).
A true $4 trillion deficit reduction over ten years would mean that there’s a $4 trillion difference between the 2012 and 2021 annual deficits. The president’s budget, however, projects a 2021 deficit in excess of a trillion dollars, only $100 billion lower than this year.
Obama’s deficit reduction promise is about as meaningful as if he’d promised to make us all unicorn and moon cheese sandwiches, just as soon as the ingredients became available. The sum of the next 10 deficits will be $4 trillion less than it otherwise might have been, had it been $4 trillion greater. Even under the highly optimistic projections in his budget, the deficit goes up instead of down six times in the next decade, yet those, too, are defined as “cuts.” In addition, Obama’s successor is not bound to follow his blueprint, which makes the last six years’ projections totally irrelevant, other than in helping to concoct that $4 trillion figure.
That’s about as serious a proposal as we should have expected from a president who:
* thinks the best way to spur economic growth is through unprecedented, gargantuan amounts of deficit spending;
* promised to close Guantanamo prison without any consideration for what he’d do with the detainees;
* doesn’t see how imposing severe economic punishments on job creators might impair their ability to create jobs;
* believes he can rid the world of nuclear weapons by diminishing America’s arsenal, in hopes that everyone else will follow along;
* selected Joe Biden as his vice president, thinking him to be an expert on foreign policy, and;
* cited his own nomination as “the moment when the rise of the oceans began to slow and our planet began to heal.”
In 2008, a majority of voters were willing to cast plausibility aside, and run off with Barack Obama into his liberal dreamworld. By the time you’re reading this, we might already know whether or not we’re doomed to remain there. If we are, then there's nothing left for us to do but wait for Obama to serve us a great big something sandwich, and it won’t be unicorn and moon cheese.
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