Archive for the ‘CBO’ Category

Obama Spending, Tax Plans Likely Out The Window As CBO Predicts Much More Debt

March 20, 2009

President Barack Obama‘s budget would generate deficits averaging almost $1 trillion a year over the next decade, according to the latest congressional estimates, significantly worse than predicted by the White House just last month.

The Congressional Budget Office figures, obtained by The Associated Press Friday, predict Obama’s budget will produce $9.3 trillion worth of red ink over 2010-2019. That’s $2.3 trillion worse than the White House predicted in its budget.

By ANDREW TAYLOR, Associated Press Writer

Worst of all, CBO says the deficit under Obama’s policies would never go below 4 percent of the size of the economy, figures that economists agree are unsustainable. By the end of the decade, the deficit would exceed 5 percent of gross domestic product, a dangerously high level.

The latest figures, even worse than expected by top Democrats, throw a major monkey wrench into efforts to enact Obama’s budget, which promises universal health care for all and higher spending for domestic programs like education and research into renewable energy.

Barack Obama
Getty Images

The dismal deficit figures, if they prove to be accurate, inevitably raise the prospect that Obama and his allies controlling Congress would have to consider raising taxes after the recession ends or paring back his agenda.

Read the rest:

“Look Beyond the Smoke Screen”
Michelle Malkin

Bush Defiecit not nearly this large: Related:

Stimulus will lead to ‘disaster,’ Republican warns

February 9, 2009

Well, it sorta had to happen after President Barack Obama called the lack of his stimulus bill and the resultant cataclysm a “catastrophe.” 

Now a Republican Senator, Richard Shelby, Republican of Alabama, told CNN’s “State of the Union” that the stimulus and efforts to shore up the struggling banking system will put the United States on “a road to financial disaster.”

Hoisted on his own petard?

Speaking of the stimulus and the huge debt now anticipated for the United States, Shelby says we’ll be on “a road to financial disaster.”

“Everybody on the street in America understands that.  This is not the right road to go. We’ll pay dearly.”

Shelby is the ranking Republican on the Senate Banking Committee.

Senate Banking Committee Chairman Sen. Christopher Dodd, D-Conn., ... 
Senate Banking Committee Chairman Sen. Christopher Dodd, D-Conn., left, waves as he and the committee’s ranking Republican Sen. Richard Shelby, R-Ala., arrive on Capitol Hill in Washington, Thursday, Feb. 5, 2009, prior to the start of the committee’s hearing on the Troubled Asset Relief Program (TARP).(AP Photo/Susan Walsh)

Polls seem to shore up what Shelby said, with more than 50% of voters now against or unsure of the stimulus according to the Rasmussen Reports.

That’s why President Barack Obama is hitting the campaign trail today and tomorrow and has scheduled a prime time news conference tonight.  The president is working overtime in an effort to convince the American people that the stimulus, and the debt that goes with it, are needed and necessary.

Obama’s foes include the American people, who are largely against the stimulus, the Republicans who have a decades long commitment to fiscal responsibility and lower taxes, a flock of very bad spokesmen trying to peddle the presidents plan,  dozens of economists, Democratic leaders who have failed miserably to explain why this stimulus is so good and the Congressional Budget Office.

The CBO said, “CBO’s basic assumption is that, in the long run, each dollar of additional debt crowds out about a third of a dollar’s worth of private domestic capital.”

The CBO analysis was requested by Senator Chuck Grassley a Republican from Iowa.

Grassley was unable to deliver the facts on the Senate floor on Wednesday due to what one staffer called the “carnival atmosphere and overdrive speed” of the Senate during the stimulus debate.

Sunday morning talk shows featured talking heads on both sides of the stimulus issue.

“Those who presided over the last eight years — the eight years that brought us to the point where we inherit trillions of dollars of deficit, an economy that’s collapsing more rapidly than at any time in the last 50 years — don’t seem to me in a strong position to lecture about the lessons of history,” Obama economic advisor Larry Summers told ABC’s “This Week.

John McCain said, “We need to spend money on infrastructure and on other programs that will immediately put people to work. But this is not it.”

Sen. John McCain, R-Arizona, is last year’s GOP presidential nominee.

McCain appeared on the CBS program “Face the Nation.”

“We’re going to amass the largest debt in the history of this country, by any measurement, and we’re going to ask our kids and grandkids to pay for it,” McCain said.

But Shelby said we are doing the economic recovery effort backward.

“Until we straighten out our banking system, until there is trust in our banking system, until there’s investment there, this economy is going to continue to tank,” he said.

On the CBO:
 Stimulus Debt May Destroy U.S. Growth for 10 Years

Obama Economic Chief: House, Senate Stimulus Chasm Still Means Trouble

Stimulus? Senator Unleashes “Gay Insult” During Debate Tongue-Lashing

Obama, Dems Go To a Spa After Tough First Weeks But No Stimulus

 Senator Critical Of President for Not Leading on Stimulus; Calls Effort “Crazy,” Bill “Monstrosity”

Stimulus: Its All In His Hands; Spokesmen Fail To Explain

Stimulus: Democrats Exhibit Zero Convicing Arguments, Spokesmen


Stimulus Debt May Destroy U.S. Growth for 10 Years

February 5, 2009

The Congressional Budget Office says the economic stimulus will, in the short run, help the economy.  But, it says, the huge American debt that will be fueled by the stimulus will “crowd out” future investment in America.  This debt and restraint on investment will lower gross domestic product (GDP) for about 10 years.

The CBO also favors the Senate version of the simulus now under discussion.
“CBO’s basic assumption is that, in the long run, each dollar of additional debt crowds out about a third of a dollar’s worth of private domestic capital,” the CBO said.

The budget office said the bills would help GDP and save or create jobs in the short term, but estimated that under the Senate bill, GDP would be 0.1 percent to 0.3 percent lower by 2019 than if no action is taken.

The CBO analysis was requested by Senator Chuck Grassley a Republican from Iowa.

Grassley was unable to deliver the facts on the Senate floor on Wednesday due to what one staffer called the “carnival atmosphere and overdrive speed” of the Senate during the stimulus debate.

Senator Fighting Obama Stimulus Leaves Chamber in Disgust

Grassley said “we need to look before we leap” on the stimulus.

He said, as is often done according to Senate rules, “I’d like the rest of my remarks read into the record.”  Then he added as he left in disgust, “This is a missing piece of the puzzle and [barely audible] nobody cares.”

In a letter to Senator Chuck Grassley, the CBO said:

In contrast to its positive near-term macroeconomic effects, the Senate legislation would reduce output slightly in the long run, CBO estimates, as would other similar proposals. The principal channel for this effect is that the legislation would result in an increase in government debt.  To the extent that people hold their wealth in the form of government bonds rather than in a form that can be used to finance private investment, the increased government debt would tend to “crowd out” private investment—thus reducing the stock of private capital and the long-term potential output of the economy.

The negative effect of crowding out could be offset somewhat by a positive long-term effect on the economy of some provsions—such as funding for infrastructure spending, education programs, and investment incentives, which might increase economic output in the long run. CBO estimated that such provisions account for roughly one-quarter of the legislation’s budgetary cost. Including the effects of both crowding out of private investment (which would reduce output in the long run) and possibly productive government investment (which could increase output), CBO estimates that by 2019 the Senate legislation would reduce GDP by 0.1 percent to 0.3 percent on net.