STAR/TRIBUNE
By MARTIN CRUTSINGER , Associated Press
WASHINGTON - President Barack Obama unveiled a multitrillion-dollar spending plan Monday, pledging an intensified effort to combat high unemployment and asking Congress to quickly approve new job-creation efforts that would boost the deficit to a record-breaking $1.56 trillion.
Obama's new budget blueprint preaches the need to make tough choices to restrain run-away deficits, but not before attacking what the administration sees as the more immediate challenge of lifting the country out of a deep recession that has cost 7.2 million jobs over the past two years. "Until America is back at work, my administration will not rest and this recovery will not be finished," Obama declared in his budget message.
Addressing the fact that his budget first projects big increases in the deficit before starting to lower these imbalances, Obama told reporters, "It's very important to understand, we won't be able to bring down this deficit overnight given that the recovery is still taking hold and families across the country still need help."
Obama's budget offers tax cuts for businesses, including a $5,000 tax credit for hiring new workers this year, help for the unemployed and $25 billion more for cash-strapped state governments. All the temporary measures would boost the deficit over the next two years by $245 billion.
The deficit for this year would surge to a record-breaking $1.56 trillion, topping last year's then-unprecedented $1.41 trillion gap, a number which had dwarfed the previous record of $454.8 billion set in 2008 under former President George W. Bush.
The administration is forecasting that deficits over the next decade will add an additional $8.5 trillion to the national debt, even if Congress adopts the administration's package of proposals to trim future deficits starting in 2011. Those include a three-year freeze on spending for government programs, an effort which does not touch popular benefit programs such as Social Security and Medicare and which also exempts defense and homeland security. It also proposes a boost in taxes on the wealthiest Americans, families making more than $250,000 annually, by allowing the Bush tax cuts of 2001 and 2003 to expire.
Republicans were not impressed with Obama's deficit cutting, saying that it fell far short of the bold steps needed in light of the fiscal challenges the country is facing. "This country is sinking into a fiscal quagmire," said Sen. Judd Gregg, the top Republican on the Senate Budget Committee. "These circumstances call for a bold, game-changing budget that will turn things around."
The administration argued that Obama inherited a deficit that was already topping $1 trillion when he took office and, given the severity of the downturn, the president had to spend billions stabilizing the financial system and jump-starting economic growth.
The deficit for this year would be 10.6 percent of the total economy, a figure unmatched since the country was emerging from World War II.
Much of the spending surge starting in 2008 reflects the cost of massive economic stimulus measures passed by Congress to deal with the worst economic downturn since the Great Depression. The surge in the deficits reflects not only the increased spending but also a big drop in tax revenues, reflecting the 7.2 million people who have lost jobs since the recession began and weaker corporate tax receipts.
Obama's new budget attempts to navigate between the opposing goals of pulling the country out of a deep recession and getting control of runaway deficits. The administration insists that once the recession is history, the government will turn its attention to attacking the deficits.
n a bow to worries over the soaring deficits, the administration proposed a three-year freeze on spending beginning in 2011 for many domestic government agencies. It would save $250 billion over the next decade by following the spending freeze with caps that would keep increases after 2013 from rising faster than inflation.
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Before I start, I just wanted to make it clear that I have nothing personal against our president. (Obviously, I don't even know him.) In fact, I think that he is a very respectable and nice individual. The only thing I am not a fan of is his beliefs. So, even though I respect him, I am not going to lie about my own beliefs just to sound politically correct. So here it goes:
ReplyDeleteI believe that we are spending ourselves into oblivion. Thankfully, our previous stimulus package spent $3.4 million for helping create a few part-time jobs by getting new workers to build a tunnel under Highway 27 in Florida to allow turtles to travel underneath, evidently meant to prevent car crashes. (Although, I'm not sure how many crashes are caused by turtles in comparison to every other cause of car crashes, but I think I can guess.) As we continue to spend, the value of the dollar continues to fall, eventually leading to an inflation. Now, our ecomony is doing so horribly that experts say China is surpassing the United States as the world superpower. Personally, I don't necessary see this as a good thing, because of the fact that I think China has a communist/capitalist (fascist) government. I don't believe it would be that great for the rest of the world to depend on China, just like they did to us when we were the superpower. Who knows what could happen when we allow their government to become that powerful. Just to make it clear, I have absolutely nothing against the Chinese people. In fact, I think the Chinese are just as great as the American people. But like I have problems with our government, I also have my fair share of problems with the Chinese government and the CPC, their current ruling political party.
Anyway, as I was saying, it's time to quit spending. We are now in a MONUMENTALLY large amount of debt. Here, see for yourself:
http://www.usdebtclock.org/
How we are going to pay this off, I have no idea. I wish I could tell you, but I'm not an ecomonist. However, I do have a couple good ideas of how to help unemployment: first of all, it's time to crack down of illegal immigration. Sure, they do work quite a bit; however, they are taking the jobs that Americans and legal immigrants who came in from the front door would be able to do. I'm sure that a lot of illegal immigrants are nice people who could easily be good Americans (I doubt all of them are terrorists), but unfortuanately, they are a burden on America economically. They pay little to no taxes and they accept huge amounts of social services. Also, employers refuse to use E-Verify (used to show employee citizenship status) because they want the workers who will accept a low wage. Second, unions. In 2003 to 2008, states with a large amount of unionization had an employment growth of 3.5% while those with very little unionization had an employment growth of over 10%. (U.S. Labor Department) This is because union members have big raises on the contracts that they have with they company they work with, resulting in an economic burden on the private businesses. This, in turn, helps businesses fail, preventing jobs from being created.
You may disagree with me, and that's completely fine. However, I think it's important to understand how much increased government spending means to the future of America. It could be, in your opinion, a good thing, or, in my opinion, a bad one. But I strongly urge you to look into it, so that you can form your own opinion. Basically, I'm just trying to say government spending is just as important as it is boring.
To those who argue that the spending freeze will prevent inflation, I just want to remind you that there is still a HUGE amount of money that will continually be spent. The freeze will not cover all spending.
ReplyDeleteI realize that China does have a Communist form of government. That is why it's called the CPC (Communist Party of China). But economy-wise, I believe that China correlates with fascism in many ways. Fascism has a type of unrestricted capitalism, somewhat reminiscent of China. But other than the economy, China is most certainly Communist.
ReplyDeleteThe big question I have when I see this article is 'Why do we keep spending?' We already have a huge debt, but we just keep deciding to add to it, digging ourselves into a deeper hole. Even little kids know that taking somebodies money and not paying them back is wrong, and we have adults running our country - they should know that that's not the right thing to do! - but we keep taking money from other countries and not paying it back. It makes me angry that Obama has blamed Bush for the national debt, but then he turns around and makes it worse!
ReplyDeleteCapitalism is one of the best systems that a country could ever have. But it cannot pair itself with Communism, otherwise it cannot reach its full potential. In America, Capitalism is combined with our Republic to form a system which has survived to this day. However, capitalism is not perfect. It does not guarantee that the people within capitalism will always stray away from the tendencies to be greedy. That is what has happened to us today. The problem is that the current administration has the mentality that the failing banks are "too big to fail." They should be allowed to fail so that someone else can step up to the plate.
ReplyDeleteBy now I'm sure it sounds like I'm just talking to myself, but I want to make it absolutely clear. I wish we could continue government spending to help create jobs. Unfortuantely, it is not an effective way to help job growth. America has gone to a point in our economy where it is impossible to continually spend and not have the deficit be pushed to myself, or even MY children. There is a better way to get us out of this recession and prevent it from becoming a second depression. You may call me crazy, but have you ever heard of the depression of the early 1920's? No, that's not a typo. Unemployment was at 11.8% and government spending was growing. However, the president during that time, President Harding, thought that the best way to end it was to cut taxes and cut government spending in half. Both progressive Republicans and Democrats thought that was a bad idea, but this actually led to the unemployment rate dropping to 3.2%, later going to 1.8%. Also, this helped lead to the beginning of the Roarin' Twenties, a time, as we know, of great innovation. During the Great Depression, FDR liked the idea of the government over-spending. This led to the unemployment rate of 24.9% in 1933, 21.7% in 1934, 20.1% in 1935, 16.9% in 1936, 14.3% in 1937, and 19% in 1938. So yes, government spending WILL create jobs. However, what Harding was able to do in between 2-3 years, FDR was able to do in 5 years. But these were different times, so perhaps Harding's strategy wouldn't have worked for FDR. What FDR should have done is stopped government spending and let the economy restart, therefore, allowing the local communities to do things on their own. Yes, this would have hurt job-growth for the time being, but in the end, we would have been able to get out of the Depression much faster.
ReplyDeleteHere we go again. Obama is spending money that we don't have for a plan that will do nothing.... again. Cash for Clunkers? total flop. Gave way too much money to people for their old cars spending way too much govt. money in turn and then still not creating any new jobs. People need to wise up and realize that Obama isn't the wonder man that can solve solve everyone's problems with the flick of his wrist. The way I see it is that Obama is making our already sh** economy worse. He's printing more money to try and pay for all of his worthless stimulus packages and sooner or later we are going to end up with an incredible amounts of inflation. We are in debt with china so much now that honestly all China would have to do is say ok we want our money now and then we would be bankrupt and basically owned by China. Im not too wild about the thought of the United States of China and that could easily happen if keep lending their money that we can never pay back. Obama blames Bush for ruining the economy but Obama has spent more money trying to fix everything and everything he has done hasn't even done anything. I'll be honest, im not a fan of Obama... at all but, he has not earned my trust. It's going to be my money thats going to be paying off his screwups and we will never get it all paid off. I never thought our president would be lacking that much common sense.
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