Deficit Skyrockets to $1.8 Trillion
The White House predicts the budget deficit will top $1.8 trillion, four times 2008’s record. Obama has sought to blame the deficit on Bush.
But Obama is even more culpable. “Congress, under Democratic control in 2007 and 2008, held the purse strings that led to the deficit.” And “then-Sen. Obama voted in favor of the 2009 budget.”
To be sure, Bush’s bailouts have also increased the deficit. But Obama supported them and wanted to make them even more expensive. As the Associated Press notes, “Obama supported the emergency financial bailout package in Bush’s final months – a package Democratic leaders wanted to make bigger.”
Moreover, the deficit was compounded by Obama’s $800 billion stimulus package, which will be spent mostly in 2009 and 2010. The Congressional Budget Office says the so-called stimulus will actually shrink the economy “in the long run,” contrary to Obama’s claims that it was needed to prevent “irreversible decline.”
Even in the short run, the stimulus will create few jobs. The White House now admits that there will be no job growth until 2010. It’s not surprising, since the stimulus package subsidizes sectors where unemployment is low — like education, health care, and state government — and not sectors where it is high — like construction, transportation, and production jobs. (Apparently, only 3.4 percent of the stimulus will go to highway construction, and only 5.9 percent for transportation in general — a small amount compared to the amount of money it showers on state governments, which are using it to continue wasteful spending and lucrative pension and health benefits for state employees.).
The deficit is also increasing because of Obama’s $250 billion mortgage bailout, which reduces the mortgage payments of irresponsible borrowers to a ridiculously low level, even if they have high incomes, and live in $700,000 homes.