O's FUNNY MATH
Talk about fuzzy math. President Obama claims higher taxes will account for a mere third — $1 trillion — of his proposed $3 trillion debt reduction over 12 years, not counting less interest expense. Wrong. The actual number is probably around 50 percent of $4 trillion in savings — some $2 trillion — and could be closer to 60 percent. (More details below.) Instead of offering a template for a Grand Compromise, Obama seems to have created a Grand Obfuscation.
This is just one example among many that shows how Obama’s much-hyped new budget plan is actually neither new nor a budget nor a plan. To the extent that it’s even a “framework” — to grant the White House its preferred descriptor — it’s one whose ideas and goals are precariously fastened together by the chewing gum and sticky tape of rosy economic assumptions and fiscal opacity. Then again, the core purpose isn’t budgetary balance but political persuasion.
Standard & Poor’s lowered its outlook for the United States from “stable” to “negative,” and said there is a one in three chance it will downgrade the U.S.’s triple-A credit rating in the next couple of years. We’ve enjoyed that credit rating since 1917. Barack Obama can cook up entitlement schemes as much as he likes, but if America loses its ability to borrow money on favorable terms there will be no safety net big enough to catch us all.
And what is the president’s message at this defining crisis moment? The New York Times reports, “Mr. Obama implored the crowd [in a speech today] not to lose heart, declaring that the vision of America he laid out in his fiscal speech — one in which ‘we are connected to one another; that I am my brother’s keeper, I am my sister’s keeper’— would animate his campaign and drive the debate in the 2012 election.”
The U.S. may lose its triple-A rating and the best Obama can do is peddle feel-good pop slogans in defense of suicidal entitlements.