Obama “tightens” the nation’s belt by 0.5%

Touting his cuts as a substantial reduction in spending, President Obama has no serious credibility when it comes to fiscal responsibility.

by Michael Naragon

“In Washington, I guess that’s considered trivial,” said the president of his $17 billion in budget cuts on Thursday.  “Outside of Washington, that’s still considered a lot of money.”

If the American people needed to see the problems of our federal government in microcosm, Obama’s statement would be a great object lesson.  Only in Washington, D.C., would $17 billion dollars be considered a pittance.  Sadly, the federal government is spending such an unprecedented amount of taxpayer money that $17 billion is virtually nothing.

“It is important, though,” Obama told the reporters listening to his statement, “for all of you as you’re writing up these stories to recognize that $17 billion taken out of our discretionary non-defense budget, as well as portions of our defense budget, are significant — they mean something.”

Try as he might to make his spending cuts sound meaningful, the president will have a difficult time convincing a large segment of the voting public that he has done anything truly “significant.”

“All across this country, Americans are responding to difficult economic times,” Obama said, “by tightening their belts and making tough decisions about where they need to spend and where they need to save.”

And what tough decisions have been made by the Obama administration?  As it stands, the president’s budget totals nearly $3.4 trillion dollars, making the $17 billion in cuts only about half of a percent.  Using the president’s own analogy of belt tightening, if Obama had his size-33 pants taken in 0.5%, he would have a pair of pants with a waist of 32.835 inches.  Not exactly something that would be cheered on The Biggest Loser.

So while the president and his emissaries encourage the American people to cut back, the federal government’s only cutbacks come after they have spent enough to add around $1.75 trillion to the federal debt in 2010.  Compared to an annual GDP of around $13.8 trillion, Obama’s budget of $3.4 trillion is about 25% of that figure.  Obama’s projected deficit of $1.75 trillion next year represents about 12.7% of GDP, a ratio of deficit to GDP higher than countries such as Hungary and Pakistan that have received economic aid from the International Monetary Fund.

If a family with an income of $50,000 ran its finances like the federal government, that family would be adding another $6,350 in debt in 2010 to their existing debt of $40,580.  The budget cuts?  $61.

Unmentioned by Obama or OMB Director Peter Orszag, most of the money saved in the “cuts” is being immediately redirected to other portions of the Obama budget, making the net savings virtually zero.  Predictably, most of the programs cut by the president were defense-oriented.

This is not to say that I oppose budget cuts.  I believe several of the cuts made by the administration were legitimate and necessary.  But when the president has spent more in his first 100 days than George W. Bush spent in eight years, he should not expect, nor receive, any credit for fiscal responsibility.

The massive amount of debt being accumulated by the government can only lead to a dire outcome.  Dollars are being printed and injected into the system as quickly as the presses can churn them out, and the nations of the world, including our enemies, are being asked to assume more and more of our debt.  The only logical results from such irresponsible behavior are eventual tax hikes, business slowdowns, and heavy inflation.

One wonders if the president is tightening our belt, or our noose?