President Obama told us that he doesn’t understand math beyond the 7th grade level. Nobody was listening, obviously. Now here we are again, waiting for the politicians in Washington, DC to do something about the approaching fiscal cliff. Obama says he wants a “balanced approach” which means raising taxes. He doesn’t have much to say about cutting spending, or mention that under the tax rates enacted by George W. Bush tax revenues have increased a little bit despite the miserable economy. The CBO reported this in its final budget totals for 2012, and if not for The Wall Street Journal we may not have known about it.
The feds rolled up another $1.1 trillion deficit for the year that ended September 30, which was the biggest deficit since World War II, except for each of the previous three years. President Obama can now proudly claim the four largest deficits in modern history. As a share of GDP, the deficit fell to 7% last year, which was still above any single year of the Reagan Presidency, or any other year since Truman worked in the Oval Office.
Tax revenue kept climbing, up 6.4% for the year overall, and at $2.45 trillion it is now close to the historic high it reached in fiscal 2007 before the recession hit. Mr. Obama won’t want you to know this, but this revenue increase is occurring under the Bush tax rates that he so desperately wants to raise in the name of getting what he says is merely “a little more in taxes.” Individual income tax payments are now up $233 billion over the last two years, or 26%.
This healthy revenue increase comes despite measly economic growth of between 1% and 2%. Imagine the gusher of revenue the feds could get if government got out of the way and let the economy grow faster.
Now let’s look at outlays, which declined a bit in 2012. That small miracle was achieved thanks to a 4% fall in defense spending, a 24% fall in jobless benefits, and an 8.9% decline in Medicaid spending.
Note, however, that federal spending remains at a new plateau of about $3.54 trillion, or some $800 billion more than the last pre-recession year of 2007. (Read More)
Read that last line again. Federal spending is the same amount higher than it was in 2007 as the stimulus package the Demcrats and Obama rammed through in the first two years of his presidency. Now that higher number is part of every budget going forward, and they wonder why the deficits are so high. The spending was supposed to be temporary but they’ve made it permanent, and any talk of cutting back to 2007 levels is met with screams about fairness and economic doom.
The Bush tax rates isn’t what caused the economic meltdown. It was caused by the mortgaged backed Ponzi scheme the Democrats cooked up decades ago and refused to do anything about. They had plenty of warning and blocked any attempts at reform.
Now the only solution they’re coming up with is taxing the rich at higher rates. Forget the fact that there aren’t enough rich people to even put a dent in the deficit. That doesn’t matter because the higher rates will most likely lead to decreased revenue and the deficit will actually increase. But you won’t hear any of this from the left wing media or the Democrats that they so vehemently support. It isn’t part of the “punish the rich” narrative. Forget the post-racial presidency, this is the post-math presidency.