When speaking of the new 2009 budget submitted by the Whitehouse, claims seem to be wildly overstated.
When taking office, the Obama Administration inherited a $1.3 trillion yearly deficit. That includes the costs of the wars.
The new budget submitted by the Obama Administration extends that to $1.8 trillion. That means the changes and additions to the budget come to “only” $500 billion, or .5 trillion more that what was inherited. Not bad, considering the first round of TARP funds sought and approved by the Bush Administration was $700 billion, alone.
Hidden budgetary costs are now on the table:
When balancing your personal budget, it’s best to know all of your costs, including, for example, the $30 monthly you spend on your Lattes. If you don’t know that $30 number, how can you reduce it? The answer is to account for, and measure that cost. Our lawmakers have a hard time reducing costs that are “unknown”, including the “emergency” or “supplemental” spending bills for the war in Iraq, which were left out of the budget by the previous administration. Since these costs were announced on an as-needed basis, lawmakers had no benchmark for controlling the costs, much less creating facilities to manage the spending. This budget brings those estimated costs to the table.
Healthcare:
Current Taxpayer-Absorbed Costs: When individuals visit the emergency room because they cannot find healthcare (and cannot pay for it), we, the taxpayers absorb those costs. This budget finally addresses, to a minimal extent, the problems associated with emergency-room-costs, versus those of a less-expensive family-practitioner. By insuring more people, fewer have to resort to emergency room visits due to doctors refusing treatment for payment reasons.
Making our Exports More Competitive: One of the major inhibitors to U.S. competitiveness is the cost of healthcare. In most developed countries, personal healthcare is subsidized and managed by the government, whereas companies in the U.S. must bear this cost. Healthcare subsidy is a direct method for countries to lower their production costs and make their products cheaper for export. Healthcare subsidy is therefore a competitive advantage foreign companies have against companies in the United States. Take the General Motors / United Auto Workers negotiations as an example. One of the major components of their talks includes healthcare costs. You simply don’t see these discussions in Japan, China, Canada and most of Europe, because the government handles this. The fact is, workers are cheaper in those countries partially becuase companies can hire workers at a lower cost, directly due to the fact that government handles healthcare. Direct industry subsidies our competitors are taking advantage of? You bet.
Fossil Fuels and Jobs:
Energy Imports: We are currently “outsourcing jobs” directly to the oil exporters through our purchases of oil. For every imported barrel of crude, someone is taking money out of the United States, and trading it into another country. The net effect is that we are trading dollars in the short term for debt, interest. In the process of financing that transaction, we are also giving up on future innovation. Almost like continuing to purchase bottled water at $60 monthly, when you could buy the filter by laying out the $60 in a single transaction. Harder to bear, but far more effective. Bearing this up-front cost of energy, will not only create jobs, but make the cost of creating energy in the U.S. a net-zero export of cash. This budget begins to address this long-term investment.
Taxes:
1993 Levels: We will see increases in taxes. One reason is that we have to pay interest on the loans we, the United States, have taken out from our competitors to purchase imported products and live beyond our means. We have debt, and we have to pay interest on it. We have a recession, and those “socialist” programs we already have in place, like unemployment insurance, Medicare, Social Security have to be funded. In a “socialist” fashion, these costs go up when economies are down.
Summary:
Obviously, it’s only possible to comment on few elements of this massive budget. Fundamentally, when economies do poorly, governmental spending increases, revenue decreases, and you see dips in available cash, thereby triggering a borrowing process. Under the current circumstances, this governmental “spend-more, tax-more, get-less” event was inevitable. Finally, we are beginning to see a picture of upcoming governmental costs, which will provide better tools for our lawmakers to see the longer-term picture, instead of the “hey Dad, can I borrow another $20″ question coming up every time we didn’t think forward to next week.
Maybe we’re now moving towards a position so “see all the facts” so they can be properly evaluated.
Posted under Energy, Healthcare, Keeping Informed, Stimulus, Taxes
This post was written by PoliticsRX on April 1, 2009
