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  • The biggest leftwing budget in history

    by Sunny
    27th February, 2009 at 5:42 am    

    Obama’s spending plans in the United States have got leftwingers in the United States creaming their pants. And quite rightly too:

    Mr. Obama would overhaul health care, begin to arrest global warming, expand the federal role in education and shift more costs to some corporations and the wealthiest taxpayers.

    Mr. Obama would slash about $5 billion in the coming year for direct payments to agribusinesses and farmers with more than $500,000 in annual revenue, and $4 billion in annual subsidies to private banks that make college loans. Instead he would increase spending for government Pell Grants to needy students, and for the first time index the maximum yearly grant for inflation.

    Departing from the free market orthodoxy of his predecessor, George W. Bush, Mr. Obama would use the government’s powers of spending and taxation to push the private market in new directions. With higher taxes on the wealthy and savings squeezed from health care providers, drugmakers and insurers, Mr. Obama would create a $634 billion, 10-year “health reform reserve” as a down payment to finance disease prevention, wellness programs and research on cost-effective treatments ultimately to cut health care costs. More than any other expense, health care is driving future projections of unsustainable deficits. The health reserve would also be used to create affordable insurance programs for individuals and employers.

    I know right-wingers will be spitting blood, but obviously I love it. I helped elect this man - that feels good.

                  Post to

    Filed in: Economy,South Asia,United States

    13 Comments below   |  

    Reactions: Twitter, blogs

    1. LS — on 27th February, 2009 at 6:03 am  

      “Mr. Obama would overhaul health care, begin to arrest global warming, expand the federal role in education”

      I think you mean “would spend a lot of money to no visible effect”, especially in the second case…

    2. Rumbold — on 27th February, 2009 at 9:31 am  

      Because massive spending increases and budget defecits worked so well in the UK and USA in the previous ten years. Oh wait…

    3. cjcjc — on 27th February, 2009 at 9:33 am  

      If he can take the US towards the French - NOT the British (but he’s not that dumb) - healthcare model then that will be a great achievement. I’m not sure of the details of his plan - but then I doubt if he is either!

      As for the rest, well, time will tell.
      I’m not spitting blood but I’m not optimistic.

    4. Gridlock — on 27th February, 2009 at 10:25 am  

      How does the continued killing of innocents in Afghanistan, Iraq, Pakistan, Somalia, South America and various other warzones factor into your self-appreciation?

      An evil hegemony is still an evil hegemony, whether it subsidises agriculture or not.

    5. platinum786 — on 27th February, 2009 at 10:26 am  

      I heard a speech he did a while back where he announced all this. The man is the best thing to happen to America in a long time. Lets hope he can match it on the international stage.

    6. Riz Din — on 27th February, 2009 at 10:34 am  

      Any spitting of blood is related to previously contracted diseases, but I do have many worries about this fiscal blow-out…not just the biggest budget in left-wing history but I imagine the biggest in all history.

      My main concern is with the reliance on forecasts for things to eventually turn out rosy but we know our ability to forecast the future is extremely poor. Unless this programme, through some fluke of luck, is just right like Goldilocks third bowl of porridge, then the fiscal deterioration for the US could be extremely severe over the next decade. Or, on the other hand, if we consider that a lot of this spending doesn’t come on-line immediately, there is even the risk that if the economy gets started again, we could overheat - unlike monetary policy I can’t see the gvt stopping building projects half-way through.

      I’m 100% for Obama vs Bush and the GOP, and I think Obama has an appreciation for the free mkt, but this budget simply puts too much power in the hands of the few, some of who will be scarily incompetent.

    7. shariq — on 27th February, 2009 at 11:07 am  

      A couple of points. Establishing a working health care system will save money in the long run. If America doesn’t do something about it now, it will have to pay for it later.

      Similar with global warming. You need to spend money and implement some sort of cap and trade. One of these myths is that China has no interest in climate change. It does, but it needs to see America working on it as well.

      He’s also taking steps to close the loopholes enjoyed by private equity and hedge fund managers. Will Gordon follow suit or can Britain not afford to?

    8. Shamit — on 27th February, 2009 at 12:38 pm  

      I like the emphasis the OMB has put on health care as well as climate change as well as infrastructure and delivery of middle income tax cuts. But how is this all going to be paid for?

      The focus on the infrastructure which would immediately create jobs and improve conditions in schools are definitely very important and do have immediate beneficial impact in jumpstarting the economy.

      But everything else is a big wish list without any definitive answers.

      In the US, top 5% of the Country pays 60% of the tax and top 1% pays around 40%. This would go up about 5-10% percentage points. So taxing them more would result in what? I dont think there would be much Cap Gains this or next fiscal year and the cap gains taxation would go up which would make investors (and most americans used to invest in the stock market) more wary about investing in equities market. At the end of the day, Government cannot create wealth and they never did. I can understand the argument about people like Buffet, Gates whose primary income is from Cap Gains but over 70% of US population invests in stock market.

      Currently, there is a crisis of confidence — does the stimulus bill and this massive budget spending bill address the key question of restoring faith and confidence in the system?

      I dont know and niether do I know how the money is going to be allocated to states. Also, there is a congressional election in 2010 and I wonder what happens to Obama’s goals if the Democrats lose majority in the US Congress especially the House.

      So, the budget like Obama’s campaign has a lot of good ideas and lofty goals but the test would in delivery?

      I hope President Obama succeeds not only for the US but his failure would mean a longer economic depression (yeah I use the D word — because in recession policy tools work) for the entire world.

      So lets hope for the best

    9. Sunny — on 27th February, 2009 at 1:23 pm  

      Because massive spending increases and budget defecits worked so well in the UK and USA in the previous ten years. Oh wait…

      Where’s the evidence it doesn’t?

    10. Leon — on 27th February, 2009 at 5:02 pm  

      I helped elect this man - that feels good.


      Thank you, Sunny, for giving us the world’s first African-American president.


    11. Rumbold — on 27th February, 2009 at 11:43 pm  


      “Where’s the evidence it doesn’t?”

      I am not going to dignify that with a response.

    12. shariq — on 27th February, 2009 at 11:51 pm  

      Rumbold, surely you can see that there’s a difference between deficits on more tax cuts for the rich and spending on foreign wars and spending which expands health care and makes progress on reducing emissions.

      Shamit, I share your concerns. However the Democrats will probably lose seats in 2010 no matter what as the economy wouldn’t have recovered by then. If Obama was going to get anything done on health care and to a less extent climate change he had to go for it now when his popularity is at its peak.

      Also, one of the reasons he’s been elected is to implement some of the policies he talked about on the campaign trail.

      Finally, you have to be happy that he’s reducing subsidies to agribusiness right. I think thats a very positive step for the future if he can get it passed.

    13. chairwoman — on 28th February, 2009 at 3:23 pm  

      “I helped elect this man - that feels good.”

      Without your help……

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