Never Let a Crisis Go to Waste...

The Obama budget came out. I'll briefly note that any budget that needs to increase government spending as a share of revenues to the unprecedented (seriously - other than the middle of massive wars - Civil War, WW2, and I think one other - WW1 or Korea or Vietnam, we've never spent this much as a share of GDP) levels this budget does is an indication that the liberals are going buck-wild.

 

This budget, btw, is for 2011, and the projections are for 2012, 2013, etc. Can anyone come up with a good reason why the 2011-13 budgets should be HIGHER than the budget for 2010 and 2009, which was the actual recession at a point where everyone already understood how bad it was? (I understand why 2008 was low - the budgeting for 2008 happened before we really knew how bad it was going to be). I understand the need for some of the individual policies they're pursuing, but a lot of it is straight wasteful, and even for the rest, the aggregate is more than the sum of the parts, because monetary and fiscal outcomes are exponentially related to the size of the policies...

 

The other point I'd make is this - why on earth does it make sense to raise taxes in order to spend more, given that the government is almost certainly 5% less efficient (the absolute maximum of the savings rate) than the private sector in its spending? Tax-to-spend is a recipe for economic decline, not improvement.

 

I've written a lot about the fiscal situation, and the problems associated with mass taxation. This is an example of why I've been so disappointed in the Obama presidency and the Liberal Congress. He's such a good speaker and seems so intellectual that for him to seek and enact the policies he has is tragic, and the Republicans weren't the best stewards of Congress, but the Democrats have been much, much worse.