President Obama's Legacy: $20 Trillion in Deficits for 2016 Victor

Forbes ^ | 12/26/2012 | Paul Roderick Gregory

[SeekAndFind]

The fiscal-cliff negotiations have deteriorated into an embarrassing travesty of competing press conferences, off-the-record remarks, closed meetings, and sound bites. The Republican side is frustrated and flabbergasted by the absence of a concrete proposal from the President that can be scored by the Congressional Budget Office and then “marked up” by Congress according to standard procedures. Vague offers of so and so many trillions of revenue increases and spending cuts spread over a decade are just words, not real proposals.

The last serious fiscal-cliff projections date back to the Congressional Budget Office’s (CBO) August 2012 assessment of the budgetary effects of various fiscal policy alternatives. In its August study, the CBO – the “gold standard” of budget projections — calculated the budgetary consequences of going over the fiscal cliff in its “baseline projection.” It then projected the budgetary effects of alternative fiscal policies, among them, extending the Bush tax cuts and shelving the sequestered spending cuts.

We may agree or disagree with the CBO’s projections, but they are the most authoritative we have. President Obama has been vocal with respect to the fiscal policies he wants, and each item on his wish list can be scored using the CBO’s August study. Therefore, we can approximate the five-year deficits that would result if President Obama gets what he wants. This is not rocket science. Anyone can do this using the CBO’s excel files.

The CBO’s bottom line: If we go over the fiscal cliff, the second Obama administration will accumulate $1.5 trillion in deficits for 2013-2017 ($300 billion per year), for a “modest” deficit of less than two percent of GDP. If Obama gets his full wish list and avoids the fiscal cliff, the CBO’s alternate fiscal policy projections yield a cumulated 2013-2017 budget deficit of $4.5 trillion.

[wayoverontheright]

Our candidate should run on a plan that includes selling off a portion of federally-owned lands that happen to contain resources, to domestic private entities. This could put a significant dent in the budget deficit. Feds own one-third of lower-48 land mass, and a higher portion of Alaska and Hawaii.

The enviros will oppose, but a plurality of Americans want to drill for our own resources, and a plurality, according to polls, consider the budget deficit to be at the top of their concerns.