RE: [Pen-l] WSWS on Obama budget

["Max B. Sawicky" <sawicky@xxxxxxxxxxx>]

The comrades could get a job writing for the Concord Coalition if that
world socialist revolution thing doesn't work out.  

My notes marked with ***:

http://wsws.org/articles/2009/feb2009/budg-f27.shtml
Obama budget projects record deficits and borrowing
By Patrick Martin
27 February 2009

. . .


The ten-year budget projection, covering the years 2010 to 2019, shows

the annual deficit declining to $533 billion in fiscal 2013-still
larger 
than any previous year before the crash of 2008-and then beginning to 
rise again. By 2019, the US national debt is estimated at $13.8 
trillion, a sum equivalent to the entire US Gross Domestic Product
last 
year.

*** Why compare debt in 2019 to GDP from last year?

The actual trajectory of the federal budget is even more ominous than 
these figures suggest, since the White House estimates assume that the

US economy will essentially stand still in 2009 and 2010, rather than 
declining even further, and that economic growth will resume in 2011
and 
accelerate rapidly. That is an absurdly optimistic projection.

*** Optimistic yes.  Absurd not really.

For all Obama's rhetoric about renewing and reviving the economy, the 
budget figures have a stark meaning: the US government is bankrupt,
the 
US economy moribund. The crash of 2008 marks, not a conjunctural
crisis, 
even of immense magnitude, but a turning point, one that marks the 
long-term decline of American capitalism and the irreversible loss of 
its position of world domination.

*** "Bankrupt"?  Not quite.  Why is everybody rushing to buy U.S.
debt?
Of course you all know the answer.

The details of the budget outline matter far less than this central 
historical fact. In any case, many of these details are so sketchy and

conditional that they serve only to indicate the wishes and hopes of 
White House officials, not any reasonable expectation of the
performance 
of the US economy.

Thus the budget sets aside as much as $250 billion to cover the cost
of 
further bailouts of US financial institutions, although the White
House 
readily admitted that this was only a "placeholder" and there was no
way 
of predicting today how much more will be expended in the effort to 
rescue the bankers and billionaire speculators.

The White House has ended the Bush administration practice of
excluding 
the cost of the wars in Iraq and Afghanistan from the regular budget, 
and financing the wars through so-called emergency spending bills
passed 
separately. Obama hailed this action as truth in budgeting, although
he 
will nonetheless request a supplemental appropriation for the two
wars, 
supposedly the last such effort, totaling $75 billion for the current
year.

*** The supplemental goes into the Bush 2009 budget, not the Obama
budgets.

The ten-year projection nonetheless shows total Pentagon spending
rising 
steadily, despite the assumed end to combat operations in Iraq,
reaching 
the staggering total of $872 billion by 2019. Over the entire ten-year

period, total US military spending is projected at nearly $8 trillion,
a 
sum greater than the entire GDP of any other country on the planet.

Much publicity has been given to claims that the Obama budget allows 
Pentagon spending to rise by only 4 percent in 2010, and thereafter 2 
percent annually, compared to a 7 percent rate of increase for
domestic 
spending. This is largely a statistical fiction, caused by the assumed

decline in spending in Iraq. The baseline Pentagon budget, excluding 
Iraq and Afghanistan, will rise from $557 billion this year to $689 
billion in 2012, a 24 percent increase during Obama's first term in
office.

The bloated military budget is likely to swell to even greater 
proportions. The budget document explicitly declares that the
reduction 
in spending on Iraq and Afghanistan is merely an assumption for the 
purpose of making estimates, and does not reflect any actual policy 
decisions to withdraw or redeploy US troops.

In the course of the Bush administration's "war on terror," total 
Pentagon outlays rose so sharply that they came to exceed the combined

total of all other discretionary government spending (i.e., spending 
that is not already required by law, such as payments under Social 
Security, Medicare, Medicaid and other "entitlement" programs.) The 
Obama administration budget confirms and extends this supremacy of
guns 
over butter: Pentagon spending will exceed all other discretionary 
spending in each of the next ten years, and the discrepancy will grow 
wider year by year.

One feature of the new budget outline much celebrated in the media is 
the set-aside of $634 billion over ten years to cover the cost of an 
as-yet-undetermined health care reform program. While the number might

appear substantial, it is a small compared to a health care system
that 
now costs the American people $2.3 trillion a year-generating huge 
profits for drug, insurance and medical equipment companies, but 
producing worse health outcomes than in any other advanced industrial 
country.

*** The budget explicitly describes the $634b as a downpayment, and
says "However, additional funding will be needed."  No ifs ands or
buts.
(p. 67,
http://www.whitehouse.gov/omb/assets/fy2010_new_era/Department_of_Heal
th_and_Human_Services1.pdf)

The annual average cost of Obama's health care initiative, about $60 
billion a year, is less than 3 percent of annual US spending on
medical 
care. In other words, Obama's policy is a change at the margins, not a

significant reform. Put another way, Obama's health care "reform" 
provides just over $1,000 a year for each uninsured American-a sum 
grossly inadequate to pay for healthcare coverage.

*** See above.

The $634 billion allocated to the administration's most important
social 
policy proposal also compares unfavorably to the amount projected for 
payment of interest on the federal debt, a colossal $4.9 trillion over

the next ten years. In other words, Obama's budget openly states that 
interest payments, which go largely to the wealthy, will cost eight 
times more than his proposed health care reform.

On taxes, the Obama budget makes a significant concession to the 
Republican Party and the super-rich by allowing the Bush tax cuts for 
the wealthy to expire as scheduled at the end of 2010, rather than 
canceling them immediately, as the Democratic candidate had suggested
he 
would do in the course of the presidential election campaign. This
delay 
is worth hundreds of billions of dollars to the wealthiest one or two 
percent of Americans.

*** Right.  Let taxes go up in the middle of a recession.  Smart.

This concession is offset in part by tax increases on the wealthy to 
finance the health care program. . . .


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