Obama gave a speech today laying out his plan to cut $4 trillion from the deficit. First, let's distinguish between the debt and the deficit. The debt is the total amount that the federal government owes. It is currently over $14 trillion. This is not getting cut. The deficit is the yearly amount that is added to the total debt. This year it is projected to be over $1.5 trillion.
When Obama says he plans to reduce the deficit, this means that he plans to reduce the rate at which the national debt is increasing. But it will still be increasing. Imagine if you have $50,000 in credit card debt and you keep adding another $5,000 to this debt each year. Then you say, "I have a plan to reduce my deficit by $2,500. I will cut my deficit in half." The problem is, you will still be adding $2,500 a year to the credit card debt that already exists. You will be doing nothing to pay it down and you will keep spending beyond your means. What kind of a plan is this?
This so-called $4 trillion is over 12 years (long after Obama will be out of office). That is just over $300 million a year when deficits are projected to be over $1 trillion per year. Seriously, this has to be some kind of a joke. So Obama's plan consists of continuing to add over $700 million to the national debt every single year and we are supposed to cheer this?
It gets even worse when you look at the details that we have so far. Of the $4 trillion in so-called cuts (which they really aren't), one trillion is coming from tax increases. This alone is a farce because higher tax rates don't necessarily mean the government will collect more money. Another one trillion will supposedly come from lower interest payments on the national debt. I didn't know that Obama had the ability to predict lower interest rates in the future. He should really get into trading futures if he is that brilliant.
The remaining 2 trillion will be from reductions in spending. This really means reductions in what is projected for the future. No real spending cuts will actually take place. Even part of this consists of $480 billion that will be "saved" from Medicare and Medicaid. But I thought that was already part of Obama's healthcare plan. If saving money from Medicare is that easy without affecting healthcare, why don't they do it now? You're telling me that the government was just going to throw away $480 billion that wasn't really helping anyone important with healthcare expenses?
This guy is a real joke. He must think that the American people are really stupid. Let's see if he is right. I hope the majority of people see right through this garbage. This just tells you how out of control the politicians are in Washington DC. The national debt will only stop growing when the Fed refuses to buy any more government debt or the people stop electing these clowns.
Tomorrow I will discuss the phony plan laid out by Paul Ryan.