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Nums: U.S. Federal Spending & Deficits under Clinton, Bush & Obama

July 26, 2011

If you missed yesterday’s post “How’d we get into this fix?”, check it out now.

Apparently, Pres. Obama missed it.

How do I know?

Simple: his historical recollections in last night’s speech didn’t seem to match the numbers.

Somebody forwarded him the link, ok?

* * * * *

Following up on yesterday’s post, some HF readers asked for a summary table.

So, here it is …  click below for a PDF version

Conclusions stay the same as yesterday …

Bush overspent Cinton by about $1 Trillion annually and Obama makes him look like a tightwad.

Obama is spending $1 Trillion per year more than Bush and $2 Trillion per year more than Clinton.

Still, Obama wants taxpayers to bail him out.  Don’t constrain him with spending restraints …

What planet ?

click chart to enlarge or click below to download a PDF version

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click to download PDF

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Posted in Budget - Deficit, Bush, Obama | Leave a Comment »

“Intransigence” or “Consequences”

July 26, 2011

In Spring 2009, President Obama bluntly, repeatedly, and publically chided Congress and the American people that “elections have consequences”.

Then, bolstered by a filibuster-proof majority in the Senate, he – with sidekicks Reid & Pelosi – rammed through ObamaCare with no GOP votes.  No compromise, except to sway Dem votes (think Cornhusker kick-back, Louisiana Purchase, Florida Medicare Advantage, union waivers, etc).

Yep, elections have consequences.

Last November, voters took the President’s words to heart and elected a majority GOP Congress – largely driven by angry tax payers who didn’t want to pay for Obama’s spending binge.

Now, the Congress refuses to jack up taxes … or, in Obama-speak, to increase revenues.

The President and Sen. Reid say the GOP Congress is being “intransigent”.

Hmmm.

I thought elections were supposed to have consequences …

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Posted in Debt - Deficit, Obama | 1 Comment »

How’d we get in this fix? … Here are the nums re: the Fed’s spending binges.

July 25, 2011

Obama’s stump riff is that we’re in this debt-deficit mess because of 2 unfunded wars, an unfunded prescription drug plan, and the unfunded Bush tax cuts.

Oh, really?

Let’s look at the nums … starting with Bush’s last year – 2008.

A couple of takeaways:

  • No surprise, the big 3 – defense,  Medicare and Social Security – are roughly equal in magnitude and account for about 70% of gov’t spending
  • Bush handed off to Obama a deficit of roughly $500 Billion and a $10 Trillion national debt.
  • IMPORTANT: ‘Baked in’ to those numbers are Obama’s talking points: the wars, the Rx plan, and the tax cuts … more on that later.

That’s the static view.

For context, let’s look at Bush’s spending (in his last year) versus Clinton’s spending in his last year (2000):

                                            click to enlarge

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A couple of more takeways:

  • Bush increased spending over $1 Trillion (2000 to 2008)
    …OUCH!
  • Almost 1/3 of the increase was in defense spending … 2 wars will do that to you … especially when compared to Clinton’s skinnied down military (remember the “peace dividend” that Reagan handed Clinton?)
  • Over 1/4 of the increase was attributable to higher healthcare costs … a prescription drug plan and a touch of inflation will do that to you
  • Note: about $200 Billion of the increase is attributable to Welfare (think refundable tax credits) and Education (think NCLB)
  • Interesting (to me): The national debt grew by about $4.5 Trillion from 2000 to 2008 … to about $10 Trillion …  during the same period, tax receipts (“revenue” in Obama-speak) increased by about $500 Billion (according to the Tax Policy Center)
  • Conclusion: The increase in the debt / deficit during the Bush years was more than fully explained by the oversized spending … though marginal tax rates went down, tax receipts increased, offsetting some of the higher spending.

Now, keep in mind, that Obama inherited a national debt of about $10 Trillion and an annual deficit of under $500 Billion.

Also, keep in mind that the spending on the 2 wars and the Rx drug plan were baked into Bush’s final year’s numbers.

OK, now let’s look at the Obama years.

                                       click to enlarge

image

Well, well, well.

Total spending for the current year is projected to be almost $1 Trillion over spending in Bush’s last year … and, about $2 Trillion over Clinton’s last year.

Gawd, how can that be?

  • Again, keep in mind that the spending on the 2 wars and the Rx drug plan were baked into Bush’s final year’s numbers.
  • Still, defense spending increased by 28% (over 2008) … I guess doubling down on Afghanistan, initializing “kinetic activities” in Libya, and tripling the number of drone missile attacks will do that to you.
  • Healthcare is up over 25% … to be fair, there’s inflation in there, but there’s also the massive bureaucracy being built to run Obamacare…
  • Welfare is up over 25% in 2 years … think food stamps (and more food stamps)

So, there’s a roughly $5.5 Trillion projected increase in the national debt in Obama’s first 3 years …. or, $4.5 Trillion if you still believe that the Stimulus was a necessary and extraordinary budget item.

Double OUCH !

During the period 2008 to 2011, tax policy (i.e. rates, brackets and deductions) stayed essentially constant – remember that the Bush tax cuts were extended last December.

But, tax receipts went down from $2.524 Trillion in 2008 to $2.162 Trillion projected in 2011.  I guess a “making work pay” program, a  payroll tax holiday, and 9% unemployment will do that to you.

* * * * *

Bottom line: Readers know that I stay pretty close to this stuff.

Still, the numbers are mind-numbing … even to me.

Bush added a Trillion to the deficit over 8 years.  Obama did it in 3.

Bush added about $5 Trillion to the debt in 8 years.  Obama did it in 3.

Bush disappointed when it came to fiscal management.

But, Obama has literally spent us into a potential default.

He thinks the problem is accelerated depreciation on corporate jets and too little tax paid by the rich.

And, he doesn’t seem to understand – despite the Nov. elections –that tax  payers don’t want to pay for his spending binges.

I’m not very optimistic …

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Posted in Bush, Debt - Deficit, Obama | 3 Comments »

“Don’t call my bluff” … say, what?

July 14, 2011

It’s reported that Pres. Obama huffed “Don’t call my bluff, Eric” to Congressman Cantor before walking out of the debt negotiations.

Huh? Freudian slip?

Did he mean; “I’m not bluffing, Eric”?

Or, was he telling Cantor that he was, in fact, bluffing … and didn’t want to be called on it ?

Cue the teleprompter.

I’m confused.

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A mockery of longstanding bankruptcy law …

July 11, 2011

When the history is written on Pres. Obama’s strained relationship with American business leaders, I think that the GM non-bankruptcy bankruptcy will be tagged as the the first critical shot fired (by the President).

Just in case you forgot, here’s a recap excerpted from Reason:

Many experts suspect that  GM could have obtained private bankruptcy financing if it had presented a credible restructuring plan addressing the cause of its malaise: the uncompetitive costs of its unionized work force.

If it couldn’t, then the government could have offered guarantees to private lenders for the amounts they loaned, which likely would have been smaller than the bailout.

But the administration took matters in its own hands, using taxpayer dollars to commandeer the bankruptcy process to protect key constituencies, while giving short shrift to others.

  • It gave Chrysler’s secured creditors, who would have had priority in a normal bankruptcy, 29 cents on the dollar.
  • Chrysler’s unions, on the other hand, got more than 40 cents, even though they are equivalent to low-priority lenders.

This made a mockery of longstanding bankruptcy law, something that will make credit markets wary of lending to political sacred cows in the future.

I think CEOs could have lived with Obama firing Richard Waggoner as CEO … and then firing his replacement, Fritz Henderson … and then firing his replacement, Ed Whitacre.

But, ignoring the rule of law and subordinating secured creditors to one of Obama’s core constituencies — overpaid union hacks – was over the top.

If there were any hopes of turning around the relationship, the Administration’s moves to keep Boeing from operating a plant in right-to-work South Carolina dashed them

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Posted in Anti-business, Autos - Travel, Obama | 1 Comment »

More re: Corp Jets … new nums and a touch of irony

July 5, 2011

Last week, we analyzed Pres Obama’s new target: corporate jet owners.

We said that the “loophole” was that corporate jets get depreciated over 5 years, whereas commercial aircraft (like Southwest’s) get depreciated over 7 years. So, the “loophole” is 2 years of accelerated depreciation … which is monetarily equivalent to about a 1% discount on the purchase price of of the jet. See the original post for the analysis.

But. a loyal HomaFiles reader quickly corrected my tax facts.

Turns out that in December, HR 4853 — the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 – was passed.

HR4853 allows businesses 100 percent accelerated depreciation of investments in capital assets — including new aircraft — through December 31, 2011, retroactive to September 4, 2010.

That changes the numbers …

The difference between depreciating a jet 100% in the first year and depreciating it over 7 years is monetarily equivalent to about a 3.3% discount on the purchase price of of the jet.

Example (table below): Assuming a million dollar capital expenditure, the NPV of the tax benefit of 100% accelerated depreciation is about $250,000 (@ an average corporate  tax rate of 25%) …  the NPV of the tax benefit depreciating the capital asset over 7 years is $214,489 … the difference is $33,011, which is 3.3% of the purchase price.

* * * * *

Here’s the irony …

HR 4853–  the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 – was initiated in the lame duck Pelosi-controlled Democratic House, passed by the Reid-controlled Democratic lame duck Senate, and signed by President Obama – ostensibly to create J-O-B-S.

Six months later, the President turns around and starts attacking a tax law that he and fellow Democrats enacted.

Then, they wonder why corporate America is sitting on $2 trillion in cash.

It goes beyond corporate jets.

They can’t keep changing the rules every couple of months just to score some cheap political points.

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Posted in Obama, Taxes | 1 Comment »

First, tanning salons … now, corporate jets … here are some nums.

July 1, 2011

Talk about playing small ball …

In Wednesday’s press conference, Pres. Obama turned the spotlight on the “tax loophole for corporate jets”.  He mentioned them 6 times in the press conference.

Must be a big deal, right?

Wrong.

I’m not a big fan of corporate jets, but that’s beside the point.

I’m more intrigued by the numbers … and so far, I haven’t heard any pundits nail them.

First, what’s the “loophole”?

Well, corporate jets get depreciated over 5 years; commercial aircraft (like Southwest’s) get depreciated over 7 years.

The “loophole” is 2 years of accelerated depreciation.

Nobody seems to be disputing that corporate aircraft are deductible as a business expense.

The only question is whether the cost gets booked over 5 years or 7 years.

What’s the difference?

Well, let’s assume – for round numbers —  that a jet costs $1 million.

If it’s a business jet, the company can deduct $200,000 for 5 years ($1 million divided by 5).; if it’s a commercial jet, the airline can deduct $142,857 for 7 years ($1 million divided by 7).

Note that the aggregate nominal deduction doesn’t  change — it is $1 million in both cases.  Just the depreciation period is different.

So, to figure the impact of the different depreciation periods, let’s calculate  the NPV of the 2 depreciation streams  (see table below) …

  • A 5 year stream of $200,000 per year – discounted by 5% per year – has a $909,190 NPV.
  • A 7 year stream of $142,857 per year – discounted by 5% per year – has a $867,956 NPV.
  • The difference is in NPVs is $41,234.

But, $41,234 is the NPV of the tax deduction … not the NPV of the incremental taxes that the gov’t collects.

Assuming a 25% average corporate  tax rate, the deduction has a tax NPV of about $10,000  ($41,234 times 25%) … about 1% of the plane’s purchase price.

Said differently, this Obama game-changer is equivalent to putting a 1% excise tax on new corporate jets.

That’s how Obama’s is going to attack the deficit ???  That’s his big idea ???

Geez.

Only upside I see is that one of Warren Buffett’s dreams will come true since NetJets —  his corporate jet leasing company — will take a direct hit.

Maybe Buffett will stop whining about his taxes being too low.

Maybe.

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Posted in Obama, Taxes | 3 Comments »

Time Mag editor (a reliable O-shill) calls the President a (blank) on MSNBC …

June 30, 2011

Mark Halperin – editor=at=large of thinly read, left-leaning Time magaine said on live TV that President Obama acted like a (blank) during his press conference yesterday.

Watch the clip to fill in the blank … worth watching.

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http://www.politico.com/news/stories/0611/58098.html

Posted in Laughs, Obama | Leave a Comment »

About the 20 to 1 troop ratio in Afghanistan …

June 27, 2011

Here’s a blog reply that I didn’t want to go unnoticed.

Last week – as an add-on to my remarks on Obama’s Afghan speech, I paraphrased Wolf Blitzer on CNN:

“The U.S. has 100,000 troops in Afghanistan, NATO has about 50,000, and there are supposed to be 300,000 in the Afghan security forces. It’s estimated that there are fewer than 25,000 Talban and Al–Qaeda fighters in the country. With a manpower advantage of almost 20 to 1, shouldn’t we be able to snuff these maggots out?”

A HomaFiles reader provided a very informative answer to the question:

Commenting as an ex-Army officer, you have to be careful with Blitzer’s glib analysis.

First, not all the NATO troops are warfighters – only a small portion are combat effective. The rest are “support” or allied nations providing non-combatants. The tooth-to-tail ratio in modern armies is a lot lower than one might think.

Second, 25,000 enemy fighters is just a “tooth” number- it doesn’t count the undoubtedly numerous locals and Pakistani nationals who provide supply, succor, intelligence, etc. If you want to do a true apples-to-apples comparison of effective numbers, you need to include the “on-demand” support. It is part of fighting an insurgency. The farmer hiding guns or providing water is as an important combat asset as an Army quartermaster.

Third, Blitzer can throw around any overall ratio you want- but in an insurgent fight, a tactical combat, numbers ONLY matter in that specific kill zone. NATO may control the air, communications and supply- but insurgents hold the initiative as to when to give battle. And a shrewd insurgent only gives battle at singular points where he can control the various tactical support ratios. Like crime, insurgency is a tactical problem; war is a strategic one.

There are many more police in Manhattan per violent criminal on any given night. The police have better guns, communication and supplies. But the criminal determines the engagement.

The criminal  finds the place where the police are not. That is why you need more police per active criminal- to achieve parity, provide deterrence, and provide superior back-up forces in case of trouble.

Thanks for the informative reply … very compelling case.

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Posted in Obama | Leave a Comment »

Blah-blah-blah …

June 23, 2011

Obama’s speech last night was well-crafted with tight logic and clever metaphors.

But, Dennis Miller summed it up best: “more smoke than the Vatican announcing a new pope.”

I was afraid it was just me thinking that  Obama’s speeches have taken on a certain ‘tree falling in the woods’  character.

Like, who cares?

It’s not like anything is going to change.

The Middle East will continue to be a mess, we’ll continue to throw lives and money down the rat hole, and Al–Qaeda will just keep operating out of Pakistan, Yemen and other places.

Only difference: by declaring the withdrawal, Obama owns anything that goes wrong in Afghanistan.

Tell me again why anybody wants to be President ?

* * * * *

Interesting observation …

Paraphrasing Wolf Blitzer on CNN:

“The U.S. has 100,000 troops in Afghanistan, NATO has about 50,000, and there are supposed to be 300,000 in the Afghan security forces.  It’s estimated that there are fewer than 25,000 Talban and Al–Qaeda fighters in the country.  With a manpower advantage of almost 20 to 1, shouldn’t we be able to snuff these maggots out?”

Good question, Wolf …

* * * * *

Posted in Obama | 1 Comment »

What do men, low earners, suburbanites and Republicans have in common?

June 10, 2011

A majority of them disapprove of the job President Obama is doing.

Based on the most recent CNN-Opinion Research Poll, 48% approve of Obama’s job performance.

Some interesting numbers from the ‘internals’:

  • 51% of women approve, 51% of men disapprove
  • 61% of non-whites approve, 63% of whites disapprove
  • 52% of folks making more than $50K approve, 50% making less than $50k disapprove
  • 82% of Democrats approve, 83% of Republicans disapprove
  • 57% of urbanitess approve, 52% of suburbanitess and rurals disapprove

In marketing, it’s called segmented appeal.

Draw your own conclusions …

Posted in Obama, Polls & Surveys | Leave a Comment »

O’s under water … again

June 8, 2011

According to that bastion of right-wing thinking – the Washington Post – President Obama’s Bin Laden bounce is gone, his approval  is ‘upside down’, and 6 of 10 people think things are on the wrong track  …

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Posted in Obama, Polls & Surveys | Leave a Comment »

Another Obama economist bites the dust …

June 7, 2011

According to Politico …

Austan Goolsbee, chairman of the White House Council of Economic Advisers – and one of the crafters of the administration’s  Trillion Dollar-Stimulus plan — plans to resign this summer and return to teaching economics at the University of Chicago.

This past weekend, Goolsbee was pitching the administration’s  “bump in the road” response to May’s dismal jobs report. 

Sommers, gone.

Romer, gone

Bernstein, gone.

Goolsbee, gone.

Obama says: His economic program saved us from catastrophe. and is working just fine, thank you.

Yeah, right.

Posted in Debt - Deficit, Obama | Leave a Comment »

Obama confronted with a McDonald’s Dilemma

June 6, 2011

Two of Friday’s press reports put Pres. Obama on the horns of a dilemma.

On one hand, First Lady Obama was visible stumping for “My Plate” … the iconic replacement for the “Food Pyramid” ….  part of her program to put a dent in childhood obesity and get kids eating healthier.

Obviously, there’s no room for McDonald’s on the First Lady’s plate.

On the other hand, a measly 54,000 jobs were created in May … and, it turns out that half of the jobs came from a single employer — McDonald’s. 
          
McDonald’s ran a big hiring day on April 19 — after the Labor Department’s April survey for the payrolls report was conducted.  Reportedly, McDonald’s swelled its workforce by more than 30,000 … more than half of May’s total gain.

So, while Michelle is trying to shut McDonald’s down, Barack is counting on the company for recovery summer deux.

What a dilemma …

* * * * *
P.S. You may remember that McDonald’s got an ObamaCare waiver.

Coincidence?

Posted in Employment - Jobs, Obama | Leave a Comment »

Acts of incivility …

May 23, 2011

Last week the President caused quite a stir with his Mideast speech.

The specific topic aside, I was struck by his lack of basic courtesy to the Israeli Prime Minister..

Obama often scolds Congress and right-leaning activists to start acting more like adults … more civil.

That’s the same Obama who …

  • In an unprecedented act, called out the Supreme Court justices during a State of the Union address,
  • During the televised  “Healthcare Summit”, called the Senators and Congressmen by their first names,  They  honorably called him  “Mr. President” in return (not  Barack or Barry).
  • Invited Rep. Paul Ryan to sit in the front row for his deficit speech, and then rhetorically attacked him.

So, it is shouldn’t be surprising that the President would disrespect a foreign leader by blindsiding him with an inflammatory speech – the day before a state visit.

Sure-shot prediction: We’ll all be getting a scolding from the President this week re: acting more like grown-ups and adopting a more civil tone.

When he does, go ahead and scream.

Posted in Civility, Obama | Leave a Comment »

Highest Presidential IQ ever … since it’s obvious, no records required.

May 13, 2011

The sealed college transcripts flap got ratcheted up a level.

Historian Michael Beschloss claimed on Don Imus’ radio show that President Obama’s IQ is off the charts and that he is the smartest president we have ever had.

Hmmm.

Imus followed up with the logical question: “Well, what is his IQ?”

The answer: “Uh. I would say it’s probably – he’s probably the smartest guy ever to become President.”

Pretty convincing stuff, huh?

Just say it and it’s true.

For the record I don’t care what Obama’s IQ is.

But, if he’s going to dispatch his shills to hype it, he should feel comfortable showing some evidence.

Tell me again, why did Bush have to show his transcripts and why does Obama get a pass?

Posted in Obama | 3 Comments »

Quick question re: Obama’s taxes

May 2, 2011

President Obama was bummed that the space shuttle flight got delayed from last week.

A short blurb on the news said that he was carting Malia and Natsha along with him, so they were bummed, too.

Quite understandable.

But, it aroused my curiosity re: Obama’s tax return. So, I took a peek.

His listing for wages and other W-2 items was $395,188.

At first blush, that sounds about right since the Presidential salary is usually reported to be around  $400,000.

But …

From my biz days, I know that the IRS is finicky about “personal use of company aircraft” by execs who are traveling for personal reasons and for exec’s’ friends & family when they’re part of the posse.

Specifically, the IRS says: “Non-business use by an employee is generally considered a taxable fringe benefit. The value of the flight, or a portion thereof, must be included in the employee’s income. Whenever an employee’s guests (including family members of the employee) uses a company airplane, the flight is taxable to the employee.”

Hmmm.

In the biz world, the ‘imputed wages’ are usually the cost of a first class airline seat.

So, how come Obama doesn’t have his vacation trips with his family show up on his W-2?

Just wondering …  a loophole, perchance?

P.S. It really irks me when he drags along his mother-in-law.

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