OMB report should cause "fear and trembling"

By Kevin Price

While CNBC reports that the stock market reached its monthly high this week about the same time that the President's Office of Management and Budget has released figures that should make every policy and investment expert alarmed.

Giovanni Russonello of Politico noted that, "Announcing its mid-year budget revisions, the Office of Management and Budget expects the deficit to hit $1.47 trillion at the end of fiscal year 2010 — a touch better than its earlier estimate of $1.56 trillion but still a record. And the unemployment rate for this year is expected to average 9.7 percent, less than the 10 percent projected in February but higher than it's been in almost 30 years." Remember, these are the administration's projections, an administration that made major corrections on the negative impact of the health care bill after an earlier (and arguably deceptive) report helped that legislation pass. It is safe to assume that this administration, as I am sure most administrations that proceeded, is projecting the best image possible through such a report, in these dire economic times.

Even if the numbers are accurate, what they are treating as "better than expected" numbers are among the worst we have seen in US economic history. That is definitely the case with the deficit. $1.47 trillion is fifty percent higher than what the entire US debt was in over 180 years in our country's history. It was in the early 1980s that our national debt passed $1 trillion dollars. This budget blows that number by fifty percent in a single year. The 9.7 percent unemployment expected for the rest of the year is the highest our country has experienced in over a quarter of a century. The "recovery rhetoric" falls upon deaf ears with these type of employment figures. Virtually everyone has heard the saying, "a recession is when a neighbor loses a job, a depression is when you lose your job." Millions of Americans are daily coping with recession or, in their world, a depression.

These numbers are a direct result of an administration that has been extremely hostile towards entrepreneurship and job creation. The so-called health care "reform," the automatic (and massive) increase in taxes in 2011, the automatic implementation of a huge minimum wage increase in an already weak economy, and other "anti-job" policies have all led to a heavy toll on the economy.

Congressman Kevin Brady (R-Texas), the Senior House Republican on the Joint Economic Committee summarized the OMB Review by stating that: "Congressional Democrats and President Obama are fully responsible for these disappointing numbers. Their failed stimulus and job killing policies, like the costly new health care entitlements we can't afford and the drilling moratorium, are adding up to a record $1.47 trillion deficit and yet another year of 9% or higher unemployment. Every American should be shocked that 41 cents out of every dollar spent in Washington is borrowed from our children and grandchildren's future earnings. The Office of Management and Budget Director admits this "requires attention," but admissions don't cut spending and that's what we have to do now." This obvious need goes against the trend of an administration that seems committed to worsening the nation's economic fortunes as justification for expanding government powers. This view was summed up recently by Attorney General Eric Holder, who told graduates at Boston University that "Positive change is the consequence of unfavorable and not favorable circumstance. Progress is the product of darkness, not light. Whenever you look into our past, this is true... It was economic turmoil that brought us the progressive era and the New Deal." This seems to be the guiding principle of the Obama government.

© Kevin Price