I read an article the other day about President Obama's budget submission. In the article there was a snippet I found funny about the Reagan administration. It was that the highest ranking female in the administration was Rosy Scenario. I laughed when I read it.
The main point of the article is that the proposed budget is overly optimistic in estimating government revenue.
The budget estimates that revenues for 2009 will fall by 13.4% resulting in a deficit of $1.75 Trillion. That is $1,750,000,000,000.
The GDP (gross domestic product) actually shrank by 6.2% in the last quarter of 2008. The administration is estimating the economy will shrink an additional 1.2% in 2009.
Others are predicting nearly twice as much shrinkage and some even more than that.
The problem is that none of those making predictions expected the 6.2% number.
Just guessing I suspect the economy is going to retract far more in 2009 than is estimated by the administration. I also suspect the cost of the ambitious programs proposed will be more than estimated.
Moreover I really see nothing that the administration is proposing that is likely to cause the economy to grow. Taxes have to increase. Regardless who is paying the taxes there still is going to be less money left in the private sector. And there is lots more government red tape proposed which increases costs by its very nature. I honestly cannot see how this will result in more private sector jobs or greater GDP.
Another thing that I really do not understand is the health benefits program proposal. People on Medicare and Medicaid are not exactly doing great as it is. Cutting benefits to those programs and redistributing that money to those with no coverage at all seems ill conceived to me at best.
I am not exactly pessimistic yet but neither have I any optimism left.
P.S. - Paul Harvey
I read this morning that Paul Harvey died yesterday. I knew he was a bit younger than my Dad and Mom. I remember him in 1970 telling then President Nixon to get out of Vietnam. I remember when "Rest of the Story" was new. It was in 1976 according to the article I read.
Talk about optimism though: when he was 82 he signed a 10 year contract with ABC. That was in 2000. Pretty close.