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Accelerating Towards the Abyss: The Real Story of Fiscal Year 2010

The Obama administration and the Pelosi-Reid Congress have spent wildly and run up deficits recklessly on a scale virtually unprecedented in human history.

by
Tom Blumer

Bio

October 25, 2010 - 12:00 am
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This would not be happening in a truly improving economy. What the figures tragically show is that the “Going Galt” phenomenon, which got going in mid-2008 as what I have been calling the POR (Pelosi-Obama-Reid) economy began, is continuing and spreading. Those of us who have been asserting that “it’s the uncertainty, stupid” have not been crying wolf. Non-witheld receipts won’t recover significantly unless and until something is done about that uncertainty.

Many of us have also been saying, “It’s the spending, stupid.” That situation also worsened in fiscal 2010.

As the following graphic shows, taking away lower payouts to wards of the state Fannie Mae and Freddie Mac and the effects of the Troubled Asset Relief Program (TARP), out-of-pocket federal spending in fiscal 2010 shot upward (figures presented are from the CBO’s pre-release report, and only differ by very minor amounts from the final Treasury Statement):

Spending on the regular operations of the government in fiscal 2010 was 7.5% higher than the previous year. Even if you buy Team Obama’s claim (which I don’t) that fiscal 2009 spending had to increase radically to combat the recession, what justification is there for the 2010 spike, when inflation was barely 1%?

Let’s look at just a few of the increases in departments having little or nothing to do with economic recovery (detail assembled from the Treasury Statement is here):

  • Commerce — increased by 23%, from $10.7 billion to $13.2 billion (pretty sad, given how little increase in real commerce there has been)
  • Education — up 74%, from $53.4 billion to $92.9 billion (if you don’t think that kids have become 74% better-educated, you’re not alone)
  • Energy — up 30%, from $23.7 billion to $30.8 billion (I guess attempting to stop energy development and exploration at every turn requires a lot of money)
  • EPA — up 36%, from $8.1 billion to $11.0 billion (this might be a grim “bargain,” given that the agency’s regulatory burden seems to have increased by a much higher percentage)
  • International Assistance — up 35%, from $14.8 billion to $20.0 billion (somehow, those who were supposed to like us more once Barack Obama was elected don’t seem to appreciate our expanded largesse)
  • Small Business Administration — up 177%, from $2.2 billion to $6.1 billion (quite ironic, given how small business has suffered since the POR economy began)

One of the few decreases that occurred took place in an area that involves a key constitutionally designated duty of the government. It was in Homeland Security, where spending declined 14%, from $51.7 billion to $44.5 billion.

All told, Uncle Sam’s fiscal 2010 operational deficit was really $1.435 trillion, a breathtaking 19% increase from fiscal 2009:

And yet, we’re still not done. The $1.435 trillion is just the “on-budget” deficit. During fiscal 2010, the national debt went up by $1.652 trillion (from $11.910 to $13.562 trillion), meaning that “off-budget” activities generated over $200 billion in additional deficits. The national debt has increased by over $3 trillion since Obama’s January 20, 2009, inauguration.

Now that this column has completed its fog-clearing operations, the truth becomes undeniable: The Obama administration and the Pelosi-Reid Congress have spent wildly and run up deficits recklessly on a scale virtually unprecedented in human history. They have no interest in stopping — unless they themselves are stopped, at the ballot box and during the years that follow

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Along with having a decades-long career in accounting, finance, training and development, Tom Blumer has written for several national online publications primarily on business, economics, politics and media bias. He has had his own blog, BizzyBlog.com, since 2005, and has been a PJM contributor since 2008.
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