A number of small indicators — the poor reviews of Sonia Sotomayor, attempts by Hillary Clinton to regain the center stage of foreign policy, and admissions by the President that unemployment will continue to rise — suggest that the Barack Obama’s initial political capital is running out. Maybe the most dangerous indicator that the impetus for Hope and Change is petering out is from Bizzyblog (hat tip: Tigerhawk); it’s a chart showing that tax revenue from the corresponding period last year is down. The source data from Treasury is here.
Tigerhawk asks, how long can the current policy regime keep going?
The problem with having an MBA is that your mind is trained to reduce expenditures and cash disbursements in such a situation, when clearly, the correct solution (we know this from the people who have Masters in Governmental Affairs, or some such equivalent degree, who are currently in charge) is to massively increase spending. A 31% drop in 2Q receipts 2009 vs. 2008, and we are going pedal to the metal in spending — not just a tweak of federal spending, but testing the outer limits of our debt capacity by any absolute or relative measure. What happened to the self-description of Democrats being the “reality-based” party?
My answer is ‘as long as it can and then some’. Yet ultimately the laws of gravity must come into play.