PrintJanuary 14, 2010
Stimulus flop
The ARRA (The American Recovery and Reinvestment Act of 2009) has become one of the spectacular failures of the Obama Administration and the Democratic Congress. The following are all direct quotes from the CBO (Congressional Budget Office) Directors Blog and Monthly Budget Review. Taken together they indicate that the financial engine of this county sputters toward economic calamity.
The federal budget deficit was about $390 billion in the first quarter of fiscal year 2010, $56 billion more than for the same period in fiscal year 2009 despite reduced spending related to turmoil in the financial markets.December 2009 marks the second consecutive December that the federal budget will record a deficit, CBO estimates. Typically, December yields a budget surplus because most corporations make quarterly income tax payments and withholding for individuals is relatively high because of year-end bonuses and seasonal employment. The deficit in December was $92 billion, CBO estimates, about $11 billion (with timing adjustments) more than the deficit recorded in December 2008.Without the timing shifts and the large reductions in spending in those two areas, (TARP and FDIC) first quarter spending would be up by $98 billion (or 13 percent) compared with outlays a year ago.Spending on unemployment benefits more than doubled from the first quarter last year, rising by $22 billion, because of high unemployment and extensions in the duration of benefits.Medicaid spending in the first quarter was up $14 billion (or 25 percent), nearly $10 billion of which is attributable to a provision in the economic stimulus legislation that temporarily increased federal payments to states under Medicaid.Spending for other stimulus programs also contributed to increased spending in December.CBO estimates that, in the first quarter of the fiscal year, revenues were about $59 billion (or 11 percent) lower than receipts in the same period a year ago.Net corporate income taxes declined by about $15 billion (or 30 percent) compared with receipts during the same period last year because of a combination of higher refunds and lower payments of estimated taxes.
In summary, revenues are down $59 billion (11%) and spending is up $98 billion (13%) for the first quarter of fiscal 2010 as compared to 2009. Even before the passage of the $2.5 trillion healthcare bill, this Administration's willful disregard of basic economic principles is a lethal cocktail for the welfare of this country.
America's national security is ultimately tied to the health of the American economy. This Democratic Congress and Administration have purposely allowed our economic decline to accelerate. China, Russia, Iran and North Korea must be carefully pondering those once impossible questions about the fate of the United States of America.
