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Obama 2009 Budget Projects Deficit of $1.75 trillion
President calls for fiscal responsibility and hard choices, but not yet.
By Adam Brandon on February 26, 2009
Washington, DC - President Obama’s $3.5 trillion 2009 budget will spend money today and burden taxpayers for generations. Under the Presidents proposal, spending will increase to nearly 35 percent of GDP, far from the historical norm of 20 percent, and the deficit will soar to 12.3 percent of GDP, levels not seen since the height of World War II.
The proposed budget caped off a week in Washington that included both a trillion dollar ‘stimulus’ bill as well as a ‘fiscal responsibility’ summit.
Included in the budget is an additional $250 billion bailout for the banking industry and a $650 billion tax hike to fund government expansion in health care. Also included is a cap and trade scheme that will cost consumers hundreds of billions of dollars, raising the cost of electricity by 68 percent and adding $1.27 to a gallon of gas.
All totaled, over the next ten years the budget raises $1 trillion in new taxes. Individuals will be burdened by an additional $650 billion and companies will face an increased tax burden of $350 billion.
In light of the dire budget proposal, The Brookings Institution sent a letter to the President warning of the devastating consequences of our out of control debt. According to the letter:
"We will have to borrow money in domestic and international capital markets to finance this debt, and without a serious commitment to long-term fiscal restraint, lenders will eventually question the nation's fiscal credibility."
FreedomWorks Chairman Dick Armey commented:
“There are only three ways a government can spend money it does not have: borrow, raise taxes, or simply print more money. President Obama has chosen to borrow today. This sets up higher taxes tomorrow, or the possibility the government will simply print money and inflate our way out of the mess, devastating families and destroying the incentive to save and invest. Make no mistake, the $1.75 trillion dollar deficit is simply borrowed from future taxpayers at a cost to future economic growth. President Obama is arguing that you need to spend money to save it, and in the process changing an old saying, because the Presidents’ budget is essentially an attempt to rob Peter to pay Peter.”