Budget Fantasies & FlimFlam (4)

The spending cuts are accounting flimflam.

The record breaking increase in tax revenue is fantasy.

At his press conference Tuesday President Obama hoped to plant the perception in the mind of the public that his 2012 budget was an exercise in frugality.  Here’s one of his responses to budget questions:

…this is my third budget. The first two budgets were in the midst of the worst recession since the Great Depression, so we had a different set of priorities. And I said it at the time — in each of those budgets, what I said was, the deficit’s going up and we are compiling some additional debt, but the reason is because it is so important for us to avoid going into a depression or having a longer recession than is necessary…

This third budget reflects a change in focus. The economy is now growing again. People are more hopeful. And we’ve created more than a million jobs over the last year. Employers are starting to hire again, and businesses are starting to invest again.

Are we to believe this budget is “a change in focus” to cuts in spending and deficits?  Indeed the projected 2012 deficit of $1.1 trillion, while still alarmingly high would be a third less than the deficit now projected for 2011.  So how was this deficit reduction achieved?  Spending Flimflam coupled tax revenue fantasy!

First, there are token, insignificant spending cuts of $90 billion, or 2.4% less spending than projected for the current year, 2011.  But, as the chart shows 2012 spending would still be 25% more than 2008 and a whopping 36% more than 2007!

Second, the budget projects astounding increases in tax revenue, adding up to $454 Billion or 21% greater than the current year, 2011.  Individual income tax revenue is projected to increase by most in 4 decades. President Obama bases all his budget comments and promises on something he knows isn’t going to happen.

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