Budget FlimFlam: Spend More & Report Cuts

Much of the media’s “information” about the federal budget is deception made possible by the arcane budgeting process in Congress.  President Obama didn’t invent the process.  But he’s an enthusiastic practitioner of the deception.

When the President delivered his 2012 budget to Congress the media shouted “$1.1 trillion in cuts!”  Did this mean the government would spend $1.1 Trillion less?  Nope.  As the chart at the bottom of this article shows, Obama’s own budget calls for ten years of continuous spending increases.

Decoding the “information” in the media starts with understanding two key words in government budgeting:

  • baseline” and,
  • assumptions.”

The baseline is projected spending over the next ten years.  The baseline numbers result from a set of assumptions, starting with the assumption that almost every government department, agency and program will receive an automatic budget increase every year.  The size of those increases is based on additional assumptions.

Often, when a President or Senator speaks of “deficit reduction,” he does not mean the total, bottom line deficit will be less in the future than it is today.  His precise meaning is that the 2 or 5 or 10 year deficit prediction on the latest piece of paper from the White House is less than on the previous piece of paper.  Or, he means the amount a particular department or program will contribute to the deficit is predicted to be less on the new piece of paper.

A perfect example of this deception can be found in Obama’s budget numbers for “overseas contingency operations,” code for Iraq and Afghanistan.

  • The most expensive year for Iraq and Afghanistan combined was $185 billion in 2008.
  • In 2010 the cost was $167 billion.
  • The Administration has budgeted $165 billion for 2011 and $127 billion for 2012.

The Iraq operation is scheduled to end, with all US troops leaving this year, 2011. The Afghanistan operation has never been as large or expensive as Iraq and reductions in troop strength and cost are now scheduled to begin in 2014.  If all goes according to plan there will be virtually no US troops left in Afghanistan after 2016.

Yet, as the table to the right shows the Obama budget, under Overseas Contingency Operations, projects more than a trillion in “deficit reduction” for years 2012 – 2021.  This is because they first asserted a baseline assumption that the cost of Iraq and Afghanistan would increase every year from now through 2021, even though they knew it would not.  Then, they subtracted what they believe will be real, declining cost each year, probably reaching near zero by 2016.

Thus, they can now magically report “deficit reduction” of $136 billion in 2021, ten years after the last American soldier will have left Iraq and five years after the end of the Afghanistan operation.

Through repetition in the zombie media they can plant in the mind of the public a perception that there will be some sort of “cut” in spending.

As the chart below shows, the Obama budget document shows continuous annual increases in total government spending at the same time war spending winds down.

Obama’s budget projects declining deficits in 2012 through 2015 only by also projecting enormous tax increases.

1 Comment so far

  1. money making easy on February 26th, 2011

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