Tuesday, March 03, 2009

Officials Try To Defend Obama's Budget: Lipstick on the Pig Time!

Good luck because they are pretty much trying their best to polish a turd.

But Geithner defended the overall proposal, saying far more people would benefit from lower taxes under the plan. He said the budget reflects what Obama viewed as "a deep moral imperative to make our society more just. But it's very good economic policy too. It will mean there is again a fairer, more equitably shared tax burden on the vast majority of Americans."

The problem is that it soaks the rich, punishes charities, and rips off energy companies in order to give the middle class $13 more per paycheck. There is no justice in crippling the economy during a recession in order to give more people tens of dollars. Then we have pollyanish economics in this budget.

The budget forecasts that the economy, as measured by the gross domestic product, would only shrink by 1.2 percent this year and then snap back and grow by a solid 3.2 percent in 2010, followed by several years of annual growth of over 4 percent.

That's more optimistic than most private forecasts, and comes despite a new government report showing the economy contracted by 6.2 percent in late 2008, far more than the 3.2 percent drop first reported.

We better have a robust last 2 quarters to make up for the GDP losses we have now in order to get to just a 1.2% contraction. And 3.2% growth followed by 4% growth after a worldwide recession is shooting for the moon. However the cap and tax thing is the worst part of the budget.

Obama wants to reduce the emissions blamed for global warming by auctioning off carbon pollution permits. The proposal, known as cap and trade, is projected to raise $646 billion over 10 years.

Most of the money would be used to pay for Obama's "Making Work Pay" tax credit, which provides up to $400 a year to individuals and $800 a year to couples. The plan also would raise money for clean-fuel technologies, such as solar and wind power.

That means everyone gets to run in place and the leftovers go to a poorly articulated "green" plan. However he should know that tax credits (or outright cuts) will go a lot further then cap-and-tax. And if nuclear is not put in the clean-fuel category then Obama is not serious about getting rid of global warming or weening ourselves off of foreign oil.

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