Economy: bad. Revenues: worse. Outlays: enormous. Deficit: exploding. Unemployment: thermonuclear.
Answer?
Spend even more, according to Barack Obama’s budget director, Peter “Pills All Around” Orszag.
U.S. unemployment will surge to 10 percent this year and the budget deficit will be $1.5 trillion next year, both higher than previous Obama administration forecasts because of a recession that was deeper and longer than expected, White House budget chief Peter Orszag said.
The Office of Management and Budget forecasts a weaker economic recovery than it saw in May as the gross domestic product shrinks 2.8 percent this year before expanding 2 percent next year, according to the administration’s mid-year economic review issued today. The Congressional Budget Office, in a separate assessment, forecast the economy will grow 2.8 percent next year. Both see the GDP expanding 3.8 percent in 2011.
“While the danger of the economy immediately falling into a deep recession has receded, the American economy is still in the midst of a serious economic downturn,” the White House report said. “The long-term deficit outlook remains daunting.”
Here’s the punchline:
“I know there are going to be some who say this report proves we can’t afford health reform,” Orszag said. “I think that has it backwards” because savings must be squeezed from the system.”
The system? Or the peasants, Pete?
Here’s a quick, back-of-the-envelope calculation you can do at home: Consumer spending makes up about 70% of the US economy. The White House is projecting 10% unemployment. And a 2.8% growth in the economy. At the same time. Taking into account the current tax rates, the current government revenues, the current government outlays and the price of tea in China, how likely do you think it is that Peter Orszag is talking out his posterior right now?
These numbers are way off – in the rosy direction. For a slightly more scientific analysis without quite as much snark, I’d recommend this. It is not pretty.
This is why they delayed the announcement of all of this and tried to ram ObamaCare through before these numbers came out.
