A lesson about debts and deficits using tequila, because that’s the only way.

So yesterday, an alert reader alerted (really? I can’t think of any other way to put this, sorry) us to Barack Obama’s appearance on Meet the Press, wherein he claimed a lot of things, but most notably, claimed to have cut spending by “over a trillion dollars” in fiscal year 2011.

The alert reader asked whether this was true, and whether it was possible to look at this from a non-partisan perspective, because like, 90% of what comes out of these people’s mouths is bullsh*t and it’s just become this thing where we just hate everyone now.

The answer is, it’s “sort of true if you leave out, like, half of the story and ignore a lot of stuff.” But it’s also sort of true if you pay attention to the other half of the story and pretend unicorns fart rainbows.

But before we get into that, let’s straighten one thing out: the difference between debt and deficit. Say you have a “tequila budget” wherein you spend so much of your income, let’s say $1000 per month, on keeping yourself in tequila. This is meant to be a hard-and-fast budget line, as in, anything spent over $1000 on tequila is considered “too much tequila for your income to handle.” So despite your tequila issues, you have to stay within a range, which is an addition to your overall debt, but it’s a range. Because this is tequila we’re talking about, you don’t. So, you end up spending $2000 on tequila because it’s been a rough month and you hate everyone and they’re probably going to make it illegal anyway. That is $1000 over your tequila budget, resulting in a tequila budget deficit. Now, if next month, you spend $1500 on tequila, you have, technically, cut your tequila budget deficit by $500, but you’re (1) still going over your tequila budget and (2) still adding to your overall tequila debt. The only way to effectively address your tequila debt is to spend less than $1000 per month on tequila.

This is important to understand because DC loves to conflate debt and deficit hoping you won’t notice. Federal spending is curtailed by a Federal budget, or it usually is, if Congress does their job. Unfortunately, over the last few years, Congress hasn’t, and while Obama has put forth a budget on occasion, no one ever votes for it, so it’s essentially meaningless drivel that he pays worker bees to come up with while they charge overtime to the Federal coffers. So when Obama says he’s “cut the deficit,” what he’s actually saying is “he’s spent less money than the imaginary budget wouldn’t allow him to spend anyway if it existed.”

Spending, overall, has increased:

According to the White House Office of Management and Budget, federal spending was not cut by $1 trillion in 2011. In fact, in fiscal 2010, federal spending was $3,456,213,000,000. In fiscal 2011, federal spending was $3,603,213,000,000. That was an increase of $147 billion.

While President Obama did not cut federal spending by $1 trillion in 2011, he did increase the debt by more than $1 trillion in that fiscal year. In fiscal 2011, according to the White House Office of Management and Budget, the federal deficit was $1,299,595,000,000. That was up from a deficit of $1,293,489,000,000 in fiscal 2010.

So if he didn’t cut spending, what did he cut? Well, he cut lots of things, but ultimately, he also spent a lot of money, which means that, overall, while he cut spending, he didn’t actually cut spending. He did however, appear to cut the budget deficit, if you consider the budget to be essentially the same as the one that was in effect at the time Obama took office.

Obama took office in the middle of fiscal year 2009. At the time of his initial pledge, the president said his administration inherited a $1.3 trillion deficit, but the deficit for that fiscal year ultimately reached about $1.4 trillion.

In fiscal years 2010 and 2011, the annual deficits were roughly $1.3 trillion.

For fiscal year 2012, which ended Sept. 30, the nonpartisan Congressional Budget Office has estimated an annual deficit of about $1.1 trillion. That is the last full fiscal year during Obama’s first term.

This is partially because we’ve failed to handle the Fiscal Cliff, and Congress has kicked the can of determining the budget down the road until they were safely past their own elections. If we go over the Fiscal Cliff, as the Administration seems keen on doing, that $1.1 trillion number will jump up $300B per year for the next four years, meaning that the $1.1 trillion deficit now becomes a $1.4 trillion deficit in 2013. And that’s just if negotiations go correctly. If Obama gets his full wish list, the deficit will hike up $4.5 trillion over the next four years.

Here are Obama’s desired alternative fiscal policies to avoid the fiscal cliff in order of their effect on the five-year budget as estimated by the CBO:

1. Preserve Bush tax cuts and other tax provisions for everyone except the top 2 percent: Raises the five-year deficit by $2.0 trillion.

2. Drop the fiscal-cliff sequestration of spending and expand discretionary spending by the rate of inflation: Raises the five-year deficit by another trillion dollars.

3. Raise the tax rate on the top 2 percent:  Lowers the five-year deficit by $300 billion.

4. Extend enhanced unemployment benefits: Raises the five-year deficit by $200 billion.

5. Do not cut Medicare payment rates to physicians: Raises the five-year deficit by some $100.

Four out of five of those will eventually increase the budget deficit. Only one, the millionaires tax, will lower it, but given the amount that the Administration intends to spend over what it’s spending now, taking a few hundred billion from millionaires (who may find ways to avoid the tax anyway) is a bit like peeing into a thunderstorm.

And it’s also important to remember that in 2014, Obamacare kicks in. And as of yet, no one knows exactly how much that will cost. Because – and this is key – Congress passed the f***ing bill without reading it.

Not only does this not cut the deficit, but it actually adds to America’s overall debt, potentially increasing the total debt owed to $20 trillion by the time the winner of the 2016 contest takes office in 2017.

The problem here is that the Republican plan is no better. Very little of the proposed Fiscal Cliff “plans” address the massive burden government spending is about to place on the taxpayer, and while the tax increase ends up being nearly useless, the spending cuts proposed by people who run on the claim of championing “smaller government” seem to be only slight improvements on what’s already on the table or, in the alternative, moderate Dem plans that ease the pain of raping the taxpayer by spanning the hikes out over the next three years, rather than just holding you down and getting it over with on January 1st. The closest thing Boehner could come up with to a plan merely placed the tax increase threshold at a nice round number, $1 million.

So to answer the question, Obama has added to the overall debt, but lowered the deficit, but probably only because we don’t really know what the deficit is, and because concrete decisions on spending had been held off because Congress and the President recognized their job security as being more important than anything else. And despite promises to lower spending, the debt and the deficit, Congress has absolutely no interest in reining in their ability to spend your money. And they just voted themselves a pay raise for doing such a damned good job at it.

So, in short, your answer is that you should f***ing hate everyone. Happy New Year, you filthy animals. Here’s hoping you’ve got a little left in that tequila budget.

  1. Bobgood1

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