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Today the Obama administration started the previously announced mortgage rescue plan.  I wrote a.  Simply put, I think it is a pretty ridiculous plan.  The portion for responsible homeowners to refinance was already in place.  I can prove this because in January before the plan was even announced and there was no appraisal at all on the refinance which means that they did not care about the loan to value ratio.  The new stuff is all in the incentives for modifying loans for people who cannot pay their obligations. So basically if you have good credit and you have been paying on time you are just stuck with higher tax bills to fund the program for people who has not been filling their obligations.  Great deal.

Anyway, I was going to write a pretty long rant about the new gargantuan Obama budget, but this article at American Spectator called said a lot of the things I wanted to say.  Here are some of the main points in the article that  I was going to write about:

  • Obama is raising the budget from $3 trillion in 2008 to $4 trillion in 2009.  This is a 25% increase.
  • Obama is growing the national debt by $2.7 trillion this year.  This is a growth of 27% in one year over the collective debt of the United States for the past 200+ years.
  • The deficit for this year is the largest ever at $1.75 trillion, which is more than 12% of GDP.
  • Obama pulls out a nebulous $2 trillion budget cut over 10 years for winding down the wars, but this is barely half of his first year’s budget.
  • Obama is keeping his promise of raising taxes for high earners, and also trying to limit the deductions they can take.  The money will be used to give refunds beyond what some tax payers pay.  Basically, a good amount of people could be paying no taxes and receiving extra tax refunds.
  • Increased taxes on energy companies will creep into consumer energy costs.

The funny thing is that Obama said that he is going to cut the deficit in half in four years.  I wonder if he means he will cut the deficit he creates.  The bottom line is, a bigger budget is absolutely not a better budget.  It is incredibly difficult to create a budget for an entire national government, but the sheer size of the government allows the president to find more areas to cut.   The problem is that I do not think a small and efficient government aligns with the Obama administration’s agenda.

Finally, all of this money is not free.  It will come from the backs of Americans in one form or another.  Even the poorest who will get tax rebates will be affected in some way either through higher prices or less employment due to higher business taxes.  The deficit also indicates that the government cannot collect enough tax revenue, so don’t expect the tax hikes to stop at those who earn over $250,000 a year.

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