Wolf Richter www.testosteronepit.com [8]
Even the Soviets with their iron-fisted approach and fiat economy couldn't come up with a reliable five-year plan. And in the US, one-year forecasts are accurate only by accident. But ten-year forecasts, whether by the White House or by the Congress, are the ugly sisters of BS—their hilarious gimmickry serves to amuse us during the dreariness of election-year politics.
So President Obama unveiled his budget proposal for fiscal 2013 through 2022. If all goes according to plan, gross national debt will jump from todays $15.4 trillion to $17 trillion by the end of fiscal 2013, about 110% of GDP. The continuation of a bipartisan fiasco: President Bush started out with a debt of $5.7 trillion.
The White House projected a growing economy—recessions don’t occur in forecasts. Part of the growth would come from the ballyhooed revival of manufacturing. In a paper that clearly wasn’t designed for the rank and file, the White House outlined its strategy: lowering real wages to make the US competitive with low-wage countries. For that whole debacle, read.... When the White House Touts Falling Wages [9].
And it would cut the budget somehow (though it would keep growing). For example, it would spend $360 billion less in Medicare and Medicaid over 10 years—less than what?—by squeezing providers and charging higher out-of-pocket fees. But it does nothing about a core issue: Medicare fraud. It’s a vast scheme. But no insurance company falls prey to it. Only Medicare cannot defend itself. It doesn’t even know when it’s happening because, inexplicably, it doesn’t analyze the bills. It pays based on the honor system! So a whole industry has sprung up to defraud it. And these cases make your skin crawl. Read.... The Systemic Nature of Medicare Fraud [10].
But the White House budget is just decoration. Fiscal decisions are made in Congress. And Congress will never pass another budget again. Oh no. Those times are over. Budgets are like so 20th century. Now they do continuing resolutions. And Republicans are already out in force picking the budget apart. The proposed $4 trillion in cuts over ten years may only be $300 billion, they say. Who knows. The national debt will continue to balloon. The only question is how fast.
Congress is the quintessential American institution: it spends far more than it takes in and borrows the difference. To heck with the future. And some people get to profit from it. It all adds up to GDP. Lawmakers are so proficient at it that 36% of what they spend has to be borrowed. Obviously, their job approval rating must be in the stratosphere....
Oops. Only 10% of Americans thought Congress was doing an acceptable job, according to the most recent Gallup [11] poll. The worst ever! Disapproval etched up to 86%, matching the December record.
Even the leadership of Greece got a better score [12]—though people are rioting in the streets of Athens, throwing Molotov cocktails, and burning down buildings to express their discontent. A stunning 18% of Greeks approved of the job their leadership was doing, while only 76% disapproved. These astronomical numbers must bring wistful smiles to the lips of our storied lawmakers.
It has been a horrendous dive from the lofty 84% job approval rating of October 2001, when the country erroneously looked up to Congress as a source of hope and guidance. Republican voters are the least dissatisfied with Congress, awarding it an approval rating of 12%, same as the previous low. Democrats are getting more frustrated, dropping from 14% to 11%. And independents continue their push towards zero, though sampling error, apparently, nudged their approval rating up from 7% to 8%.
With elections coming up, lawmakers are furiously contemplating how they might be able to buy a few percentage points. Several hundred billion dollars that would have to be borrowed from the future would go a long way. Well, not a long way. That would require trillions. But it might keep their job approval rating above zero through November.
Ironically, as long as our personal lawmakers shovel some of the moolah our way, we’ll vote for them again, though we agitate about the other scoundrels in Congress. And shoveling moolah around is what the congressional oeuvre, the tax code, is all about—just when corporate tax dodging scandals pry open its.... Strenuously Hushed-Up Basic Flaw [13].