The Congressional Budget Office reported last week that the Obama administration understated budget deficits “by more than $2.3 trillion over the upcoming decade,” and that “if Obama’s February budget submission is enacted into law it would produce deficits totaling $9.5 trillion over 10 years — an average of almost $1 trillion a year.” President Obama objects to even a tiny two percent cut in the federal budget, submitting a self-indulgent, smoke-and-mirrors budget that would actually increase spending even faster than previously proposed for 2012.
Obama’s record deficit spending is based on the notion — contrary to all evidence — that if the government increases spending, that spending will more than pay for itself through increased economic growth. (Never mind that Canada’s economy boomed after it slashed government spending in the 1990’s, and America experienced an “economic boom” after our government slashed spending in 1946.)
For example, even though “federal education spending has gone through the roof” in recent years, Obama has called for big increases in education spending, saying that “the best economic policy is one that produces more college graduates.” But dumping more money on colleges won’t spur economic growth.
Jacking up college attendance rates further just results in the presence of bored, unmotivated students who are not interested in learning, and only go to college to get a diploma, while spawning an economically-destructive “arms race” over who can acquire the most unnecessary credentials. Already, “36%” of “the nation’s undergraduates” learn “little” or nothing after four years of college, according to a study cited by USA Today. Many of their professors didn’t even try to teach them much: “32% never took a course in a typical semester where they read more than 40 pages per week.”
Obama has learned nothing from previous failed attempts to use massive government spending to grow the economy. Obama’s $800 billion stimulus package used “green-jobs” subsidies to send American jobs overseas. Seventy-nine of those subsidies went to foreign firms, such as an Australian firm that imported Japanese wind turbines, effectively outsourcing American jobs. Yet he wants to dump even more money on grandiose and impractical green-jobs schemes.
Spain’s “green jobs” program, which Obama cited eight times as a model for his own green jobs and global warming programs, completely failed, destroying jobs and driving up Spain’s skyrocketing government deficit. Each new green job “created” in Spain wiped out 2.2 existing jobs and cost $800,000.
Government spending can sometimes temporarily inflate the economy, but in the long run, it shrinks the economy by crowding out private investment. Based on rosy assumptions, the CBO had erroneously predicted the stimulus package would increase the size of the economy in “the short run,” but even that CBO analysis admitted that the stimulus package will shrink the economy in “the long run.”