Boskin on the Obama Budget

Stanford economist Michael Boskin:

The CBO baseline cumulative deficit for the Obama 2010-2019 budget is $9.3 trillion. How much additional deficit and debt does Mr. Obama add relative to a do-nothing budget with none of his programs? Mr. Obama's "debt difference" is $4.829 trillion -- i.e., his tax and spending proposals add $4.829 trillion to the CBO do-nothing baseline deficit. The Obama budget also adds $177 billion to the fiscal year 2009 budget. To this must be added the $195 billion of 2009 legislated add-ons (e.g., the stimulus bill) since Mr. Obama's election that were already incorporated in the CBO baseline and the corresponding $1.267 trillion in add-ons for 2010-2019. This brings Mr. Obama's total additional debt to $6.5 trillion, not his claimed $2 trillion reduction. That was mostly a phantom cut from an imagined 10-year continuation of peak Iraq war spending.

The claim to reduce the deficit by half compares this year's immense (mostly inherited) deficit to the projected fiscal year 2013 deficit, the last of his current term. While it is technically correct that the deficit would be less than half this year's engorged level, a do-nothing budget would reduce it by 84%. Compared to do-nothing, Mr. Obama's deficit is more than two and a half times larger in fiscal year 2013. Just his addition to the budget deficit, $459 billion, is bigger than any deficit in the nation's history. And the 2013 deficit is supposed to be after several years of economic recovery, funds are being returned from the financial bailouts, and we are out of Iraq.

A Ranking of Blogs

From Wikio.

An Upside of Downturns?

Surfer Magazine reports:

Fewer Shark Attacks - Thank The Economy

A recent report from the International Shark Attack File at the University of Florida cited the recession as the reason for a decline in shark attacks last year.

“Shark attacks worldwide in 2008 dipped to their lowest level in five years, a sign that Americans may be forgoing vacation trips to the beach,” the report said.

My Whereabouts

I will be at a Brookings conference over the next two days, watching the presentation of six excellent papers.

Check out in particular the paper by Phill Swagel. It gives an insider's view of the recent debates over financial policy.

Advertisement

From my inbox:

Dear Mr Mankiw,

i'm an italian student, i'm studying law in the university of turin and right now i'm reading your book for an exam of political economy.. and i wanted to thank you because even if my professor almost made me dislike this subject..reading "principles of economics" i'm understanding and loving it.. every page i'm more enthusiastic!

[name withheld]

Econ profs: I am sure none of your students feel this way about your lectures. But, even so, if you aren't using my, and this student's, favorite textbook, maybe it is time for a change. You can get information about the book by clicking here or by emailing Brian.Joyner@cengage.com.

Stiglitz on the Geithner Plan

Joe says no go: "the Geithner plan works only if and when the taxpayer loses big time."

Newest Members of Team Obama

They were announced earlier today (April 1).