Federal budgets are by definition political documents, but even by that standard yesterday’s White House proposal for fiscal year 2013 is a brilliant bit of misdirection. With the abracadabra of a tax increase on the wealthy and defense spending cuts that will never materialize, the White House asserts that in President Obama’s second term revenues will soar, outlays will fall, and $1.3 trillion annual deficits will be cut in half like the lady in the box on stage.
All voters need to do is suspend disbelief for another nine months. And ignore the first four years.
The real news in Mr. Obama’s budget proposal is the story of those four years, and what a tale they tell.
• Four years of spending of more than 24% of GDP, the four highest spending years since 1946. In the current fiscal year of 2012, despite talk of austerity, Mr. Obama predicts spending will increase by $193 billion to $3.8 trillion, or 24.3% of GDP. The top chart shows the unprecedented four-year blowout.
• Another deficit of $1.327 trillion in 2012, also an increase from 2011, and making four years in a row above $1.29 trillion. The last time that happened? Never.