I am mostly in shock at the size of this budget. Our GDP is about $14 trillion. This budget for 2010 is a quarter of our entire GDP. That seems pretty big to me–not that $3.55 trillion isn’t a massive number by itself. The deficit will be greater than the GDP of our neighbors above–Canada.

Obama’s plan to cut the deficit by 50% to about $533 billion in 2013 is becoming less and less believable. Not only is the budget for 2010 ridiculous but, Obama intends to increase spending to $3.94 trillion for this year. All of this is bad for the economy. Increases in government spending is a decrease in productive spending in the private sector.

“The deficit would remain near $1 trillion over the next two years before dropping to $581 billion in 2012 and $533 billion in 2013, the year that Obama has pledged to cut the deficit he inherited in half.”

The first thing you do to get yourself out of a hole is to stop digging. Obama believes that you should dig at an even faster rate. We are now going to sink faster and deeper.

In order for Obama’s budget plan to work, he is assuming that the economy “will come roaring back with economic growth of 3.2 percent next year and 4 percent-plus rates in the following three years”. Right. His stimulus bill is going to make things worse so this highly optimistic idea of economic growth is wishful thinking.

These massive budget deficits planned for the next 4 years is going to skyrocket the national debt. We are talking about adding over $4 trillion to the national debt. The national debt is currently about $11 trillion. If we add another $4 trillion to that, our national debt will be greater than our GDP.

The financial and economic side of the Obama administration is clearly out of their minds. It is going to be difficult for the dollar to survive this and for the American economy to thrive with these massive burdens. It is important to remember that governments cannot create prosperity.

By Tommy Leung

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