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.

Sometimes I wonder if these are just typos but, is everything in hundreds of billions these days? We just allocated almost $800 billion for the economic stimulus. No one knows where this money is coming from–the government doesn’t have money. Now, there is a leak that Obama’s budget will include $634 over 10 years to deal with healthcare.

I want everyone to be able to afford health care. The problem is not that the free market doesn’t work in health care–it can work just fine. The problem is that government keeps regulating and subsidizing poor health care models. Car insurance doesn’t cover tune-ups and oil checks, why does health insurance cover regular check-ups? This will only drive up the price of health care.

The big question right now is not about whether we should have universal health care or not. The question is how are we going to pay for this? If Obama is planning to cut the budget deficit by 50% in 2013, he is not going in the right direction.

The stimulus bill was a bad idea and history will show that it will be money thrown into a black hole. We are still maintaining out military empire all over the world–that alone costs almost $1 trillion. We are going to expand the war in Afghanistan–that will cost money. The economy is shrinking.

So how are we going to pay for this? Taxes? The American people can’t afford to give more in taxes–we need to tax less. Borrowing? That is just another means of taxation–future taxation. Printing presses? That is also a tax–a hidden one where our money loses purchasing power.

Obama is not change. He is doing exactly what Bush did. Spend the country into oblivion–except Bush spent slower.

Economics is going to take center stage for the Obama administration this week. Obama is having a Financial Stability Summit with a variety of people including cabinet members, economic aides, and Congressional leaders. He will then speak to Congress on Tuesday at 9PM about the economy.

On Thursday, Obama will unveil his budget and plan of action to “fix” the economy. The markets fell off a cliff last week and is still sinking today. The markets may or may not rally after Obama unveils how he will manipulate the economy and cause capital to move into areas that the market feels it should not.

Obama also pledged to cut the budget deficit in half by 2013. I suppose if you increase the deficit enough, cutting it in half would be less difficult. $500 billion deficit looks better than $1 trillion but, it is still pretty astronomical.

Chances are all the spending will do nothing to fix the economy and surely make things worse. It hasn’t worked in the past. Even the crazy Keynesians like Paul Krugman agree it hasn’t worked in the past. They just think there wasn’t enough spending–how laughable.

The single biggest debate topic I have with my European friends is about guns. I have already written about the guns after discussing it with them. No one has changed their minds since. My political stance on every issue revolves around the protection of Liberty.

From what I have gathered, Europeans treat guns as if they were nuclear weapons. While I do not disagree that guns can kill people and have been used to kill people, I do disagree that we should have laws against guns. There are many reasons for this line of thinking. The most important one being that owning a gun does not directly harm anyone and disallowing someone to own a gun is a violation of Liberty.

I refuse to take away any Liberty. I do not believe you can take away some Liberty so that some other Liberties can be protected. That is what the recent debate was about. I first head this argument after a few beers–perhaps some tequila as well–but, I still understood that owning a gun is not a violation of Liberty.

The credit for the argument that the act of owning a gun is a violation of Liberty–and that being why I should be against guns–goes to my German friend who is also teaching me German. Her argument is that guns have no purpose outside of killing. Because its only purpose is to kill, it is a violation of the Liberty.

I do not know if gun technology is useful for anything else. I’m not that knowledgeable about guns. No one knows if gun technology can be useful in the future. I can accept that guns have no use other than killing–whether in defense or aggression. The part where her logic falls through the floor is claiming that ownership of a gun is violating Liberty.

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Not that it should be a surprise to anyone who understands politics and economics–they always go hand in hand–but, the stimulus bill being pushed through into law contains many things that may not boost the economy. The only thing we hear about is how we need to act immediately to combat the worsening economy. No politicians talk about how the use of money in the stimulus is actually going to stimulate anything.

I’m under the impression that these politicians have no idea how or even if all this spending is going to “stimulate” the economy. If they were masters of economics, they wouldn’t have to rely on the rest of us to provide them a living. The one thing politicians are good at is taking other people’s money–by force of government–and then spending it recklessly on projects they deem important or necessary.

It is economic fact that central planning does not work and it only makes society poorer. The United States has been the shining light for prosperity because of the freedom of our markets. They have never been truly free but, still freer than most other places.

The idiocy of all the economic policies coming out of Washington is that they are all central planning tactics. We know what works and we know what doesn’t. Why are we constantly trying to use what doesn’t work?

It is more than possible that we need to rebuild some of the infrastructure in this country and that we need to find alternative forms of energy. The question is not if we need it but, does government know better than the rest of us if we need it.

And of course, do you take money from someone in California to build a bridge in Minnesota? The obvious is answer is, no. What all these stimulus bills and government works projects does is exactly that, take money from one person for the benefit of another.

There is nothing wrong with charity however, an attribute of charity is that it is voluntary. If one cannot opt out, it is stealing. It doesn’t matter if you use the barrel of a gun or the force of government. Thievery is thievery.

At best this stimulus package will shuffle money around and by pure luck the end result will be close to the optimal result the free market would have made. At worse, this bill will plunge the American economy into an even greater recession/depression.

No entity or person is capable of making better decisions faster than hundreds of millions of people making decisions with their money several times a day. To believe that you know better than the independent decisions of millions of people is incredibly arrogant to say the least.