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Another Broken Promise: Obama's Pledge to Cut the Deficit in Half

www.blogcabin.net2/22/12

Another Broken Promise: Obama's Pledge to Cut the Deficit in Half. After being sworn in as president three years ago, President Obama vowed to cut the budget deficit in half by the end of his first term. However, the deficit has …

Video – Obama promises to cut the deficit — The Obama News …

www.theobamanewsnetwork.com2/25/12

Presdient Obama telling another tall tale about his desire to cut the deficit in half.

Will Obama Cut The Deficit In Half?

Amongst his many pledges before taking office, Obama’s claim that he would cut the federal deficit in half by the end of his first term, was perhaps the most ambitious.

Now in office however, he continues to introduce one new spending proposal after another, and as he does so, the country’s deficit continues to grow at an unsustainable rate, and the American people are showing increasing concern.

Just the health care reform plan alone is likely to more than double the already huge 2009 deficit which is now expected to exceed $1.8 trillion, but Obama claims that the plan will somehow remain deficit neutral;

"Like energy, this is legislation that must and will be paid for. It will not add to our deficits over the next decade. We will find the money through savings, and efficiencies within the health care system", he said last Tuesday, June 23 2009.

According to recent polls however Americans remain largely skeptical.

A New York Times/CBS News poll indicated that 60% of Americans don’t believe the president has a strategy to reduce the deficit.

A Wall Street Journal/NBC poll suggested that 58% of Americans want the president to give controlling the deficit, a higher priority than a speedy economic recovery.

Obama said in a recent interview that the deficit issue is something that keeps him from sleeping at night, and added;

"There’s no doubt that we’ve got a serious problem in terms of our long-term deficit and debt. I make no apologies for having acted short-term to deal with our recession".

And so it should keep him awake, because the numbers are mind blowing;

The fiscal stimulus bill, $787 billion

The "place holder" for additional financial stabilization funds, $125 billion

The homeowner stability program, $75 billion

The State Children’s Health Insurance Program Re-authorization between 2010 and 2019, $38 billion

The Cap and Trade program for 2020, $22 billion

And the money for these programs will supposedly come from;

Savings from the war in Iraq when it comes to an end, whenever that happens.

Doing away with unnecessary, inefficient, and as yet unnamed government programs.

Taxing Americans who earn above $250,000

However, JD Foster who is an economist at the Heritage Foundation says;

"Raising taxes is the obvious answer. I think there’s no question that we might want the rich to pay more in tax, but there isn’t enough money among the rich to tax it all and really make a significant dent in the deficits that we’re facing. That’s just not going to work. We’re going to have to try something else, either raise taxes on the middle class because that’s where the bulk of the money is. Or we’re going to have to start getting serious about cutting spending".

Various articles appeared on blogs during the election campaign that questioned Obama’s impossible sounding tax and funding proposals, but they were buried by the main stream media’s push to get him elected.

Understanding The Tax Cuts

Obama And The Magic Kingdom

More and more people are now crying out that Obama is far more liberal than they expected him to be, but if they’d done more than read headlines, and listen to campaign speeches, they would have known that he was irrefutably linked to the Far Left ‘New Party’ (read communist party) less than 12 years ago.

Supply-Side Economics | The CERF Blog

www.clucerf.org1/10/12

As early as the 1950s, Mundell proposed an economic policy program of tight monetary policy to stabilize the value of the currency and low tax rates to stimulate economic activity. During the late … The Reagan Scenario included a sharp drop in inflation, a recession in 1982 due to tight monetary policy, passage of the Kemp Roth tax cuts and an economic boom starting in 1983. … Inflation and interest rates are much lower and tax rates are lower as well. While a high …

The hidden dangers of low interest rates | David Cay Johnston

blogs.reuters.com1/10/12

Low rates also come at a cost, cutting income to older Americans and to pension funds. This forces retirees to eat into principal, may put more pressure on welfare programs for the elderly, and … If rates return to, say, 6.64 percent, the level they were in 2000, one year's interest costs would equal the individual income taxes for all of 2011 plus the first few weeks of 2012. Last week , rates took a step in that direction. The yield on the 10-year bond, a benchmark for other …

President Obama’s recent claim to homeowners, that refinancing their mortgage loans at a lower rate, equates to a tax cut, doesn’t ring true for many tax experts.

Obama said at a recent press conference that the housing plan his administration had launched, had “already contributed to a spike in the number of homeowners who are refinancing their mortgages, which is the equivalent of another tax cut. The main message we want to send today is that there are 7 to 9 million people across the country who right now could be taking advantage of lower mortgage rates and that is money in their pocket”.

What Obama failed to mention however is that unlike the housing boom that led to the current financial crisis, this time, only borrowers with strong credit ratings and stable jobs will be able to save money if they refinance.

Obama’s announcement caused many tax analysts, including Gil Charney, who is an analyst for The Tax Institute at H&R Block to shout “foul”;

“While there could be overall savings by refinancing and lower monthly payments, there also could be reduced tax benefits as less interest is paid. Also refinancing could extend the period before the mortgage is fully paid off, so this might not be desirable for someone who wants to be mortgage-free. Therefore, someone about to make a financial decision should take their complete financial picture into account, not just their tax situation”.

In fairness to Obama, some analysts like Mark Steber, who is vice president of tax resources at Jackson Hewitt Tax Service did express a more supportive viewpoint, “While generally there is no tax advantage to refinancing at a lower rate, an individual can save on the total out of pocket costs each year over the life of the loan. Though a tax bill will actually increase after refinancing, the increase in taxes may be less than half of the total difference in interest paid, so the taxpayer may save more money than their taxes increase, therefore resulting in net savings”.