Wednesday, November 25, 2009

Obama Shatters Spending Record for First-Year Presidents

The federal government spent $3.5 trillion during President Obama's first year in office. This far exceeds the spending for any other first-year president.

President Obama has shattered the budget record for first-year presidents -- spending nearly double what his predecessor did when he came into office and far exceeding the first-year tabs for any other U.S. president in history.

In fiscal 2009 the federal government spent $3.52 trillion -- $2.8 trillion in 2000 dollars, which sets a benchmark for comparison. That fiscal year covered the last three-and-a-half months of George W. Bush's term and the first eight-and-a-half months of Obama's.

That price tag came with a $1.4 trillion deficit, nearly $1 trillion more than last year. The overall budget was about a half-trillion more than Bush's for 2008, his final full fiscal year in office.

That's a big increase. But compared with other presidents' first years in office, Obama is running circles around them.

Bush spent $1.8 trillion in 2001, according to government budget figures that have been adjusted for inflation based on 2000 dollars. Using the same formula, former President Bill Clinton spent $1.6 trillion in 1993.

The last president to clock in under $1 trillion was Gerald Ford, who logged a $982 billion budget in 1975. Post-war Dwight Eisenhower even brought Uncle Sam's tab down to $556 billion in his first year, 1953.

Obama's first-year budget, adjusted for inflation, is about five times that. His 2009 budget is also close to 21 percent of that for Clinton's eight years in office -- Clinton's spending added up to $13.5 trillion over his two full terms. Bush spent $16.8 trillion from 2001-2008.'s Elizabeth MacDonald describe what the interest on the debt can buy:

What Interest on the US Debt Would Buy
The New York Times ran with this front-page story this week:

“With the national debt now topping $12 trillion, the White House estimates that the government’s tab for servicing the debt will exceed $700 billion a year in 2019, up from $202 billion this year, even if annual budget deficits shrink drastically. Other forecasters say the figure could be much higher.”

The problem: The Times understated the annual interest by more than $180 billion.

For fiscal year 2009 federal government paid $202 billion in interest on the public debt.

But that figure doesn’t include interest paid on intragovernmental holdings, primarily composed of Treasury securities held by the Medicare trust fund and Social Security trust fund.

Total interest on the debt that includes intragovernmental holdings is $383.3 billion, says Fox News analyst James Farrell. That equates to the gross domestic product of Malaysia or Belgium.

Breakdown of Total Debt

Debt held by the public $7.6 trillion
Intragovernmental holdings $4.4 trillion
Total public debt outstanding $12 trillion

Sources: Treasury Dept.; DOT Budget Climbs to $73.3 Billion for 2010; CBO Monthly Budget Reports; CBO'S Budget and Economic Outlook: An Update

What Interest on the Federal Debt Will Get You

The $380 billion total in interest paid annually on the federal debt is equal to the size of Norway's sovereign wealth fund, one of the largest in the world.

It's the amount estimated to be the value of all Internet content as of 2007, the latest data available from web reasearchers Outsell Inc. The $380 billion equals the amount the US government spent on its computers and data systems in fiscal 2005.

It's 49% more than the estimated cost for Japan's last stimulus package in December 2008, and it's what Nigeria has lost to theft and waste in the last 46 years.

The total $383 billion in interest on the federal debt would pay for slightly more than half of the Defense Department’s budget ($674.7 billion in FY2008). It would pay for just shy of half the annual budgets of Treasury ($751.2 billion) and Health and Human Services ($721.7 billion).

The $383 billion would cover the budget for the Dept. of Energy about 15 times over, Farrell notes.

And how many government agency budgets could you pay for with $383 billion?

The $383 billion would pay for all on-budget costs for the following 18 government agencies (FY 2008), with about $12 billion in change left over, Farrell says. The total $383 billion would cover the combined budgets for Commerce, EPA, Homeland Security, Housing and Urban Development, and the budgets for the entire Judiciary and Legislative branches:

Agency FY 2008 on-budget
Executive Office of the President $289 M
General Services Administration $340 M
Small Business Administration $1.3 B
Legislative Branch $4.5 B
National Science Foundation $6.3 B
The Judiciary $6.5 B
Environmental Protection Agency $7.4 B
Corps of Engineers $9.1 B
Commerce $9.6 B
Interior $10.6 B
National Aeronautics and Space Administration $17.2 B
Energy $22.7 B
State $23.1 B
Justice $26.4 B
Homeland Security $50.6 B
Housing and Urban Development $50.9 B
Labor $57.9 B
Education $65.4 B
TOTAL: $370.2 B

And $383 billion would cover all federal government expenditures on the following areas (with about $13 billion left over):

Category FY 2008 expenditures
Natural resources & the environment $37.2 B
Agriculture $17.5 B
Transportation $81.5 B
Education $91.5 B
Veteran benefits & services $88.3 B
Administration of justice (law enforce. & courts) $49.1 B
TOTAL: $369.9 B

Sources: Office of Management & Budget, Mid-Session Review, Historical Tables, Budget of the U.S. Government, Fiscal Year 2010

So with these figures in mind, and knowing the US government won't balance the budget for the next ten years--ask yourself this: What foreign government would even want to buy our debt?

1 comment:

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