Obama Budget Based on Hope

Tuesday, February 02, 2010

Obama has now made me understand what the hope is all about. I'm not sure his budget proposal is anything but a unbelievable hope for the future. Obama unveiled a $3.8 trillion budget proposal that needs $1.3 trillion of borrowed money in 2011. The plan will raise taxes on high income individuals and businesses to raise $970 billion and $400 billion, respectively. Now for the shocking part:
The White House budget proposal released Monday assumes the U.S. economy is heading for a six-year run of above-average economic growth with no sign of a worrisome spike in inflation or interest rates...

...It expects six consecutive years of strong growth ranging from 3.2 percent to 4.3 percent — well above what most economists consider the longer-term trend of around 2.6 percent.

The last time the economy saw a similar streak of strong growth was in the late 1990s, during the dot-com boom. Obama has said both that expansion and the housing-powered growth in the mid-2000s were bubble-driven, and he wants the next expansion phase to rest on sturdier pillars...

...The budget forecast reflects a 3.8 percent five-year average. (CNBC)
So raising taxes and overwhelming the loanable funds markets translate into above-average growth. Hope indeed, hope indeed.
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