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[[File:Varvel-11-19-09.jpg|thumb|330px|left|Gary Varvel pokes fun at VP Biden's outlandish claims]]

[[File:Varvel-11-19-09.jpg|thumb|330px|left|Gary Varvel pokes fun at VP Biden's outlandish claims]]

===Historical backdrop===

===Historical backdrop===

Following the [[Recession of 2008]] Obama declared failure to pass his [[Economic stimulus]]  would turn a "crisis into a catastrophe," and promised [[Unemployment]] would not rise above 7.8%.<ref>[http://www.time.com/time/business/article/0,8599,1910208,00.html Obama's Stimulus Plan: Failing by Its Own Measure,]  Stephen Gandel, ''TIME'',  July 14, 2009.</ref><ref>[http://www.msnbc.msn.com/id/31165217/ Obama promises economic relief this summer], AP, 6/8/2009.</ref> The House on Jan. 28 passed a stimulus package‎ of $819 billion in new spending and tax increases, despite unanimous Republican opposition. A revised bill passed the Senate with three Republican votes. A compromise bill known as the "[[American Recovery and Reinvestment Act of 2009]]" was passed, providing for $789 billion in new spending.  

Following the [[Recession of 2008]] Obama declared that failure to pass his [[Economic stimulus]]  would turn a "crisis into a catastrophe," and promised [[Unemployment]] would not rise above 7.8%.<ref>[http://www.time.com/time/business/article/0,8599,1910208,00.html Obama's Stimulus Plan: Failing by Its Own Measure,]  Stephen Gandel, ''TIME'',  July 14, 2009.</ref><ref>[http://www.msnbc.msn.com/id/31165217/ Obama promises economic relief this summer], AP, 6/8/2009.</ref> The House on Jan. 28 passed a stimulus package‎ of $819 billion in new spending and tax increases, despite unanimous Republican opposition. A revised bill passed the Senate with three Republican votes. A compromise bill known as the "[[American Recovery and Reinvestment Act of 2009]]" was passed, providing for $789 billion in new spending and stimulus.

Detroit spread gloom on Feb. 17 as GM starkly warned of impending bankruptcy unless it gets more aid. By August, both Chrysler and GM had entered bankruptcy, and come out again in much smaller size, as they closed a fourth of their dealerships, slashed wage rates, and paid off bondholders with 29 cents on the dollar.  Chrysler was given away free to Fiat of Italy, which acquired ownership without investing any money. Meanwhile the parts makers, which employ more workers than the Big Three automakers, verged on disaster and begged for federal billions.  The "[[cash for clunkers]]" proved to be a temporary stopgap, bringing people back to deserted dealerships at a cost of $3 billion.

Detroit spread gloom on Feb. 17 as GM starkly warned of impending bankruptcy unless it gets more aid. By August, both Chrysler and GM had entered bankruptcy, and come out again in much smaller size, as they closed a fourth of their dealerships, slashed wage rates, and repaid creditors with 29 cents on the dollar.  The government gave Chrysler away free to Fiat of Italy, which acquired ownership without investing any money. Meanwhile the part makers, which employ more workers than the Big Three automakers, verged on disaster and begged for billions.  The "[[cash for clunkers]]" proved to be a boondoogle for the rich at a cost of $3 billion to the Treasury.

===2010 Budget===

===2010 Budget===

Congress by party line votes in late April passed the  budget Obama had proposed in late February. It calls for $3.4 trillion in new spending, not counting the $787 billion in stimulus spending approved in February, nor the trillions in loan guarantees to banks.  The new budget allocates $1.2 trillion for defense, and an additional $130 billion for the wars in Afghanistan and Iraq. Nondefense spending will increase by 8% or $40 billion. The budget will allow the Obama health plan--which has not been written--to move through Congress on a fast track without risk of filibuster. The Bush tax cuts are extended, and some new cuts added for lower income Americans.  However the federal income tax on individuals over $200,000 will rise from 35% to 39.6%. 

The Democratic contorlled Congress by a party line vote in late April passed the  budget Obama proposed in late February. It called for $3.4 trillion in new spending, not counting the $787 billion in stimulus spending approved in February, nor the trillions in loan guarantees to banks.  The 2010 budget allocated $1.2 trillion for defense, and an additional $130 billion for the wars in Afghanistan and Iraq. Nondefense spending increased by 8% or $40 billion. The budget allowed the Obama health plan, which had not yet been written, to move through Congress on a fast track with no risk of filibuster.  

The Tax Foundation says that 44% of all tax filers will have no tax liability and most of those will get a check from the government, especially from the Earned Income Tax Credit (EITC)<ref> EITC is a conservative idea first proposed by Milton Friedman, enacted under Republican presidents Ford and Reagan.</ref> and credits for college tuition and child care. The ''Wall Street Journal'' noted about Obama's plan that, "Once upon a time we called this 'welfare'". <ref>http://online.wsj.com/article/SB122385651698727257.html</ref>

The Tax Foundation says that 44% of all tax filers have no tax liability and most of those will get a check from the government, especially from the Earned Income Tax Credit (EITC)<ref> EITC is a conservative idea first proposed by Milton Friedman, enacted under Republican presidents Ford and Reagan.</ref> and credits for college tuition and child care. The ''Wall Street Journal'' noted about Obama's plan that, "Once upon a time we called this 'welfare'". <ref>http://online.wsj.com/article/SB122385651698727257.html</ref>

The Budget assumes a federal deficit of $1.75 trillion for 2009, or 12.3% of GDP--the highest deficit in percentage terms since World War II. By 2013, the hypothetical deficit will drop to $533 billion but then will begin to climb again. The budget includes an additional $250 billion for more rescues of the financial markets by purchasing toxic assets on the banking sector's books.

The Budget assumes a federal deficit of $1.75 trillion for 2009, or 12.3% of GDP--the highest deficit in percentage terms since World War II. The budget reordered priorities to provide national health care and raise the federal spending on schools.  

The budget reorders national priorities to provide national health care and raise the federal spending on schools.  

[[Image:Budget-cbo.jpg|thumb|250px|left]] The Congressional Budget Office (CBO) estimates the Obama plans will raise the national debt far more than Obama admitted. The CBO says the Obama plan will cause total deficits over the next ten years of $9.3 trillion, compared to Obama's estimate of "only" 7 trillion.  The annual GDP by contrast is about $15 trillion.<ref> Jackie Calmes, "New Deficit Forecast Casts Shadow on Obama Agenda," [http://www.nytimes.com/2009/03/21/washington/21deficit.html?th&emc=th ''New York Times'' Mar. 20, 2009]</ref> Senator Jedd Gregg says that Obama's budget will double the national debt in five years and triple it in ten. <ref>http://www.politifact.com/truth-o-meter/statements/2009/mar/25/judd-gregg/judd-gregg-says-obamas-budget-doubles-national-deb/</ref>

[[Image:Budget-cbo.jpg|thumb|250px|left]] The Congressional Budget Office (CBO) estimates the Obama plans will raise the national debt far more than Obama says. The CBO says the Obama plan will cause total deficits over the next ten years of $9.3 trillion, compared to Obama's estimate of "only" 7 trillion. That is in addition to the current national debt of $11.2 trillion and rising. The annual GDP by contrast is about $15 trillion and falling.<ref> Jackie Calmes, "New Deficit Forecast Casts Shadow on Obama Agenda," [http://www.nytimes.com/2009/03/21/washington/21deficit.html?th&emc=th ''New York Times'' Mar. 20, 2009]</ref> Senator Jedd Gregg says that Obama's budget will double the national debt in five years and triple it in ten. <ref>http://www.politifact.com/truth-o-meter/statements/2009/mar/25/judd-gregg/judd-gregg-says-obamas-budget-doubles-national-deb/</ref>

Obama proposed a carbon [[cap and trade]] system, increasing taxes for families and businesses. The cost to energy consumers would be an additional $645 billion between 2012 and 2019, which will result in higher prices. Rep. John Boehner said, "Let's just be honest and call it a carbon tax that will increase taxes on all Americans who drive a car, who have a job, who turn on a light switch, pure and simple."<ref>see [http://online.wsj.com/article/SB123566843777484625.html comment from conservative newspaper]</ref>

The chairman of the Senate Budget Committee was conservative Democrat [[Kent Conrad]] of [[North Dakota]], a deficit hawk who said he was "very uncomfortable with the build-up of debt" and urged Obama to make good on his promise to overhaul federal retirement and health-care programs. Conrad called for "more discipline on the spending side."<ref> [http://www.washingtonpost.com/wp-dyn/content/article/2009/02/28/AR2009022801960.html?hpid=topnews ''Washington Post'' Mar. 1, 2009]</ref>

 

The chairman of the Senate Budget Committee is conservative Democrat [[Kent Conrad]] of [[North Dakota]], a deficit hawk who said he is "very uncomfortable with the build-up of debt" and urged Obama to make good on his promise to overhaul federal retirement and health-care programs. Conrad called for "more discipline on the spending side."<ref> [http://www.washingtonpost.com/wp-dyn/content/article/2009/02/28/AR2009022801960.html?hpid=topnews ''Washington Post'' Mar. 1, 2009]</ref>

===Optimism or Pessimism?===

===Optimism or Pessimism?===