Obama’s Hockey Stick


“I say after eight years of this Administration we have just as much unemployment as when we started. … and an enormous debt to boot.”

These were the words of Treasury Secretary Henry Morgenthau spoken to Congress in May, 1939. Exasperated after experiencing massive unemployment for 10 years and spending heavily year after year to try to end it, Morgenthau was a beaten man. He was admitting that massive government spending and make-work projects had failed to revive the American economy. Over that period, unemployment had peaked at 25%, never went below 14%, and was 20% again when those words were spoken.

Now we have an administration in office that is mimicking the acts of the Roosevelt years with unprecedented borrowing and spending in their attempt to revive the economy. No less than Vice President Joe Biden recently stated: “We have to go spend money to keep from going bankrupt.” These people refuse to acknowledge history.

Below is a graph which I call “Obama’s Hockey Stick”. The environmental “hockey stick graph” has been discredited, but this one is frighteningly real. It shows that the US Budget Deficit has gone over a cliff; the deficit quadrupling between 2008 & 2009.

The next graph is projected future deficits based on present government budget plans. One estimate is from the Obama Administration, the other from the Congressional Budget Office (CBO):

The plunge in 2009 (which added $6,065 of debt for every living American) appears to begin to recede in 2010 and after until retracing back deeper starting in 2013. Note that the White House projections are far more optimistic than CBO. Who are we to believe; an administration attempting to cling to power, or a non-partisan budget watchdog? No matter which is right, the scenario is dire.

Based on 1933-41 experience, the above projected deficits appear a recipe for disaster. Government borrowing sucks available capital out of the system starving business of loans to expand and hire. Interest rates will rise choking off recovery of the housing market. Taxes will be raised to pay both the debt and interest; draining vital earnings of firms and individuals for decades to come.

Deficit spending does not create recovery; it only buys votes today with the fruits of future labor. Our government is selling our children’s future down a rat hole. Next time you see a baby, think seriously about apologizing in advance.

Here is a cute one that has been around a while about the TARP bailout:

Advertisements

2 responses to this post.

  1. Posted by RK on May 24, 2010 at 7:48 pm

    The “Obama Hockey Stick” shows the Bush FY2009 budget.

    Reply

    • Hi RK: I admire your perserverance and support.
      You must observe the future – remember? ’09 was last year and the last of Bush’s fingerprints have now been wiped clean. Take a peek at ’10 +, which Bush had nothing to do with. You should also remember that history is known to repeat itself when those who ignore it are in charge. Spend a few minutes with “Curing Recession”: https://oldiron2020.wordpress.com/2010/04/15/curing-recession/

      And get back to me.

      OIJ

      Reply

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: