We will find out more on Tuesday night. However, we learned this over the weekend:
"President Obama is putting the finishing touches on an ambitious first budget that seeks to cut the federal deficit in half over the next four years, primarily by raising taxes on businesses and the wealthy and by slashing spending on the wars in Iraq and Afghanistan, administration officials said." (WashPost)
The article goes on:
".....White House budget director Peter Orszag:
"We will cut the deficit in half by the end of the president's first term."
The plan would keep the deficit hovering near $1 trillion in 2010 and 2011, but shows it dropping to $533 billion by 2013, he said -- still high but a more manageable 3 percent of the economy."
So a deficit of 3% of GDP is more "manageable"?
Do they mean like the Bush "3% of GDP" deficits that they used to tell us about?
Of course, Pres BO will learn some painful lessons:
1) You won't even touch the deficits by ending the wars in Iraq or Afghanistan. The total costs is US$ 190 billion, or less than 1% of GDP!
On the other hand, you may turn over Afghanistan to the Taleban or Al Qaeda.
You could also have a collapse of the gains in Iraq.
We recall what happened when the last time we let the Taleban run crazy in Afghanistan.
Can we say 9-11?
Can you say two US embassies blown up in Africa?
Can you say the USS Cole?
2) Raising taxes does not work. How many times do we have to learn that lesson? High taxes discourages investment and job creation!
Just ask Michigan and California.
P.S. In the meantime, it did not get any better on Monday: Major stock market indexes fall to 1997 levels!
