The Obama administration recently released this budget document listing a series of recommendations for the super-committee. I won’t comment today about the specifics of the plan, but I’d like to draw your attention to the title: “Living Within Our Means and Investing in the Future: The President’s Plan for Economic Growth and Deficit Reduction.”
I understand that “living within our means” means different things for different people. Looking at the debt numbers alone, I know that the administration and I have very different definitions. Under this plan, debt help by the public will grow from $10.2 trillion this year to $17.7 trillion in 2021 (see chart below). Even under extremely rosy assumptions about the projected growth of our GDP, debt grows from 68.6 percent to 73 percent.
Now, the second part of the title says “investing in our future,” which means growing government spending. So it could be that there are savings in that plan, but there is so much more investment that the debt grows, that the plan can only timidly slowdown the rate of debt accumulation. Unfortunately, a look at the details of the plan tells me that this is not the case. Either way, I think that this is not really a good title for this plan.