Raising 4.3 trillion US dollars: What Obama isn’t telling America about his “tax cuts”…

It all sounds so good…. 95% of Americans getting tax cuts. Tho even the most shallow of thinkers have to wonder how this can be when the non-partisan Tax Policy Center notes that 38% of Americans have no tax debt at all.

But let’s leave the most simple of mathematical errors behind. After all, it’s the “intent” that matters, yes? And while Obama’s perceived American utopia may be admirable in that intent, he seems a bit old to still indulge in such fantasy.

And the numbers indicate Obama’s promises are fantasy indeed. The headline that says it all, bringing reality home, is Alan Reynolds opinion piece in the WSJ today… How’s Obama Going to Raise $4.3 Trillion?

gasp…. and we thought the bail out was bad??

You see, it’s not just about Obama’s “95% of American’s getting tax cuts”. He’s got other spending plans for the nation. And they aren’t going to come for the price of a flashed, charismatic smile, or a set of rented Greek columns.

The new president, whoever he is, will start out facing a budget deficit of at least $1 trillion, possibly much more. Sen. Obama has nonetheless promised to devote another $1.32 trillion over the next 10 years to several new or expanded refundable tax credits and a special exemption for seniors, according to the Urban Institute and Brookings Institution’s Tax Policy Center (TPC). He calls this a “middle-class tax cut,” while suggesting the middle class includes 95% of those who work.

[Mata Musing: so *that’s* how he gets from here to there on the 95%]

Mr. Obama’s proposed income-based health-insurance subsidies, tax credits for tiny businesses, and expanded Medicaid eligibility would cost another $1.63 trillion, according to the TPC. Thus his tax rebates and health insurance subsidies alone would lift the undisclosed bill to future taxpayers by $2.95 trillion — roughly $295 billion a year by 2012.

But that’s not all. Mr. Obama has also promised to spend more on 176 other programs, according to an 85-page list of campaign promises (actual quotations) compiled by the National Taxpayers Union Foundation. The NTUF was able to produce cost estimates for only 77 of the 176, so its estimate is low. Excluding the Obama health plan, the NTUF estimates that Mr. Obama would raise spending by $611.5 billion over the next five years; the 10-year total (aside from health) would surely exceed $1.4 trillion, because spending typically grows at least as quickly as nominal GDP.

A trillion here, a trillion there, and pretty soon you’re talking about real money. Altogether, Mr. Obama is promising at least $4.3 trillion of increased spending and reduced tax revenue from 2009 to 2018 — roughly an extra $430 billion a year by 2012-2013.

Let me repeat that in numbers…. Obama proposes adding to the American taxpayers shoulders, an approximate:

Let me put all those zeros into perspective for you. This is, assuming the cost of $5 bil a month in Iraq, the equivalent of 71.6 years of an Iraqi war.

Or, for you fashionistas, if the GOP bought Sarah Palin $150K worth of clothes monthly, Sarah and family would be set in Armani style for 2.3 million years.

Prefer to think in oil? This figure translates to 28.66 billion barrels of oil priced at $150 per brl. That’s enough to cover US current needs of 7.6 billion barrels annually (365 x 21 million daily) for almost four years of the “greatest transfer of American wealth”. Seven years if oil is at $80 per brl.

And that’s on top of buying the oil we need in the interim….

Now… have we got a grip on the total spending figure yet?

There is no doubt the eyes glaze over with the amount of zeros, and it’s easier to bring it down to something tangible for the mind to absorb. And BTW… these zeros got to me during this too. So if any of you back check me and find I’ve got a decimal place in the wrong spot… feel free to let me know.

So where is Obama planning on getting that estimated $4.3 trillion? If we go to the portion of his economic plan most Americans… i.e. Joe the plumber… are familiar with, Obama’s tax increase “on the wealthy” who *gross* $250K or more will only raise perhaps $30 to $35 billion over the next four years from his tax rates on salaries, dividends and capital gains. And that’s assuming the economy is decent. Quite a hefty price to pay for Joe the Plumber types in exchange for so little dent in the overall bill, eh?

Okay… giving him the benefit of the doubt, only $4.265 trillion more to go… Wait… let me put that into perspective too.

But then, Obama’s told us he’s no dummy. And I’ll give him that. Dishonest and secretative, yes. Dumb? Nope. He’s promised the US taxpayer he’ll find that cash for all his socialist/welfare government programs by closing loopholes and tax havens for corporations.

That comment refers to $924.1 billion over 10 years [Mata Note: or $9.24 trillion for that period] from what the TPC wisely labels “unverifiable revenue raisers.” To put that huge figure in perspective, the Congressional Budget Office optimistically expects a total of $3.7 trillion from corporate taxes over that period.

[Mata note: or $5.54 trillion shy]

In other words, Mr. Obama is counting on increasing corporate tax collections by more than 25% simply by closing “loopholes” and complaining about foreign “tax havens.”

Nobody, including the Tax Policy Center, believes that is remotely feasible. And Mr. Obama’s dream of squeezing more revenue out of corporate profits, dividends and capital gains looks increasingly unbelievable now that profits are falling, banks have cut or eliminated dividends, and only a few short-sellers have any capital gains left to tax.

In short, Obama’s already faulty math depends upon a national and global economy that does not exist.

So what about Obama’s promise to take a precision “scalpel” and cut spending, as he promised to Bob Schieffer in the final Presidential debate?

Mr. Schieffer said “The nonpartisan Committee for a Responsible Federal Budget (CFARB) ran the numbers” and found otherwise.

When CFARB “ran the numbers,” they relied almost entirely on unverifiable numbers eagerly provided to them by the Obama campaign. That explains why their list of Mr. Obama’s new spending plans is so much shorter than the National Taxpayers Union fully documented list.

But nothing quite explains why even the vaguest promises to save money are recorded by CFARB as if they had substance.

Mr. Obama is thus credited with saving $50 billion in a single year (2013) by reducing “wasteful spending” and unnamed “obsolete programs.” He is said to save Medicare $43 billion a year by importing foreign drugs and negotiating bargains from drug companies. Yet even proponents of that approach such as the Lewin Group find that cannot save more than $6 billion a year. So the remaining $37 billion turns out to depend on what the Obama campaign refers to as undertaking “additional measures as necessary” (more taxes?).

The number of U.S. troops in Iraq will decline, regardless of who the next president is. Yet the CFARB credits John McCain’s budget with only a $5 billion savings from troop reduction in Iraq, while Mr. Obama gets an extra $55 billion. .

[Mata note: this does not apparently take into account Obama’s promise to send troops to Afghanistan…]

First thought? Obama better ask McCain to borrow his economic “hatchet”. Second thought? Obviously lots of zeros in Obama’s math is not his forte…

Giving Obama all the benefit of the doubt, yet again, he’s now looking for a spare $75 billion by 2013 to meet his “closing loopholes and tax havens” goal. Which then brings us to his “draconian” cap and trade trading scheme. Or, in plain language the government sales of rights to pollute… er… emit carbon dioxide.

But the cap and trade hits Joe the plumber and main street right where they live.

The effect on U.S. families and firms would be like a steep tax on electricity, gasoline and energy-intensive products such as paper, plastic and aluminum. Whenever Mr. Obama claims he has not (yet) proposed any tax increase on couples earning less than $250,000, he forgets to mention his de facto $100 billion annual tax on energy. (The McCain-Lieberman cap-and-trade plan is more gradual and much less costly.)

CFARB assumes Mr. Obama’s cap-and-trade tax would raise $100 billion in 2013 alone, but the actual revenue raised would be much lower. Like every other steep surge in energy costs, the Obama cap-and-trade tax would crush the economy, reducing tax receipts from profits and personal income.

So what’s the bottom line on us… the “scam’ees”, so to speak, with all this political double speak and hidden costs? Not a clue in actual numbers… But remember this… Obama’s tax rebates benefit the bottom 60% of taxpayers… the same who were only responsible for 1% of the federal tax revenue in 2006. The 3.3% with incomes above $200,000 paid more than 58% of the tax revenue. The remaining percentile? They’ll be getting annual gov’t checks in the form of tax credit rebates.

There is no possible way Obama’s plans can be financed by shifting a larger tax burder to the top 3.3%.

If this doesn’t scare you… pocket this… That doesn’t even include his health care plans, “the doubling of foreign aid, or any of the other 175 programs he’s promised to expand.”

In the meantime, Obama… who’s spent [corrected… sorry, was pooped!] $391.313 mil already on his campaign per Open Secrets records as of Oct 17th, 2008… is apparently running low on funds. He and wife, Michelle, are out there stumping for yet more of your dollars. And he’s not even in office yet to blow the rest of the nation’s wad.

Obama and his wife, Michelle, issued e-mail fundraising appeals on Thursday. The candidate warned supporters that “the margins of victory in crucial battleground states will be small.”

Added his wife: “It all comes down to Friday morning when we make the last, tough choices about where we can fight – and how hard.”

Then again, he’s got one expensive party planned in Chicago that will be costing the city over $2 million alone…. a pretty penny that the candidate promises the campaign… or would that be his donors?… will pick up the tab.

No word yet on the cost of the set and rest of the party… but fear not. Obama’s campaign is financially digging at the media for everything from choice camera spots to radio positions to cover costs. If you’re one of those indie media, and not one of the big budget types with “tingling” legs, rest assured there are some free general media slots available. Suggest you bring hankerchiefs as they are apt to be in the “nosebleed” section.

Needless to say, the media is a bit disgruntled, wondering why a campaign that raised $150 mil in Sept is demanding such payments. Obama, ever the trend setter making history, is doing something candidates have rarely done before… charging for coverage.

So all you Obama supporters out there? You’d better dig even deeper to keep your favorite couple partying in the style to which they’ve become accustomed. And who knows if there will be a charge at the gate, or perhaps a coin operated port-a-potty a’waiting you.

You can view Obama’s total campaign summary, and disclosures, at the FEC site. He has disclosed almost $477 mil in individual donations, with approx $200 mil apparently foggy in origin.

By comparison, here’s Open Secrets record for John Mcain’s campaign, totalling $214.89 million.

Obama’s paid out an exorbitant amount of the faithful’s hard earned cash… all only to be a few points ahead in the final weeks against an ol’ white dude, nicknamed “George Bush”. Anyone questioning his budget management like I am??

Well…. if the figures are right… get used to the tons of zeros masked by a smooth baritone, and a “calm, steady hand” picking your pockets. Because an Obama Presidency will be historic, alright. It will not only be the most expensive in history, but it just may shatter the American piggy bank… what’s left of it, anyway.