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Obama’s Spending Spreeze

January 26, 2010

The spending freeze which Obama is said to propose in his State of the Union Address is a gimmick, of course. It won’t have a significant impact on national debt and it does nothing whatsoever to improve efficiency of spending. Having said that, the French Cowboy thinks that such a move is still better than nothing. But the freeze must be followed by serious reshaping – and downsizing! – of federal spending. If not, I’m not sure whether the comparatively meagre savings will be worth the huge potential for pro-Obama spin the spending freeze delivers. Because once the freeze – however effectively – will be set into place, we’ll be hearing that this decision saved the American economy and probably at least 1.5 million jobs every time the question about the unsustainable national debt will be brought up. Although I doubt that many people will be impressed by it, it will surely be used as an all-purpose shield for Obama against all things government debt and deficit.

The French Cowboy can hear the President already: “To reign in the reckless spending I have inherited from the former administration, I have called out a historic spending freeze. With this unprecedented move I have shown real leadership, and the willingness and the ability to make the tough choices when Republicans and the rest of the truck-driving bunch shrank back. So I give myself a good, solid A-minus. The minus, because I thought that if I just focus on the spending freeze, Americans would get it. Turns out they didn’t. So in the future, I will explain myself better. Because I’d rather be a narcissistic and ignorant one-term president, than a two-term president who actually does what Americans want.”

Apart from the fact that only a very small portion of the federal budget would actually be affected, Ed Morrisey gives an interesting angle on how gimmicky the freeze gimmick really is:

Let’s also have a little history lesson.  When George W. Bush and a Republican Congress issued their final budget, FY2007, the federal government spent $2.72 trillion.  Democrats took control of Congress and issued their own budget for FY2008 and negotiated it with Bush for his signature, spending $2.98 trillion.  Democrats didn’t bother to negotiate the FY09 budget with Bush, instead issuing continuing resolutions for spending and delivering a final budget of over $3.1 trillion.

The FY 2010 budget represents an increase over that ‘09 budget of more than the amount that Obama proposes to freeze, and the frozen portion amounts to less than half of what the Democrats have added to the federal budget since taking over Congress. That’s not fiscal discipline — it’s simply spending exhaustion.

When there is a structural problem in your expenses, an indiscriminating temporary cut in a small area is not going to solve it. But in a desperate situation it’s like a partial emergency brake and might create some breathing room to take up the task of actually changing course. So let’s see whether the spending freeze is heralding genuine reform of fiscal spending or whether the Obama administration only created it to serve as a tactical distraction.

In any case, the French Cowboy hopes that Democrats acknowledge that last year’s row of gargantuan, wasteful and unpopular spending decisions have exacerbated the situation they’re now allegedly determined to save. But with Obama’s decision to continue doling out money in the name of his so-called stimulus package, I have my doubts.

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