Justin Fung a.k.a. gershom's journal

The Obama Budget 2011

Jim Wallis says that budgets are moral documents, and that how we spend our money shows what our values are. Introduced today, President Obama's $3.83 trillion budget treads a delicate balance between trying to get the economy going again and trying to bring down the massive inherited budget deficit.*

Anyway, the budget for FY 2011 is fairly pessimistic one in that it presumes a gloomier economic outlook for the near future and budgets more for wars in Iraq and Afghanistan. Moreover, it actually expands the deficit in the short-term in order to bring it down in the long-term. As David Rogers at POLITICO writes,

In fact, it’s not until 2014 and 2015— when Obama hopes to be in his second term— that he has any hope of deficits approaching a sustainable level. Even then he is banking heavily on a new bipartisan fiscal commission to really finish the job.

It shouldn't need to be said (but it clearly does) that comprehensive reform of the health care system--not just piecemeal and insubstantial legislative change--would help curb exploding costs. Tom Friedman reports from Davos that we're making the rest of world a little nervous, due to the state of our economy, the political logjam in which we find ourselves, and notably the fact that we still can't push through something as remedial as curative as health care reform.

And while we're at it, reforming the financial system would help create a more stable and sound economy, less blown by the winds of bubbles and busts. Paul Volcker, chairman of the President's Economic Advisory Board, says:

I’ve been there — as regulator, as central banker, as commercial bank official and director — for almost 60 years. I have observed how memories dim. Individuals change. Institutional and political pressures to “lay off” tough regulation will remain — most notably in the fair weather that inevitably precedes the storm.

The implication is clear. We need to face up to needed structural changes, and place them into law. To do less will simply mean ultimate failure — failure to accept responsibility for learning from the lessons of the past and anticipating the needs of the future.

* The NY Times evaluates the history of our country's red ink, concluding that "President Obama’s agenda, ambitious as it may be, is responsible for only a sliver of the deficits, despite what many of his Republican critics are saying."