Obama’s budget proposal

Washington Compost

The headline above is real, and it says “new spending” so that right-wingers will squawk about a (false) “increase” of $4.15 trillion in spending. In reality this is simply what Obama proposes that the U.S. government should create (out of thin air) for all of Fiscal Year 2017, which runs from 1 Oct 2016 to 30 Sep 2017.

$4.15 trillion is normal. During FY 2016 the U.S. government will claw back all but a tiny fraction of that $4.15 billion as taxes.

Let me return to this topic (Obama’s budget proposal) in a minute.

Just now I was remembering that news story from November 2015 in which an anonymous donor supposedly gave $2.2 million to the U.S. Treasury Department to “pay down the national debt.” Specifically the check was written to the Bureau of the Fiscal Service (which until 7 Oct 2012 was known as the Bureau of the Public Debt).

The Bureau of the Fiscal Service will not reveal who this “donor” was, but the check was obviously a tax write-off, since gifts to “pay down the national debt” are tax deductible. (Which shows once again that the U.S. government has no need or use for tax revenues.) You write a check for $2.2 million so you can claim a $5 million tax credit.

Of course, the idea of “paying down the national debt” is absurd to begin with. Hence the satire in the initial image above (right side).

men 01men 02men 03men 04men 05

The Bureau of the Fiscal Service says that various people donated a total of $3.9 million to “reduce the national debt” in 2015. (Here’s a list.) To “pay off” the national debt, you would need 8.2 million such checks, each worth $3.9 million.

Actually this trick is a popular tax dodge among some Congressmen. During the first half of 2015, five Republicans and three Democrats gave a combined $55,739 to “pay off the national debt” (and get a tax write-off equaling three or four times that ). 🙂

Some Congressmen, however, are simply idiots. Rep. Chris Gibson (R-NY) attained the US Army rank of colonel (colonel!) and now gets a pension check of $4,357.37 each month, which he donates to “pay down the national debt.” The U.S. government creates that $4,357.37 out of thin air, and gives it to Gibson, who gives it back to the government, not knowing that the money is simply destroyed. What silliness.

USA Today admits this, sort of, but spins its own lies:

Because the Treasury is running monthly deficits, the contributions don’t really go to pay off debt. Instead, they’re used to pay the expenses of the government instead of issuing new debt.

As though money is physical and limited.

Incidentally USA Today let something slip…

A little-known account called the Public Debt Reduction Fund receives tax-deductible contributions from the public to pay down the national debt.

Politicians refer to the “Social Security Trust Fund” or “National Highway Trust Fund” to make people falsely think that money is physical and limited like the water in a swimming pool…

money pool 01

But in using the words “account” and “fund” in the same sentence, USA Today shows that a “federal trust fund” is simply an account than can be credited or debited at will.

money pool 02money pool 03money pool 04

Anyway, regarding Obama’s budget proposal, the U.S. government’s fiscal year runs from 1 Oct to 30 Sep the following year. Thus, for the U.S. government, FY 2017 will begin on 1 Oct 2016. About half of the world’s nations’ fiscal years are the same as calendar years – i.e. their fiscal years run from 1 January to 31 December. The other nations are varied.

Early each calendar year the U.S. President proposes how many dollars shall be created out of thin air, to whom those dollars should be given to, and how many dollars should be taxed back.

Congress then spends the rest of the year debating and modifying the president’s proposal. This involves a lot of haggling between politicians (“I’ll approve dollars for your district or your pet project if you’ll approve dollars for mine”). There is bluffing, brinkmanship, threats, and compromises – i.e. a lot of horse trading.

congress in session

Generally, one spending bill is passed for each sub-committee of the twelve subcommittees in the U.S. House Committee on Appropriations. It is the same in the U.S. Senate, which has its own twelve subcommittees.

Each of the twenty-four subcommittees in Congress haggles all year with the amount of money they want to create out of thin air. They fool around because politicians want to give as much loot as they can to themselves and to their cronies, while maintaining the lie that the U.S. government is “broke.” Plus, there are always controversial laws that are snuck into a spending bill (e.g. cuts in federal funding for Planned Parenthood).

If Congress has not finished its internal haggling by 30 September (the end of the Fiscal Year) then Congress passes a succession of “emergency funding bills” and other stopgap measures. This has been the case every year for the past 22 years.

It sounds complex, but it’s just a bunch of highly-paid idiots arguing about how much money they shall create, and who gets it.

congress in session2

Then, a week or so before Christmas, usually in the pre-dawn hours, politicians award trillion-dollar gifts to themselves, to their friends, and to everyone they personally like. They do this by suddenly bundling all the money requests from all subcommittees into a single “omnibus spending bill,” which the President then signs on the same day. Then Congressmen instantly flee from Washington D.C. before anyone can ask questions.

vultures 01vultures 02

No politician actually reads the “omnibus spending bill,” since it typically stretches out to 3,000 pages when addendums are included. (The President’s budget proposal is usually less than 200 pages.)

Instead, each congressman (actually his staff) only reads the parts that affect how many dollars will come to (or be taken away from) his own district and his own pet projects.

spending bill

In addition to creating money, an “omnibus spending bill” is a convenient place to hide laws (i.e. “policy riders”) that politicians want. For example, each year Republicans try to sneak in legislation that will prevent individual states from imposing requirements for GMO food labeling. This year’s sneaky little Republican was Congressman Mike Pompeo from Kansas. Pompeo’s bill to outlaw safe and accurate food labeling was titled the “Safe and Accurate Food Labeling Act of 2015” (H.R. 1599).  It had 93 Republican co-sponsors, and it passed the House, but in the Senate it was struck from the “omnibus spending bill.”  Therefore Republicans haven’t (yet) gotten away with it. They will try again next year.

Vermont is the only state to pass legislation requiring GMO labeling, and it will go into effect until mid-2016. Vermont Senator Patrick Leahy was instrumental in getting the Republican measure stuck from the omnibus spending bill.

Each year when the President submits his budget proposal, everyone in Washington rushes to see how much money the White House proposes to give to them or take from them. Those whose budgets are always increased (e.g. the Pentagon) feel “vindicated.” Those whose budgets are decreased by one penny (or which are not increased by as much as they had hoped) scream that without a whopping increase the world will end.


For example, Ron Hickman, who is Sheriff of Harris County Texas (on the border with Mexico) gets a million federal dollars each year to round up refugees and throw them into jail. This is part of the State Criminal Alien Assistance Program (SCAAPP).

However Obama’s proposed budget for FY 2017 halts this flow of federal dollars. Ron Hickman is screaming. He says local taxpayers will have to foot the bill for jailing refugees. (Actually Hickman will just stop jailing refugees.)

Texas Governor Greg Abbot is also furious. Andy Louderback, Sheriff of Jackson county Texas, says, “This money is vital for handling the criminal aliens that are in our jails! Obama continues to do everything he can to gut the criminal alien system in the U.S., proving once again that the safety of U.S. citizens is not important!”


Obama’s proposal includes an added $19 billion (created out of thin air) for “cybersecurity funding.” That loot would be spread over a variety of agencies, including the Defense Department, the FBI, the Department of Veteran Affairs and the Office of Personnel Management.

Obama wants to cut $375 billion from Medicare, to push it toward privatization. He wants a $10-a-barrel oil tax to supposedly pay for “clean tech” infrastructure.

The Pentagon gets a raise every year, and FY 2017 will be no exception.  Obama’s proposed budget is $582.7 billion. This does not include funding for the endless wars, which is “off-budget.” In fact, since so much federal funding is classified and “off budget,” there is no way to know for sure how many dollars the U.S. government creates each year. We can only estimate. Billions are routinely stolen.

natnl seucrity

The Pentagon wants new precision-guided bombs plus a $55 billion Long Range Strike Bomber to attack U.S.-funded terrorist mercenaries (aka “ISIS™”).

Obama also proposes to give the State Dept. a raise to $50 billion to boost its regime change operations. Obama is also asking for $4.1 billion, up from $3.5 billion this year, to sustain his proxy war against Syria.


Obama proposes to cut NASA’s budget by $800 million.

outer space

All Republicans automatically blasted Obama’s budget proposal as “outrageous.” (Democrats do the same when a republican is in the White House.)

In the mean time, the Big Lie marches on.

Wisconsin Senator Ron John (Republican) says (quote):

 “The federal debt totaled $10.6 trillion when Obama took office.  Since then it has grown by $8.4 trillion. That means that the mountain of debt piled on our children and grandchildren has grown by about $37,600 for every second that Obama has been in office. That is immoral. But worse, the nonpartisan Congressional Budget Office projects that our current course will add $103 trillion to the total debt over the next 30 years — or more than $108,000 for every second of the next 30 years. It’s well past time to face the truth and stop this intergenerational theft.  We must not make future generations suffer for our inability to limit the size, scope, and cost of big government.”


Finally, down below in the comments section, let’s hear from one of our readers who is truly an expert analyst.



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11 Responses to Obama’s budget proposal

  1. Steve says:

    Abba Lerner slayed the so-called “debt burdens our children” argument decades ago:

    “A variant of the false analogy is the declaration that national debt puts an unfair burden on our children, who are thereby made to pay for our extravagances. Very few economists need to be reminded that if our children or grandchildren repay some of the national debt these payments will be made to our children or grandchildren and to nobody else. Taking them altogether they will no more be impoverished by making the repayments than they will be enriched by receiving them.” (Lerner 1948: 256).


  2. Chunch says:

    I bet not one of you does anything to help the poor, aside from giving a stinking dollar to help yourselves feel better.

    Again and again and again the question goes unanswered. Are the goods and services purchased with these “free dollars” also created out of thin air or di they require labor and investment, aka, NOT free?

    Do you know what fraud and counterfeiting is or do you ignore this so long as “its for the good of society”? I bet you are ok with fraud as long as it benefits you – its not a surprise to me that those on the left either have no clue why they vote for leftists, or have a clue and lie as long as it benefits them. The sad thing is that this nation embarked on a socialist project about 80 years ago and today we are much worst for it. Yet you and a few others that know the truth still want more.. And it will never be enough, your answer will be that the government just didnt do enough. Year after year the same story, and the more miserable you become while the wealthy, those like Rodger, bask in luxury and laugh at how stupid his followers are. He knows, that i guarante.

    Please stop beating the drum about the government being able to print whatever it wants – EVERYONE knows that. You dismiss the consequences because you think reserve status is a product of luck (completely wrong) and not a sign of stability. We dont chose reserve status, the MARKET does. Businesses could decide to use mexican pesos tomorrow and with this your theory.

    It is true that each head is its own world, keep thinking that its others that are on that pole – you may need to keep working double shifts a tad longer.


    • cool slim says:

      I’m not a leftist. The left-right argument is a false paradigm created by the elite to prevent people from thinking deeply about the world we live in.

      The goods and services purchased with money are created from the hard work and intellect of people. It is possible for there to be a shortage of resources, but it is not possible for there to be a shortage of money, unless this has been artificially induced by those who control the money supply, in the form of spending cuts or tax hikes.

      Reserve status is due by a mixture of military bellicosity and natural economic superiority. Ignoring the military side of things, demand for your currency in the foreign markets depends on how much foreigners want your currency. This is determined by what they can purchase for your currency, i.e. what you export.

      If a country is able to export high quality, in demand products, then it’s currency will also be in demand. Not only does America export high quality, in demand products, the American economy is the largest in the world, both in terms of annual GDP and total assets. This makes the market for US dollars liquid (can be bought and sold easily) and therefore convenient for investors.

      These are the reasons why foreign investors desire to save in US dollars. The government creating money out of thin air and injecting it into the economy does not negatively impact the fundamentals that have made the US dollar a reserve currency.

      On the contrary, it is ESSENTIAL that the government continually injects money into the economy in order to make up for the money that annually leaves the economy due to the trade deficit. The government needs to do this in order to meet the private sectors desire to save, and to promote full employment.

      I hope this explanation helps. By the way, I’m well aware of how the rich influences political discussion. It is entirely possible that Modern Monetary Theory may have been created by the rich as controlled opposition, just like the Libertarian/Austrian school of Economics.


      • Except for a couple of errors (e.g. “taxes drive money”), MMT simply describes the facts. So I don’t think it’s a controlled opposition invention.

        Regarding money, you are correct. Money creates nothing, just as points on a scoreboard create no human activity on the field. Money is just a medium of exchange, and a way to keep score. When the medium of exchange is scarce, human exchanges become scarce. The result is poverty.

        As for you-know-who, the only thing worse than insanity is trying to reason with insanity.

        Liked by 1 person

      • Chunch says:

        Your argument is flawd.

        I am not ognoring the military, the military is a requirement for stability. How else can you defend against outside invadors?

        Political stability is also a requirement, how else would you know whether your investments will be there tomorrow?

        Having said that, explain to me why we need a growing money supply? You completely dismissed the fact that growing the monet supply is theft, otherwise counterfeiting would be legal and “needed to have a growing economy”. So why is counterfeiting illegal?

        Here is the cold hard fact – ANY amount of money is sufficient. In fact, a stable money supply is OPTIMAL. Prices are directly impacted by the supply of money, price is a point of equilibrium relative to supply and demand. If the supply of money grows, so does the price of goods and service. Its basic math.

        Businesses prefer a stable rate of inflation since its easier to manage the business cycle.

        What would happen in such scenario is that competition would increase and with it the supplies of goods/services, resulting in price decreases. This is what the economy would do naturaly. The system would “give” to those in need naturaly. Talk about manipulation – MMT is interested in giving to a selected few.

        I do believe the rich control the masses by doing exactly what they think is better for them. Who would be against “helping the poor”? The only thing they forget to mention is that it is the middle class that will help the poor and make the rich richer in the process. That is what these quote social programs unquote do. They are nothing but a scam to keep the poor at bay, push down the middle class down to almost poor status, while the rich bask in wealth.

        How easier to control the class that could threaten the wealthy class than to take what they have and give it to the poor? Look around you, where i live the “poor” are driving SUVs, wearing designer clothes and eating steak, while the “middle class” has to drive the family minivan to work.

        Stating that “we need more money” is the same as me saying we need less money, but i just elaborated on why we need a stable amount of money. If you disagree than lets ask our representatives to make counterfeiting legal for “the good of society”.

        See, and i didnt have to call anyone stupid. Kisses for you all.


      • cool slim says:

        Chunch, the money supply needs to grow because the money supply must respond to the amount of economic activity. At present, the population is growing and productivity is increasing. This equals an increase in the size of the economy. If the money supply does not grow, the result is deflation, which tends to discourage business. The aim is to achieve price stability, which is an inflation rate of 0-2%.


  3. Steve says:

    ‘who is truly an expert analyst.’ Chunchonomics-the basis of all economics. Those, who do not understand the differences between chunchanimics and un-chunchonomics, do not understand economics.


    • Steve says:

      Sorry for sp errors, no editing capabilities-but I believe you get the idea. How do you spell chunch-o-nomics, anyway?


    • The Chunchster doesn’t want to learn or understand, or reason things out through dialogue. That person just wants to be contrary, in the hope of being deleted so that he or she will feel “vindicated.” I don’t delete that person’s comments, but I don’t read them either. I let them add to the humor of the images.


      • Chunch says:

        Prove me wrong Liz. All you can do is spew the same nonsense as Rodger without even thinking its impact.

        To think you have people that ask for the government “to help” while at the same time trashing the US government shows the sad state of affairs. Amazing…

        I don’t profess to know it all, but i do know that mmt is nothing but a scam.

        You agree nothing is free yet want the government to give what you already know takes labor and investment. So what is the difference between you and a thief? Nothing, thats what.

        Why dont mmters do the opposite, work and give your money for nothing in return?

        MMTers should be categorized as a pack of lying scammers, period. You dont give a rats ass about the poor, you care about your own butt.

        Yes, i am an Austrian libertarian.


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