Remember the shock generated when the Obama Office of Management and Budget recently announced that the projected 10 year deficit was increased from $7 trillion to $9 trillion? Guess what? That lastest projection is based on "make believe" economics. Although most media outlets have failed to report on it, stories from both Reuters and Forbes reveal that the true 10 year budget deficit will probably be...fasten your seatbelts...well over $11 trillion.
To put yourself into the proper mood for their analysis of the OMB "make believe" deficit projection, it is best to listen to the "Make Believe" tune from Showboat (sorry, Howard Keel version unavailable).
Are you ready? Okay here is the first piece of evidence from Reuters about why the projected 10 year $9 trillion budget deficit provided by the OMB is only a "make believe" prediction:
The White House budget update released on Tuesday still reflects a controversial Obama administration plan to combat global warming by auctioning all permits to emit greenhouse gases even though Congress has said it will give away a substantial portion to industry.
The mid-session budget review from the Office of Management and Budget estimates the government will raise $627 billion in revenue between 2012 and 2019 from a so-called cap-and-trade system requiring companies to buy permits for the carbon gases they spew into the atmosphere.
However, analysts say it is unlikely lawmakers will approve any climate control system that would force polluters to initially pay for the majority of carbon permits.
Got that? The Cap & Trade bill is unlikely to be passed in the Senate yet the OMB is counting on the supposed $627 billion revenue stream from a non-existent law for their projection of "only" a $9 trillion deficit.
But wait! It gets even worse according to Forbes:
...To get to $9 trillion, the White House is still counting on $627 billion in revenues from cap-and-trade, $275 billion from limiting deductions on taxes, $622 billion from health savings, $295 billion from "other revenue changes and loophole closers" and $580 billion in upper-income tax provisions. That's $2.4 trillion of revenue that's far from guaranteed.
So to even reach $9 trillion, the White House has to engage in a lot of "make believe."
Make believe that a highly reluctant Senate will pass Cap & Trade. Make believe that there will be a $275 billion revenue stream generated from limiting deductions on taxes. Make believe that there would actually be $622 billion in health savings. Make believe that $295 billion plus another $580 billion of revenue will be generated from tax policy gimmicks. And, finally, hope that this all clicks together for revenue of $2.4 trillion that, as Forbes states, is far from guaranteed.
Since revenue projections almost always fall short, especially those predicted by this wishful thinking administration, the realistic 10 year budget deficit is likely to be over $11 trillion, not the $9 trillion that is currently being widely reported in the media.
(UPDATE: My DUmmie FUnnies "co-conspirator," the parodying pastor Charles Henrickson, has provided a lyrical update to "Make Believe" below.)
Only make believe "$9 trillion"
Only make believe it won't be more
We can hope, we can cope by pretending
Debt won't rise, debt won't grow, debt won't soar
Make believe the gap is shrinking
By a trillion bucks, or two or three
Maybe this is a change you'll believe in
But to tell the truth, not me!