When I hear the term “spending freeze” I think no more additional spending, but apparently there is a different definition used by Obama.  To him it means no additional funding to certain projects, but other programs may continue to spend.

I just don’t see how increasing spending by over $3 trillion will help cut the national debt. To me spending more money means you go deeper in debt. Does the government have a different set of mathematical rules?

The Obama Budget: Higher Taxes, Higher Spending and More Debt

President Barack Obama will submit a $3.8 trillion budget proposal for fiscal 2011 to Congress today. One might hope that given last year’s $1.4 trillion budget deficit was an all-time high and the President promised a spending “freeze” in last week’s State of the Union, this budget might signal a change in direction from the White House. No such luck. President Obama’s new budget is full of billions of dollars in new spending for failed government programs, higher taxes on American families and businesses, and deficit spending for as far as the eye can see.

At the very least, the budget document President Obama is submitting today exposes his spending “freeze” promise for the fraud that it is. As outlined last week, the administration would halt spending increases for only a $447 billion sliver of our total budget, with a total of $15 billion to be saved. That is less than half a percent off of last year’s spending. Worse, this isn’t even an across-the-board spending freeze; it is an aggregate one. So “spending cuts” in parts of the budget are immediately channeled to others. For example, even though the federal government does not need any money for the Census next year, President Obama counts the $5 billion spent this year as a “spending cut” that can be immediately spent on other government programs, such as a16% increase in Department of Education funding, a 6.8% increase in Department of Energy funding, and increases for ineffective Health and Human Services programs like Head Start and sex education.

Given the best case scenario, the most the White House hopes to save from this supposed spending “freeze” is$15 billion. And that is easily dwarfed by just the $100 billion President Obama wants for his Economic Stimulus II plan. Then there are the tax hikes, including higher taxes on families earning more than $250,000 and a brand new tax on financial institutions to pay for the failed automobile union bailout.

And what is the end result of all of President Obama’s new taxes and spending? A record national debt. According to the White House Office of Management and Budget, the United States will post a $1.556 trillion deficit in fiscal 2010, which the Obama administration claims will be reduced to $1.267 trillion in fiscal 2011, thanks to their budget. Given this administration’s budget forecasting record, however, expect that final deficit number to go up. The Obama administration now forecasts $5.08 trillion in debt over the next five years; that is 35% more debt than they forecast just 12 months ago.

A common sense budget would move our country in a much different direction. For starters, the remaining TARP and stimulus funds should both be rescinded. Next, instead of the President’s fungible “aggregate” spending freeze, tough hard spending caps should be enacted. Finally, Congress should disclose the massive unfunded obligations of Social Security, Medicare and Medicaid; put those programs on long-term budgets; and enact the necessary entitlement and programmatic reforms that can keep government within those limits. –more

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The once might British Pound is now in deep trouble amid rising concerns over the country’s deficit.  Many are speculating that they only hope the Pound has for survival is for Conservatives to win in 2010.

Pound may fall below parity with euro, economists warn

Economists have warned that the pound is on the brink of sinking below parity with the euro due to the Government’s unconvincing plans to tackle Britain’s £178 billion budget deficit.

Douglas McWilliams, the chief executive of the Centre for Economics and Business Research (cebr), said that the British economy was walking “five yards away from the edge of the cliff” and could be toppled by an “unexpected gust”.

The pound is trading at 1.10 against the euro after hitting a low of 1.02 a year ago. However, currency markets are reflecting the expectation of a win for the Conservatives in next year’s election, raising hopes of tougher action to tackle the deficit. Any signs of Labour closing the gap ahead of the election would result in the pound plunging, according to the cebr.

“If I had to bet, I would bet on the side of parity being broken,” said Mr McWilliams, adding that there was significant downside risk for the euro as a result of the divergent economic performances of countries such as Germany and Greece.    –more

British Pound Teetering On The Verge Of Euro Collapse

Weak GDP growth, a soaring government deficit, and lack of credible plans to correct anything has led to growing concerns that the British pound could collapse — becoming less valuable than a euro.

The U.S. dollar looks like a star in comparison given higher expected GDP growth in the U.S. and more relative credibility in the government’s ability to control spending in the longer term.

While the pound/euro currently sits at 1.11, the next stop could be parity.    –more

Related British Pound articles

• UK economy ‘is still not growing’ (news.bbc.co.uk)
• Sterling hits sixmonth low on Brown asset sales low interest rates (telegraph.co.uk)
• Pound hit by falling UK inflation (news.bbc.co.uk)