President Obama has announced his plans to eliminate the US budget deficit within 12 years. His timetable is three times slower than George Osborne's.
President Obama has finally announced his plans to bring the US budget back to balance. He has chosen to do so on a timetable three times slower than Britain’s Chancellor, George Osborne.
President Obama said yesterday:
“I’m proposing a more balanced approach to achieve $4 trillion in deficit reduction over 12 years. It’s an approach that borrows from the recommendations of the bipartisan Fiscal Commission that I appointed last year, and it builds on the roughly $1 trillion in deficit reduction I already proposed in my 2012 budget. It’s an approach that puts every kind of spending on the table — but one that protects the middle class, our promise to seniors, and our investments in the future.”
The independent Congressional Budget Office outlines that the US deficit was 8.9 per cent in 2010 and will be 9.5 per cent in 2011 – a similar level to the UK’s (Table 1.3). US debt is projected to be 68.9 per cent of GDP in 2011 compared to 66.1 per cent in the UK. Yet despite these similarities, President Obama is to take twelve years rather than the four that Osborne is taking to eliminate the cyclically adjusted current budget deficit by 2014-15. Indeed Obama’s approach will mean that the deficit is still “about 2.5% of GDP in 2015, and put deficits on a declining path toward close to 2.0% of GDP toward the end of the decade.“
Obama’s plan also contains something that looks much more like a ‘Plan for Growth’ than the Coalition’s short-cut of 1980s style cuts to tax and regulation. He said:
“We will make the tough cuts necessary to achieve these savings, including in programs that I care deeply about, but I will not sacrifice the core investments that we need to grow and create jobs. We will invest in medical research. We will invest in clean energy technology. We will invest in new roads and airports and broadband access. We will invest in education. We will invest in job training. We will do what we need to do to compete, and we will win the future.”
And unlike the Tory plans to cut the 50p rate and fail to renew the bankers’ bonus tax, Obama said, “we cannot afford $1 trillion worth of tax cuts for every millionaire and billionaire in our society. We can’t afford it. And I refuse to renew them again.”
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21 Responses to “Obama’s deficit reduction plan is three times slower than Osborne’s”
Carol Clarke
RT @cernyw: RT @leftfootfwd: Obama's deficit reduction plan is three times slower than Osborne's http://bit.ly/eEixnW reports @wdjstraw
Moazzam Ali Asghar
RT @leftfootfwd: Obama's deficit reduction plan is three times slower than Osborne's http://bit.ly/gNjVBE #in
Obama helps re-frame the deficit debate | Left Foot Forward
[…] Will Straw pointed out on Left Foot Forward this morning, Obama is going three times slower than George Osborne’s […]
Mister Jabberwock
Will, I think emulating the US would be admirable. I am sure they will come out of recession faster than the UK as they have a much more flexible economy.
You are keen on their planned level of public spending and approach to higher rate taxpayers but since I don’t have the figures to hand would you mind reminding me (and your readers) what the % of US GDP spent by the public sector is and what the top rate of tax is – Would I be wrong to assume from your post that you think they are a good target for us….
Mark Stevo
Politician in “throw money at electorate a year before the election” total non-shocker. Come 2013 Cameron will be doing the same.