Some Quick Charts on the 2010 Budget

Chart 1Chart 1
These are the big tax hike chunks of the budget, though there are other provisions in there and all of these are designed to grow bigger. The cap-and-trade energy tax in particular is enormously aggressive, requiring 32 percent bigger emissions cuts than last year's Lieberman-Warner version, and requiring all emissions permits to be auctioned, making it the exact functional equivalent of a tax with added uncertainty to inhibit planning and trading regimes to create a whole new arena for Wall Street Wizards to work their magic.

Chart 2Chart 2
This chart shows spending as a percentage of the economy reaching the historic level of 27.7 percent this year, with only a small drop-off anticipated in 2010, that is unlikely to happen given the seemingly unlimited appetite of Congress for more spending.

Chart 3Chart 3
This chart shows a deficit as a percent of the economy unseen at any time in our nation's history outside of the four peak years of World War II. The biggest difference is that war effort was funded primarily from domestic savings, whereas the current deficit is mostly borrowing from foreign governments. It is now an open question how long this level of borrowing will be sustainable, and the Federal Reserve stands ready to step in and buy Treasuries directly, monetizing this record debt and triggering inflation. This chart is from the Obama budget so these deficit levels already assume his tax increases, which are dwarfed by spending increases.

Chart 4Chart 4
This chart goes with the one above, and shows the cumulative federal debt held by the public. Held by the public means excluding government accounts, which means Social Security and Medicare obligations are not included. We have not seen these debt levels since the year in the 1950s when we were still paying for World War 2.

Chart 5Chart 5Finally this last chart shows the overall trajectory of federal spending and revenues through 2019 under the Obama budget plan. Note that even if they succeed in cutting spending from 2009 levels in 2010, it will be just a temporary bump down on the road to a $5 trillion budget.