I was speaking with a co-worker the other day as she explained her issues with her new mortgage lender. It seems that her previous lender sold her loan, and now it has taken several months and multiple phone calls to get her payment plan set back up the way she wanted it before. It occurred to me awhile later that her frustration explains an awful lot about why liberals so often choose government over the private sector, and it has a lot to do with why we’re such fast-food junkies in this country.

The conclusion I’ve come to is that government is preferred by liberals because of the franchise phenomenon. A “franchise” is a business that offers a consistently similar service in multiple locations (although often, single-location businesses attempt to use franchise techniques). Examples include H&R Block for tax services, Jiffy Lube for automotive care, Chili’s for family dining and of course every health-nut’s whipping boy McDonald’s for fast food. In particular, government is reminiscent of fast food.

Think about it this way: Most people agree that fast food is unhealthy and the quality is relatively poor, especially when compared to home-cooked meals or fine dining. However, there are three basic components of fast food that keep people coming back:

1. It’s cheaper than other restaurant types, such as family restaurants or fine dining.
2. It’s easier than cooking at home (that is, doing it yourself).
3. While the quality is low, it’s “good enough” and it’s very consistent across each store.

I don’t think the makers of “Fast Food Nation” had that in mind when they made their film (it being a sarcastic and overly-melodramatic farce about the fast food industry). However, a more appropriate monicker for modern government programs couldn’t exist. Government programs cost less to the person using them (even if they’re actually more costly than the private sector–tax dollars subsidize them). Since often the only requirement is to fill out some forms to determine eligibility, government programs are often easier than exploring the private sector and figuring out for oneself what options are best. Finally, while most people recognize the relatively poor quality and limited choices offered, at least it’s consistent across the country or state providing it.

Social Security is an excellent example of this. Even though Social Security generally provides only poverty-level retirement income and a conservatively invested 401(k) or IRA provides far superior retirement income, many people don’t put much or any money away in retirement accounts. They’d rather depend on government (which is going to force them to participate, anyway) than try and figure out some kind of retirement plan on their own, even with the help of a financial adviser.

The consistency of government services, mediocre as they are, is what attracts people to them. While the private sector may provide services better and usually (in reality) cheaper than government, one provider may offer fantastic services while another offers terrible services and five more range from great to mediocre. Each offers its products at a different price based upon its offerings and the market. Beyond that, each one has different offerings that they have tailored to fit the needs of their preferred client type as well as their own cost structure and expertise.

This is, of course, the value of the private sector: Offering various products and different levels of service at different prices. This optimizes the system for different groups of people with different needs, wants and values. It ensures the largest number of people are satisfied. Take car insurance: One person may only have car insurance for the express purpose of that it’s required by law in that state. Another person may have car insurance because it’s required by their auto loan lender. Yet another person may have car insurance because they can’t afford to be without a car for more than a day or two if they’re in an accident. Each of these people have different needs, and each car insurance company offers different products to fit some or all of those needs. Each car insurance company offers a different level of service and different prices based upon that customer’s needs and the risks associated with that customer. A careful consumer picks and chooses based upon careful research and matching of their personal requirements to the insurer, but often people simply go with the lowest price or the company their family has been using for generations or the one with the cutest advertising.

It’s no wonder some people are turned-off by the private sector. It’s the same reason people are wary of trying the new local restaurant: Sometimes it’s really fantastic or just plain good, but often enough it’s mediocre or bad. How many times has your family tried to decide on what’s for dinner, choosing a franchise restaurant over a local restaurant or a dinner at home? At least with government people see relative consistency, even if that consistency is mediocre at best. And who’s more likely to be burned by a bad actor in the private sector? People buying products and services at the low-end of the scale, of course. Whether it’s a car, an HMO plan or a mortgage lender, low-end products generally offer far less to the buyer, making them far more likely to fail the consumer’s expectations.

So when people choose these lesser options, they sometimes get burned, or at least perceive they’ve been burned. This builds up a resentment for private sector business. I purchased the New iPad when it came out (I just made the pre-order cut-off), and to go with it I ordered a case with a built-in Bluetooth keyboard. I didn’t order the high-end, leather-encased $80 model from a Big Box store, however; I chose a pleather $30 item from a discounter. The case arrived about five days after the iPad, and after charging the keyboard, I discovered some of the keys didn’t work. After fiddling with it a bit, the non-working keys started working. The next day, they failed again, and again after a short time they started working. On the third day, they failed and never came back. Finally, I contacted the vendor to return the case. Lesson learned: Even if it’s not real leather, buy a name-brand.

ASIDE: As I was writing this, the vendor I ordered the case from offered a refund, with no need to return the defective item. Imagine a government doing something like that without a court ordering them to do it. Score one for the private sector!

The problem for many people is that they can’t afford to buy the high end model, so they continue buying low-end product. The reason I bought the low-end case is that I’m stretching my finances just to buy the iPad, so I wanted to save on the case. It’s a bit like buying a new luxury car and then putting on cheap tires to save a couple bucks. I can afford to buy the name brand and have a decent case, but many people can’t and this leaves a poor taste in their mouth about private sector business (or conversely, they save for a high-end product but it doesn’t meet their expectations). So rather than seeing the value of the private sector and its many choices and options, they see a stream of low-end products and think, “Gosh, the government ought to do something^TM about this.”

So a politician offers them a government solution. It could be socialized medicine. It could be Social Security. It could be regulations. There are numerous programs, projects and administrations that exist to either limit choices or provide something that the private sector could otherwise or already does supply. Some laws and regulations or programs just limit the options available from the private sector without providing anything as a substitute.

Sometimes that last one is a good thing (snake oil salesman and used car dealers have a reputation for a reason, after all), but often enough the regulations enacted simply stifle product innovation or increase the cost of producing a product. One need simply look at the relative cost for a new car today compared to before the implementation of the first safety standards in the 1950s and ’60s. Certainly some of those regulations are a good thing (I wouldn’t drive a car without seat belts, for example), but many simply increase the cost of cars. Airbags are nice, but they aren’t a necessary safety feature in all accidents the way seat belts are. Daytime running lights increase both the cost of the vehicle from the start and (since the lamps are lit more often) increase the cost of operating the vehicle. These regulations have lifted new cars from being something that was once affordable and attainable to anyone with a halfway decent job if they saved for awhile, to something that is now virtually unattainable to anyone below middle class status.  Most now even require at least upper-middle class incomes to really be affordable as “new”. Governments standardizing in law or regulation items that were once features prevents existing businesses or new entrants from offering low-cost solutions, pushing people out of the new car market.

It’s not that government is any good at making its programs and agencies work well. It’s the consistency of government options that keeps people coming back to government solutions. Just as fast food is almost always the same no matter what store you visit, so too does government offer the same type of mediocre solution when liberals choose government over self-reliance or private sector solutions.

The really interesting part is when the people using a government program find that it doesn’t meet their expectations. Instead of a fantastic solution to all of their personal ills, they discover it’s just one more mediocre solution no better than most of the private sector solutions they rejected. Soon enough, there are calls for “Reform!” as the programs fail to meet anyone’s expectations. So politicians increase the program’s scope without really solving any of its systemic problems, and because it’s “free” (or at least, costs less to the user), there’s no impetus to get off the government program and choose a private sector solution. The cycle continues on and on with expansion, failure, “Reform!”, expansion and renewed failure as the national debt mounts higher and higher.

It’s a cycle that builds dependency, reduces competitiveness and limits options.  The offerings are usually bad.  The expectations are always far above what is eventually produced.  It stinks all the way around, and people clamor for more.

Thank you for choosing Fast Food Government. Would you like economic stagnation with that?

Here’s a headline you won’t see in the media this week: we incurred the largest monthly deficit on record in February.

Seven months into a government “reined in” by the Budget Control Act, we are supposed to be reaping the benefits of budget reduction.  Yet, according to CBO, we incurred a gargantuan $229 billion deficit in the month of February.  The conservative Washington Times was the only publication to note that this was the largest monthly deficit on record.  Keep in mind that we didn’t start accruing annual deficits of $230 billion until this past decade.  The preliminary estimates from CBO projected outlays at $334 billion and revenues at $105 billion.  Our total deficit for the first 5 months of fiscal year 2012 is $631 billion ($869 billion in revenue; $1.5 trillion in outlays).

Think for a moment about what it means to spend $334 billion in 29 days.  It comes out to $11.5 billion per day; $480 million per hour.  So the next time Congress deliberates over a few billion in spending cuts over the course of a month, remember that we will add several hundred billion more in debt during the course of the debate.

What is so astounding about the record monthly deficit is that it comes amidst a recovery in the job market and an overall increase in revenues.  Due to quirks in the scheduling of government payments, February is always a bad month; nevertheless, even during the worst months of the recession, we never suffered such a large budget deficit.  In February 2009, the monthly deficit checked in at $193.8 trillion.  At a time when tax receipts are increasing again (corporate tax receipts are up 56%), we should not be racking up such high deficits.  Hence, it is incontrovertibly clear that we don’t have a revenue problem; we have a spending problem, most prominently, an entitlement and welfare problem.

While some figures show spending for the year down a few points, that reduction is entirely due to an accounting shift.  Most federal entitlement payments are sent out on the first of the month; however, this year, October 1 (which was also the first day of the fiscal year) fell out on a Saturday.  As such, $31 billion of October’s payments (accounting for 55% of this year’s “deficit reduction” and 92% of outlay reduction) went out on the last day of September, thereby saving the new fiscal year from the extra accounting burden.  So ultimately, we have not cut a dime in spending (even before the record deficit set in February).  As CBO notes, spending has actually gone up in some areas:

“In contrast, net payments to the government-sponsored enterprises Fannie Mae and Freddie Mac increased by $11 billion, as compared with those in the first five months of fiscal year 2011. Adjusted for timing shifts, outlays for Social Security benefits and Medicare also were higher, by $14 billion (or 5 percent) and $6 billion (or 3 percent), respectively.”

Over the next few months, we’re going to witness sharp debates over the FY 2013 budget resolution, the sequester, and the level of discretionary spending.  While it is certainly important to reduce as much discretionary spending as possible, it is clear that any budget deal that ignores mandatory spending will do nothing to stop the record deficits.

Cross-posted From The Madison Project

Here’s a headline you won’t see in the media this week: we incurred the largest monthly deficit on record in February.

Seven months into a government “reined in” by the Budget Control Act, we are supposed to be reaping the benefits of budget reduction.  Yet, according to CBO, we incurred a gargantuan $229 billion deficit in the month of February.  The conservative Washington Times was the only publication to note that this was the largest monthly deficit on record.  Keep in mind that we didn’t start accruing annual deficits of $230 billion until this past decade.  The preliminary estimates from CBO projected outlays at $334 billion and revenues at $105 billion.  Our total deficit for the first 5 months of fiscal year 2012 is $631 billion ($869 billion in revenue; $1.5 trillion in outlays).

Think for a moment about what it means to spend $334 billion in 29 days.  It comes out to $11.5 billion per day; $480 million per hour.  So the next time Congress deliberates over a few billion in spending cuts over the course of a month, remember that we will add several hundred billion more in debt during the course of the debate.

What is so astounding about the record monthly deficit is that it comes amidst a recovery in the job market and an overall increase in revenues.  Due to quirks in the scheduling of government payments, February is always a bad month; nevertheless, even during the worst months of the recession, we never suffered such a large budget deficit.  In February 2009, the monthly deficit checked in at $193.8 trillion.  At a time when tax receipts are increasing again (corporate tax receipts are up 56%), we should not be racking up such high deficits.  Hence, it is incontrovertibly clear that we don’t have a revenue problem; we have a spending problem, most prominently, an entitlement and welfare problem.

While some figures show spending for the year down a few points, that reduction is entirely due to an accounting shift.  Most federal entitlement payments are sent out on the first of the month; however, this year, October 1 (which was also the first day of the fiscal year) fell out on a Saturday.  As such, $31 billion of October’s payments (accounting for 55% of this year’s “deficit reduction” and 92% of outlay reduction) went out on the last day of September, thereby saving the new fiscal year from the extra accounting burden.  So ultimately, we have not cut a dime in spending (even before the record deficit set in February).  As CBO notes, spending has actually gone up in some areas:

“In contrast, net payments to the government-sponsored enterprises Fannie Mae and Freddie Mac increased by $11 billion, as compared with those in the first five months of fiscal year 2011. Adjusted for timing shifts, outlays for Social Security benefits and Medicare also were higher, by $14 billion (or 5 percent) and $6 billion (or 3 percent), respectively.”

Over the next few months, we’re going to witness sharp debates over the FY 2013 budget resolution, the sequester, and the level of discretionary spending.  While it is certainly important to reduce as much discretionary spending as possible, it is clear that any budget deal that ignores mandatory spending will do nothing to stop the record deficits.

Cross-posted From The Madison Project

'This is really about leadership, and it's about recognizing that we are in a very difficult financial situation'

Well, it appears that our efforts are paying off.  Responding to our charge that the GOP was violating the pledge against bundled megabills, Boehner announced that he will split the proposal into three separate bills; the highway bill (HR 7), pension reform (HR 3813), and expanded oil and gas drilling (HR 3408).  This from Roll Call:

In a joint statement with Rules Chairman David Dreier (Calif.), the Ohio Republican sought to cast the decision as part of his pledge for a more open environment in the House.

“Republicans pledged to pass bills in a more transparent manner and reverse the era of quickly moving massive bills across the floor without proper examination. Accordingly, the energy/infrastructure jobs plan will be considered on the floor in the same manner in which it was written and voted upon in committee — in separate pieces,” Boehner and Dreier said.

Such a process will allow “each major component of the plan to be debated and amended more openly, rather than as a single ‘comprehensive’ bill with limited debate and limited opportunity for amendment,” they added.

This is great news.  But here’s the catch (via CQ subscription):

The idea is that lawmakers would be able to vote their conscience on pieces of the bill, without requiring them to vote on the entire thing — for instance, lawmakers could vote for the authorizing portions of the surface transportation title, but vote down the changes to federal employee pensions.

Then, once the bills are passed separately, the House’s bill clerk would sew them back together and send them to the Senate as one bill.

Hence, any good will on the part of conservatives to vote for the good bills (pension reform and drilling) will be pocketed and rejoined with the unappealing highway bill.  The Rules Committee will meet tonight and write a structured rule to combine the bills upon passage, and have them shipped off to the Senate as one entity.  This will facilitate passage of the highway bill and allow a future conference committee to denude it of the offsets, leaving House members with a plain deficit-inducing highway bill.

Republican leaders employed the same subterfuge with passage of the omnibus bill last December.  They proposed an omnibus bill that, when coupled with $10 billion in emergency spending, would set spending levels for FY 2012 ($1.053.9 trillion) higher than those of FY 2011 ($1.047 trillion).  So they broke up the proposal into three separate bills; an omnibus with spending levels slightly below FY 2011 ($1.043 trillion), an emergency disaster relief bill ($10.6 billion), and a bill to offset the disaster spending, which they knew would be jettisoned by Democrats in the Senate. This allowed members who voted for the omnibus to go on record as saying that they voted to offset the extraneous spending, thereby keeping their pledge to spend less than the previous year.  It also enabled Senate Democrats to pass the underlying omnibus bill, along with the emergency spending, but easily vote down the offsets in the third bill.  And that is exactly what they did today.

What’s that saying about “fool me once etc.?”  Don’t fall into the trap.  Don’t get distracted by the ANWR provisions.  Keep your sights on the highway bill.  The end result will be a top-down federal highway bill that requires an immediate $40 billion bailout for a new mass transit account and future bailouts down the road.  Either way, there will be no pension reform or expanded oil drilling from the final version of the bill.  This is yet another example of the shenanigans that are so endemic of Washington politics.

Cross-posted from The Madison Project

Well, it appears that our efforts are paying off.  Responding to our charge that the GOP was violating the pledge against bundled megabills, Boehner announced that he will split the proposal into three separate bills; the highway bill (HR 7), pension reform (HR 3813), and expanded oil and gas drilling (HR 3408).  This from Roll Call:

In a joint statement with Rules Chairman David Dreier (Calif.), the Ohio Republican sought to cast the decision as part of his pledge for a more open environment in the House.

“Republicans pledged to pass bills in a more transparent manner and reverse the era of quickly moving massive bills across the floor without proper examination. Accordingly, the energy/infrastructure jobs plan will be considered on the floor in the same manner in which it was written and voted upon in committee — in separate pieces,” Boehner and Dreier said.

Such a process will allow “each major component of the plan to be debated and amended more openly, rather than as a single ‘comprehensive’ bill with limited debate and limited opportunity for amendment,” they added.

This is great news.  But here’s the catch (via CQ subscription):

The idea is that lawmakers would be able to vote their conscience on pieces of the bill, without requiring them to vote on the entire thing — for instance, lawmakers could vote for the authorizing portions of the surface transportation title, but vote down the changes to federal employee pensions.

Then, once the bills are passed separately, the House’s bill clerk would sew them back together and send them to the Senate as one bill.

Hence, any good will on the part of conservatives to vote for the good bills (pension reform and drilling) will be pocketed and rejoined with the unappealing highway bill.  The Rules Committee will meet tonight and write a structured rule to combine the bills upon passage, and have them shipped off to the Senate as one entity.  This will facilitate passage of the highway bill and allow a future conference committee to denude it of the offsets, leaving House members with a plain deficit-inducing highway bill.

Republican leaders employed the same subterfuge with passage of the omnibus bill last December.  They proposed an omnibus bill that, when coupled with $10 billion in emergency spending, would set spending levels for FY 2012 ($1.053.9 trillion) higher than those of FY 2011 ($1.047 trillion).  So they broke up the proposal into three separate bills; an omnibus with spending levels slightly below FY 2011 ($1.043 trillion), an emergency disaster relief bill ($10.6 billion), and a bill to offset the disaster spending, which they knew would be jettisoned by Democrats in the Senate. This allowed members who voted for the omnibus to go on record as saying that they voted to offset the extraneous spending, thereby keeping their pledge to spend less than the previous year.  It also enabled Senate Democrats to pass the underlying omnibus bill, along with the emergency spending, but easily vote down the offsets in the third bill.  And that is exactly what they did today.

What’s that saying about “fool me once etc.?”  Don’t fall into the trap.  Don’t get distracted by the ANWR provisions.  Keep your sights on the highway bill.  The end result will be a top-down federal highway bill that requires an immediate $40 billion bailout for a new mass transit account and future bailouts down the road.  Either way, there will be no pension reform or expanded oil drilling from the final version of the bill.  This is yet another example of the shenanigans that are so endemic of Washington politics.

Cross-posted from The Madison Project

Poor John Feehery had the impossible task of arguing both against host Chris Matthews and MSNBC regular, sir frog voice himself Eugene Robinson of the Washington Post who both took turns shilling for, defending, and promoting Mr. Obama’s new budget for 2013. Now, I have yet to read the budget and all the details but from what I’m hearing it’s a two fold pile of donkey crap mixed with ice cream and tax hikes. Never mind the rehashed vomit, like this obsession the left has with building roads and bridges, there’s also plans to train  2 million Americans at community colleges….because we don’t have job training programs and technical schools in this country as it is. Boy what would we do if the left didn’t exaggerate all things that exist in the world? They seem to play on the premise that more of the same is best, even when more of the same has undeniably weakened this nation’s fiscal and economic standing long term.

When Mr. Feehery tried to argue the dangers of long term deficits caused by short term politically influenced spending, he was shot down by Eugene Robinson because according to Mr. Robinson better we leave our children with a belt busting deficit and debt than a bad economy. Well what if we’re setting our children and grandchildren up to inherit both? Hmm, you know I bet liberals didn’t stop to think about the 1,0000th way you could die before exhausting the possibilities of the first 999.

Spending our way into a more sustainable economy doesn’t work and the facts bare that out. Our deficit remains a key component as to why no matter how short term a so called “recovery” lasts, the fact that the United States is set to hit at or near the 26 trillion dollar mark in terms of our net debt and deficit is something that seems to fall on the ears of the profoundly dumb, aloof, and blind. But hey, perception is key and the unemployment rate is falling, never mind the reason why the unemployment rate continues to go down, Media Matters and the mainstream media have the details covered so many Americans won’t have to inform themselves about the truth.

Ignorance and intellectual laziness will ultimately in my view spell the end of what was, and what no longer is a credible nation. I’m just being honest when I say America is a at best now a top tier second rate nation on borrowed time. We’re like a former pound for pound fighter who at such a relative young age is now shot and without real presence because he’s been in too many wars in the ring. We’re like said fighter who continues to chase the fast buck fighting the young studs whom he knows he can no longer compete with on an equal level. He keeps fighting and fighting because he needs to make out with the grip because he knows it’s not too far along when that one young stunner clears the deck with that one perfect knockout punch and boom, end of story.

We can’t compete with China, Brazil, and India right now so we teeter around them sight unseen as to not get noticed and vaporized in this global contest for world supremacy. The Chinese laugh at us because they know the more we spend the closer they’ll get to owning us. But unfortunately our president doesn’t care because his long game is reelection and his strategy is class warfare. So he’s going to spend trillions and he wants the rich to pay for it. Now, math was my worst subject but let me try to calculate the cost: 1% of 99% are to pay for a 3.8 trillion dollar budget. So it’s like you mom and dad who make 100,000 dollars a year each, paying the college tuition costs for you, your sister, your brother, your friends, and their brothers and sisters combined for the next four years, give a year or two depending. By the time your folks calculate the expenses they’ll have not even begun to even dent the surface because they have expenses of their own.

And my friends that’s the misfortune of having personal responsibilities. If you 250,000 dollars a year chances are you aren’t just partying and buying private jets and yachts all day long. You have bills, you have to maintain your property, you see being well off means more than just the power of purchase. This may surprise liberals, even rich liberals but rich people work harder than poor people you know why? Rich people work harder than poor people because rich people are rich. Think about how Bill Gates and Steve Jobs became millionaires and eventually billionaires. I’m sure the man or woman behind the most iconic companies and or products our there had many set backs and doubts before ultimately making good or their risk taking.

I’m not bashing poor people just stating a fact. It’s much harder making a lot of money than it is making enough money to get by. Any Joe out there can find a job flipping hamburgers for tips, but how many Joe’s are willing to work hard enough to move up and one day own the company or start their own burger joint?

I almost want Democrats to raise taxes though because I want to them to run out of rich people to tax. I want to see their faces when they realize the number of wealthy Americans has declined under their policies. Why, who will donate to their campaigns if that happens?

On Monday, Obama is slated to release his annual budget proposal for FY 2013, along with a 10-year budget (2012-2021) outlook.  One would think that after talking incessantly about cutting spending, Obama would spend less money next year than this year.  Yet, in Obama’s world, a spending cut means spending less than you were slated to spend, even though it is still higher in nominal terms.  The Wall Street Journal has already obtained the outline of his budget:

President Barack Obama’s budget request to Congress on Monday will forecast a deficit of $1.33 trillion in fiscal year 2012 and will include hundreds of billions of dollars of proposed infrastructure spending, according to draft documents viewed by Dow Jones Newswires and The Wall Street Journal.

The projected deficit is higher than the $1.296 trillion deficit in 2011 and also slightly higher than a roughly $1.15 trillion projection released by the Congressional Budget Office last week.

Hence, even though revenues are projected to go up by $220 billion this year, the deficit will still tick up another $37 billion.  Using CBO’s baseline, that would mean spending will rise $257 billion this year under Obama.  And that’s during an election year.  You can imagine what he would pull out of the hat if he wins a second term.

The specifics aren’t published yet, but we have these nuggets from the article:

The budget includes more than $350 billion in short-term measures for job growth; a six-year, $476 billion proposal for roads and other surface-transportation projects; and more than $360 billion in savings in health programs such as Medicare and Medicaid. [...]

The budget also calls for a 5% increase in nondefense research-and-development spending over the previous year and proposes $2.2 billion for advanced manufacturing research and development—a 19% increase over 2012.

Surprise! More stimulus spending, plus more top-down federally-managed transportation, not unlike the Republican proposal in the House (yeah, we’re looking at you), and almost identical to the Senate proposal, which raises taxes (supported by all Republicans except for 9).  So how does Obama plan to reduce his $1.6 trillion deficit from last year?  We’ll wait and see, but undoubtedly, it will come out of the military.

Regarding the healthcare cuts, until we reform the entire healthcare system to reflect the free-market, these cuts are either notional or will squeeze Medicare patients even further.

Finally, what would an Obama budget be without tax increases:

The draft documents don’t include all the details of the president’s budget but show similarities to the budget plan the White House laid out in September 2011. The budget proposal, for example, repeats a call for $1.5 trillion in new revenue, mostly from ending Bush-era tax cuts for families earning more than $250,000 a year.

Let’s pray with all our might that this will be Obama’s final budget.

Cross-posted to The Madison Project

On Monday, Obama is slated to release his annual budget proposal for FY 2013, along with a 10-year budget (2012-2021) outlook.  One would think that after talking incessantly about cutting spending, Obama would spend less money next year than this year.  Yet, in Obama’s world, a spending cut means spending less than you were slated to spend, even though it is still higher in nominal terms.  The Wall Street Journal has already obtained the outline of his budget:

President Barack Obama’s budget request to Congress on Monday will forecast a deficit of $1.33 trillion in fiscal year 2012 and will include hundreds of billions of dollars of proposed infrastructure spending, according to draft documents viewed by Dow Jones Newswires and The Wall Street Journal.

The projected deficit is higher than the $1.296 trillion deficit in 2011 and also slightly higher than a roughly $1.15 trillion projection released by the Congressional Budget Office last week.

Hence, even though revenues are projected to go up by $220 billion this year, the deficit will still tick up another $37 billion.  Using CBO’s baseline, that would mean spending will rise $257 billion this year under Obama.  And that’s during an election year.  You can imagine what he would pull out of the hat if he wins a second term.

The specifics aren’t published yet, but we have these nuggets from the article:

The budget includes more than $350 billion in short-term measures for job growth; a six-year, $476 billion proposal for roads and other surface-transportation projects; and more than $360 billion in savings in health programs such as Medicare and Medicaid. [...]

The budget also calls for a 5% increase in nondefense research-and-development spending over the previous year and proposes $2.2 billion for advanced manufacturing research and development—a 19% increase over 2012.

Surprise! More stimulus spending, plus more top-down federally-managed transportation, not unlike the Republican proposal in the House (yeah, we’re looking at you), and almost identical to the Senate proposal, which raises taxes (supported by all Republicans except for 9).  So how does Obama plan to reduce his $1.6 trillion deficit from last year?  We’ll wait and see, but undoubtedly, it will come out of the military.

Regarding the healthcare cuts, until we reform the entire healthcare system to reflect the free-market, these cuts are either notional or will squeeze Medicare patients even further.

Finally, what would an Obama budget be without tax increases:

The draft documents don’t include all the details of the president’s budget but show similarities to the budget plan the White House laid out in September 2011. The budget proposal, for example, repeats a call for $1.5 trillion in new revenue, mostly from ending Bush-era tax cuts for families earning more than $250,000 a year.

Let’s pray with all our might that this will be Obama’s final budget.

Cross-posted to The Madison Project

DebtEye announced Wednesday it is now SpringCoin, a learning-focused financial planning website that gets more intuitive as you use it.

John Sun, CEO of San Francisco-based SpringCoin, started the business under the name DebtEye in February 2011. It was one of the start-ups at the notable Y Combinator start-up incubator. SpringCoin helps customers meet financial needs and figure out how to pay off their debts by improving their financial literacy and by creating goals.

“There’s a mentality that this stuff (finance) is above them and that’s just not true,” Sun says.

The integrated features and financial education aspect of SpringCoin is what differentiates it from DebtEye.

SpringCoin features adaptive bill setting and financial budgeting plans that change the more you use it.

“Kind of like how Netflix figures out what type of movies you like to watch, the site will pick up where you spend your money,” Sun explains. “We can actually get extremely targeted and say, ‘Last week you spent $30 at Starbucks. This week we recommend you spend $20.”

This is made possible by significant improvements to the software algorithms, he says.

To create SpringCoin, Sun and his team surveyed consumers to get feedback and find out what parts of the original site worked and what could stand to change. Sun says DebtEye engaged customers, but they wanted the name to focus more on the positive aspects of managing your finances. Rather than watching debt, focus on growing your coin. Probably the most important part of SpringCoin that could make it stand out from other debt management sites is its financial education element.

Financial education is integrated into users’ financial goals — “we really put that part at the heart of SpringCoin,” he says.

Sun and his team gathered content by speaking with financial bloggers, finance experts and using their own internal knowledge — Sun and his team are credit counselors.

SpringCoin also features automated budget alerts and bill reminders that can pull information directly from users’ bank transactions.

“It uses financial forecasting methods — the same methods that Fortune 500 companies use — to project and warn customers about future cash flow problems that could occur,” he says.

When users meet financial goals they are rewarded with points that measure their progress and entered into a weekly raffle to win Amazon gift cards or other prizes.

“If you just want a place to look at all your accounts in one place, we recommend something like Mint or Ready For Zero,” notes the website FAQ’s.

SpringCoin will not be free — but don’t fret, it’s a nominal fee at $8 per month for the basic plan, which includes spending monitoring, bill reminders, basic financial education tools and rewards. However, the premium plan is $35 per month, which tacks-on negotiation tools for lower payments, automatic bill payments, a complete set of financial education tools, and round-the-clock financial advice. Sun has a noble reason for shunning advertising. He didn’t want to create a conflict of interest that might arise if financial or credit companies that Sun didn’t approve of wanted to advertise, so he decided to forgo ads entirely. Some companies he stands behind, Sun says, but rather than going down that potentially precarious path, they went with a paid price model.

Every user gets a one month free trial before the monthly fee kicks-in. As a “limited time” promotion, Sun says, if you submit the email addresses of three friends (Sun promises not to spam them) even if your friends don’t respond, you can get three months free.

Sun says they plan to release an app in the future, but probably not until next year.

What do you think about SpringCoin? Will you use it? Do you use any other debt management websites? Tell us in the comments.

Image courtesy of iStockphoto, kizilkayaphotos

More About: debt, debt management, finance, personal finance, y combinator

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