Fuzzy math

I gave Obama credit for this part of his speech:

My administration has also begun to go line by line through the federal budget in order to eliminate wasteful and ineffective programs. As you can imagine, this is a process that will take some time, but we have already identified $2 trillion in savings over the next decade.

Looks like that was just a bunch of hot air according to Megan McArdle:

Take the Iraq war. We were not, under any administration, going to spend as much in 2015 as we did in 2005. But by treating that spending as an ongoing cost, Obama now gets to take as much credit for reducing it as he would for closing permanent air bases in Germany, or trimming Social Security. Reducing the cost of "overseas contingency operations" acounts [sic] for $1.5 trillion of Obama's much vaunted $2 trillion in savings.

It's just an accounting gimmick. So really Obama is talking about saving $50 billion a year over 10 years. Of a budget that is already over $2 trillion and headed for three -- if we aren't already there -- that's about 2.5 percent.

Hard choices, sacrifice, change, yada yada yada.

It's like this guy is from the Chicago school of politics or something.

Update: Greg Mankiw notes the pronounced contrast in projected GDP growth rates between the Obama Administration and blue chip forecasters.

Update: Calafia Beach Pundit has more on the budget fantasy:

Federal receipts are assumed to skyrocket at double-digit rates in 2010 and 2011, despite only a modest recovery, as higher taxes and new limits on deductions presumably succeed in grabbing hundreds of billions of extra dollars from the pockets of the rich. Receipts are then expected to stabilize at just over 19% of GDP, even though they have averaged less than 18% of GDP over the past 40 years and have only exceeded 19% for a handful of those years.

Spending will surge this year, but is then expected to perform the never-before-seen feat of not growing at all for the next 5 years, even as the government brings a huge portion of the population under its healthcare wing and countless government programs expand in coming years thanks to the recently passed "stimulus" bill. Spending is expected to stabilize at just over 22% of GDP, even though it has averaged about 20% for the past 40 years and has only barely exceeded 22% in a handful of those years.

Sigh.