Friday, September 18, 2009
Remember This?
| Remember this? President Barack Obama, calling current deficit spending “unsustainable,” warned of skyrocketing interest rates for consumers if the U.S. continues to finance government by borrowing from other countries. “We can’t keep on just borrowing from China,” Obama said at a town-hall meeting in Rio Rancho, New Mexico, outside Albuquerque. “We have to pay interest on that debt, and that means we are mortgaging our children’s future with more and more debt.” Holders of U.S. debt will eventually “get tired” of buying it, causing interest rates on everything from auto loans to home mortgages to increase, Obama said. “It will have a dampening effect on our economy.” So what has the administration done since these revelations by President Obama that we cannot sustain the current path? Over the next decade, Obama's budget plans to borrow another $9 trillion ... more than doubling our national debt. This year, Washington will spend $30,958 per household. The breakdown goes something like this: about $17,000 from taxes and $13,000 from borrowing. That is an increase of 22% in federal spending this year and a record 26% of the GDP. So you are saying, "Ah well this is just an extraordinary year and Obama inherited Bush's mess and blah blah blah." Well Obama's budget permanently keeps spending between $5,000 and $8,000 per household higher than it was under George Bush. Now don't get me wrong. Bush spent like a frat boy in a liquor warehouse with his daddy's platinum AMEX card. I did not support that spending and I will not support this spending. However I will support the notion that it is time for President Obama to man up and take some of the blame instead of placing it. While President Obama claims to have inherited the 2009 budget deficit, it is important to note that the estimated 2009 budget deficit has increased by $400 billion since his inauguration, and the whole point of the "stimulus" was to increase deficit spending to nearly $2 trillion based on the unproven notion that would it stop the recession. This suggests that even if the President had not inherited a big deficit, he would have created one as a matter of anti-recessionary policy. The public national debt--$5.8 trillion as of 2008--is projected to double by 2012 and nearly triple by 2019. Thus, America would accumulate more government debt under President Obama than under every President in American history from George Washington to George W. Bush combined. The White House brags that it will cut the deficit in half by 2013. The President does not mention that the deficit has nearly quadrupled this year. Merely cutting it half from that bloated level would still leave budget deficits twice as high as under President Bush. Now i'm sure this blog will get attacked as a pro Bush economic policy piece. I assure you it is not. Once again, I did not support Bush's fiscal irresponsibility and it is a big reason for the (L) behind my name. What it does do is bring up the question of the Presidents fiscal policy. If you take the time to hold a "Fiscal Responsibility Summit" you would think one would practice some form of fiscal responsibility would you not? Blaming the previous administration is not a bad thing nor is it totally out of line. President Obama did inherit a debt and deficit. What is wrong about it is the failure to point out he has expanded on it since his "Fiscal Responsibility Summit". Republicans did not practice fiscal responsibility during the Bush administration. They ran up an unparalleled debt and deficit while preaching they were the fiscally responsible party. That is, unparalleled until now. While the current administration may want to blame the previous for the current fiscal debacle and rightly so to an extent, it must also realize it is one in the same if not a little more so. Preaching responsibility and practicing it are 2 different things. What's good for the goose is good for the gander and the current administration has no business invoking the mistakes of the latter when it is running at breakneck speed to overtake it. Both sides can preach all they want. Practice is what lends credibility. Something our government has been lacking for a while. |
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