Obama: “We can’t generate sustained growth without getting our deficits under control”

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I was hoping not to be reading this:

Obama aims to halve deficit by 2013

by Ross Colvin

Feb 22 (Reuters) — Obama wants to slash the ballooning deficit in half by 2013, U.S. officials said Saturday, after massively increasing public spending to stem the worst economic crisis in decades.

The president will outline his ambitious goal when he hosts a summit at the White House Monday on fiscal responsibility and later in the week when his administration presents a summary of its first budget, for the 2010 fiscal year.

“We can’t generate sustained growth without getting our deficits under control,” Obama said in his weekly radio address in which he also announced immediate implementation of tax cuts for 95 percent of Americans as part of the effort to stimulate the economy.

And he may succeed by letting the top tax rates rise in 2010. This would raise taxes for people with relatively low propensities to consume, until the strong economy again drives the budget into surplus and thereby causes the next crash.

If he first allows the budget deficit to get large enough to add the savings that will support the subsequent Obamaboom that brings the deficit down.


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4 Responses to Obama: “We can’t generate sustained growth without getting our deficits under control”

  1. RichW says:

    Wanted to share a link to a guy I’ve enjoyed reading for years. Seems to get it.


  2. Vipul says:

    They’ve changed the accounting practices for the deficit, and are now counting Iraq, Afghanistan, and disaster spending (Katrina and the like) as part of the regular budget. Before they were supplemental and not counted.

    This is bad in that now everyone will see a bigger number so they’ll panic more. It’s good in that since Obama is promising to halve the deficit by the end of his second term, it’ll be bigger than it would have been, I guess.

    Overall, like you said, discouraging.


  3. warren mosler says:

    right. the stim package won’t be ‘nothing’ and will probably stabilize us at very high levels of unemployment for a considerable period of time.

    ironically that can be very good for financial markets and very bad for those working for a living


  4. Paul M says:

    There is also a great article in the WSJ, “Obama, Paying the Price for the Defecit”, which shows his ignorance in this area. The comment that I found troubling was in regards to the deficit “he inherited” being at $1.3 trillion or 9.2% of GDP. I thought the deficit was currently closer to 5% of GPD??? I fear at the end of the day there won’t be any net deficit spending to offset the private sector drag on economy, just a reshuffling of government spending on the projects he and his party prefer.


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