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Obama Again Sides with the Deficit Terrorists

Posted by WARREN MOSLER on May 17th, 2009


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It’s for real – Obama’s in the deficit terrorist camp, using the communication skills he learned in his rhetoric 101 class.

Obama Says U.S. Long-Term Debt Load ‘Unsustainable’

by Roger Runningen and Hans Nichols

May 14 (Bloomberg) — President Barack Obama, calling current deficitspending “unsustainable,” warned of skyrocketing interest rates for consumers if the U.S. continues to finance government by borrowing from other countries.

  1. It’s domestic budget surpluses that are unsustainable- they remove savings.
     
  2. Interest rates are set by the Fed, not the market or the deficit. Japan’s deficits have been triple ours and their rates lower for decades, for just one (unnecessary) example.
     
  3. The US government is not dependent on borrowing from other countries in order to spend.
     
  4. “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.”

    That’s a load of inapplicable rhetoric for the purpose of terrorizing uninformed Americans.

    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.”

    Interest rates are set by the Fed, not by those who elect to buy Treasury securities.

    The president pledged to work with Congress to shore up entitlement programs such as Social Security and Medicare and said he was confident that the House and Senate would pass health-care overhaul bills by August.

    “Most of what is driving us into debt is health care, so we have to drive down costs,” he said.

    Whatever costs he’s got in mind (insurance, drug company markups, etc.) should be minimized in any case.

    It’s not about the ‘debt’.

    The biggest risk to our economy is the risk of Obama succeeding in enacting measures to reduce the deficit.


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One Response to “Obama Again Sides with the Deficit Terrorists”

  1. Anderson Cooper Says:

    The White House’s budget director says the economy has almost bottomed out and the sense of economic free-fall is over.

    Peter Orszag (OR-zag) says that as the economy improves in the months ahead, the nation’s budget will run lower deficits. He also says that the Obama administration’s financial assumptions are going to be updated because of higher-than-expected unemployment rates.

    The budget director says President Barack Obama is committed to changes in the health care system this year. Orszag says the president’s plan to provide health care to millions of uninsured Americans would not add to the federal deficit in the short term, and actually reduce it in coming years.

    Reply

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