Skip to comments.Obama: Our Out-of-Control Debt Is ‘Sustainable’ for the Next Decade
Posted on 03/15/2013 8:11:21 AM PDT by SeekAndFind
In an interview with former Bill Clinton apparatchik George Stephanopoulos aired on ABC Wednesday morning, President Barack Obama shared his beliefs about where the nation stands financially.
The takeaway quotes from that sit-down concern Obamas unserious take on the size and grave nature of the federal governments annual deficits, which have exceeded $1 trillion during each of the past four fiscal years, and the national debt, which, at $16.71 trillion as of Tuesday, has increased by over $6 trillion since he took office less than 50 months ago:
And, y you know I think whats important to recognize is that weve already cut $2.5 $2.7 trillion out of the deficit. If the sequester stays in, youve got over $3.5 trillion of deficit reduction already.
And, so, we dont have an immediate crisis in terms of debt.
Even if the first paragraph made sense, which it doesnt, the second paragraph doesnt follow logically.
The $2.5 trillion to $3.5 trillion in cuts to which Obama referred are really reductions in projected spending growth spread out over the next ten years. Very little of these reductions will take place in the current fiscal year, and the vast majority of them have obviously not happened already. Any claims relating to reductions in future years are speculative at best, because they can either be undone by future congresses with the help of Obama himself or a future president, or undermined by slow economic growth.
In early February, the Congressional Budget Office, using fairly aggressive growth assumptions, projected that the government will run cumulative deficits during the next ten fiscals years through 2023 amounting to $7 trillion, and that the debt held by the public (i.e., what Uncle Sam owes its bondholders and creditors) will grow by $7.7 trillion. The fact that future annual deficits might not be quite as absurdly high as what weve seen during the past four intolerable years would only lead one to conclude that theres no immediate crisis if the national debt were currently small. Unfortunately, its not.
If you didnt know any better, you would think that Barack Obama doesnt understand the difference between the deficit, the amount by which government outlays exceed government receipts, and the national debt, which is how much the nation owes to its creditors. Though its tempting to believe otherwise, of course Obama knows the difference. What he is really hoping is that the average American, or at least the average low-information voter, doesnt, and that his clever phrasing will cause many to believe that both our deficits and national debt are coming down. In other words, hes betting against the intelligence of a large percentage of the American people, while also calculating, probably correctly, that his lapdogs in the establishment press wont call him out for doing so, and will in fact support his misdirection. In other words, hes not governing in any real sense; he has instead embarked on a 20-month campaign to win a Democratic majority in the House in the 2014 elections.
Obamas statement denying an immediate (debt) crisis is consistent with what he was willing to reveal during the 2012 presidential campaign. In October of last year, while unable to identify its amount, he told David Letterman that we dont have to worry about it short term. He also said that it is a problem long term and even medium term.
Thats not what Obama told Stephanopoulos in his Wednesday interview. In his very next sentence following the excerpt above, the president did a complete about-face:
In fact, for the next ten years, its gonna be in a sustainable place.
Gosh, I had no idea that the nations financial situation has improved so much in the past five months. Of course, it hasnt.
Even given his pathetic opponent, Obamas ridiculous assertion might have buried him electorally if he had uttered it during the presidential campaign. Assuming he really believes it, he should have. Instead, as has so often been the case, he chose to mislead the American people. Progressives have known for decades that they cant win elections if they tell us what they really believe.
The CBOs projection leaves 2023 debt held by the public at 77 percent of the nations annual economic output, or gross domestic product, up from about 41 percent at the end of fiscal 2008. Thats not all that far from the 90 percent of GDP threshold at which many economists consider a nation to be maxed out, i.e., the point at which lenders will likely either decide to stop lending or raise their interest rates.
There are plenty of reasons to believe that well hit that 90 percent limit well ahead of 2023. The most important is lackluster employment growth and yes, its still lackluster despite last weeks news that the economy added 236,000 seasonally adjusted jobs in February and that the unemployment rate dropped to a still completely unacceptable 7.7 percent.
Job growth is not accelerating, the term used after the reports issuance by the Associated Press, aka the Administrations Press. The raw numbers before seasonal adjustment show that the economy lost more net jobs during the past four months than it did during the same four months a year earlier.
To the extent job growth is occurring, its largely part-time and temporary in nature. After seasonal adjustment, the governments monthly Household Survey, which is the basis for the reported unemployment rate, tells us that there were 77,000 fewer full-timers in February than in January, but 102,000 more part-timers. The Establishment Survey, the basis for reported job growth, tells us that temporary help services, a sector which contains about two percent of all employment, have added a seasonally adjusted 109,000 jobs in the past 12 months. Thats over 5.5 percent of all private-sector job growth during that time.
We havent seen anything yet. Just wait until employers fully grasp ObamaCares impact on their operations. The bias towards hiring part-time workers is what will accelerate. Part-time workers pay less in federal income and employment taxes. This will lead to significantly lower federal tax collections, higher deficits than CBO expects, and faster growth in the national debt.
Its still not inconceivable that we will become maxed out by the end of Obamas second term especially because the president insists, as he told John Boehner during fiscal cliff discussions, that we dont have a spending problem. Oh yes we do and if we dont fix it, an abyss which no amount of punitive taxation will prevent awaits.
When the crash happens,
I will be IN THE FACE of anyone that blames anyone but leftists for it.
Its “sustainable” because Obama figures he gets to spend all the borrowed and printed money and gets out of town before the real bill comes due. That is the liberal definition of “sustainable”.
The folks in DC beyond the braindead know that this is unsustainable and have made plans for their own exodus.
Read “299 days” for a novelized version of info from and insider.
Shut up, stupid ass.
"This Cycle Turns March 22nd, 2013. We will begin a new decline and the mask of the Obama Deception will be removed. Welcome to 2013. We will begin a 72 year decline from which a new world will emerge for our posterity. China will emerge as the largest economy in the world and the US will turn against its productive segment reducing its long-term economic viability."
Now, that was uncalled for... SeekAndFind is a good FReeper.
Jumping off a 20 story building is sustainable for the first 19 stories on the way down. Obama is even dumber that I thought if he doesn’t understand that the 20th floor is going to hurt and that the disaster is unavoidable with his reckless spending.
“China will emerge as the largest economy in the world”
China has already peaked.
That is because libtards are unable to see long run consequences. When the debt becomes so large that the government has to finance it with inflation rather than raising taxes, then the government need not obtain its funds from the people, but can instead supply the people with funds. In this situation,it can no longer easily be viewed as deriving its powers and rights from the people. The ability to inflate enables the government to throw off its status as the servant of the people, deriving its just powers from the consent of the governed, and to appear instead in the guise of the Provider and Father of the people, with the people deriving their existence, powers, and rights from the government.
In such a state of affairs, not only does the government go on growing in size from year to year both absolutely and relative to the rest of the economic system, but the only ultimate stopping point becomes a totalitarian socialist dictatorship.