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Obama: Our Out-of-Control Debt Is ‘Sustainable’ for the Next Decade
Pajamas Media ^ | 03/15/2013 | Tom Blumer

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 Obama’s unserious take on the size and grave nature of the federal government’s 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 what’s important to recognize is that– we’ve already cut– $2.5– $2.7 trillion out of the deficit. If the sequester stays in, you’ve got over $3.5 trillion of deficit reduction already.

And, so, we don’t have an immediate crisis in terms of debt.

Even if the first paragraph made sense, which it doesn’t, the second paragraph doesn’t 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 we’ve seen during the past four intolerable years would only lead one to conclude that there’s “no immediate crisis” if the national debt were currently small. Unfortunately, it’s not.

If you didn’t know any better, you would think that Barack Obama doesn’t 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 it’s 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, doesn’t, and that his “clever” phrasing will cause many to believe that both our deficits and national debt are coming down. In other words, he’s betting against the intelligence of a large percentage of the American people, while also calculating, probably correctly, that his lapdogs in the establishment press won’t call him out for doing so, and will in fact support his misdirection. In other words, he’s 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.

Obama’s 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 don’t have to worry about it short term.” He also said that “it is a problem long term and even medium term.”

That’s 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, it’s gonna be in a sustainable place.

Gosh, I had no idea that the nation’s financial situation has improved so much in the past five months. Of course, it hasn’t.

Even given his pathetic opponent, Obama’s 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 can’t win elections if they tell us what they really believe.

The CBO’s projection leaves 2023 “debt held by the public” at 77 percent of the nation’s annual economic output, or gross domestic product, up from about 41 percent at the end of fiscal 2008. That’s 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 we’ll hit that 90 percent limit well ahead of 2023. The most important is lackluster employment growth — and yes, it’s still lackluster despite last week’s 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 report’s issuance by the Associated Press, aka the Administration’s 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, it’s largely part-time and temporary in nature. After seasonal adjustment, the government’s 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. That’s over 5.5 percent of all private-sector job growth during that time.

We haven’t seen anything yet. Just wait until employers fully grasp ObamaCare’s 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.

It’s still not inconceivable that we will become “maxed out” by the end of Obama’s second term — especially because the president insists, as he told John Boehner during “fiscal cliff” discussions, that “we don’t have a spending problem.” Oh yes we do — and if we don’t fix it, an abyss which no amount of punitive taxation will prevent awaits.

TOPICS: Business/Economy; Culture/Society; Government; News/Current Events
KEYWORDS: debt; deficit; obama

1 posted on 03/15/2013 8:11:21 AM PDT by SeekAndFind
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To: SeekAndFind

When the crash happens,
I will be IN THE FACE of anyone that blames anyone but leftists for it.

2 posted on 03/15/2013 8:13:20 AM PDT by MrB (The difference between a Humanist and a Satanist - the latter admits whom he's working for)
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To: SeekAndFind

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”.

3 posted on 03/15/2013 8:22:06 AM PDT by allendale
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To: allendale

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.

4 posted on 03/15/2013 8:23:45 AM PDT by MrB (The difference between a Humanist and a Satanist - the latter admits whom he's working for)
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To: SeekAndFind

Shut up, stupid ass.

5 posted on 03/15/2013 8:33:59 AM PDT by albie (re)
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To: SeekAndFind

"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."

Armstrong Economics

6 posted on 03/15/2013 8:34:49 AM PDT by concerned about politics ("Get thee behind me, Liberal")
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To: albie

Now, that was uncalled for... SeekAndFind is a good FReeper.

7 posted on 03/15/2013 8:35:16 AM PDT by MrB (The difference between a Humanist and a Satanist - the latter admits whom he's working for)
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To: SeekAndFind

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.

8 posted on 03/15/2013 8:46:36 AM PDT by Pollster1
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To: concerned about politics

“China will emerge as the largest economy in the world”

China has already peaked.

9 posted on 03/15/2013 9:05:15 AM PDT by JCBreckenridge (Texas is a state of mind - Steinbeck)
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To: SeekAndFind
we don’t have an immediate crisis in terms of debt.

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.

10 posted on 03/15/2013 9:35:29 AM PDT by mjp ((pro-{God, reality, reason, egoism, individualism, natural rights, limited government, capitalism}))
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To: SeekAndFind
Something that I heard on a financial chat segment this morning is that the reason that housing has "taken off" is because lenders have begun rolling back the requirements again, and this one commentator actually said that the only difference between now and 2005/2006 mortgage situation is that the federal government is now backing nearly all the mortgages, mostly Fannie-Mae, Freddie-Mac, or FHA. In effect, they're creating another bubble, with low down-payment/no-down-payment mortgages, just to pad the numbers, giving the impressions that the economy is actually starting to recover. However, when this bubble bursts, there will be no stomach for "To Big to Fail," and I believe that this will be the opportunity for the federal government to federalize banking in the US.


11 posted on 03/15/2013 10:40:10 AM PDT by MarkL (Do I really look like a guy with a plan?)
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