Economist–Barack Obama has ducked the challenge of grappling with America’s deficit Woes

Let’s indulge Mr Obama in his fantasy economics: imagine that he does reduce the deficit to 3.1%. Supposedly, that would stabilise government debt: but it would do so at a dangerously high level of around 80% of GDP, and as interest rates rise the target will become much harder to hit. And that is before you consider the biggest problem of all: as more and more baby-boomers retire (the first started to do so this year), their demands for pensions and government-provided health care will start to push the deficit sharply up again after that.

Indeed, the real problem with both Mr Obama’s budget and the Republicans’ proposals is not so much the half-truths and fibs within them, as all the things they both left out. America needs to simplify its tax system and (slightly) increase its overall tax take. It needs to rein in its defence spending, which is currently equivalent to that of the next 20 countries combined. And it needs to tackle the gathering surge in entitlement costs. All these recommendations were made by the deficit-reduction commission that Mr Obama himself set up, but his budget conspicuously fails to take up any of them. Other debt-burdened Western countries have embarked on a stringent diet. America continues to gorge.

Read it all.


Posted in * Culture-Watch, * Economics, Politics, Budget, Consumer/consumer spending, Corporations/Corporate Life, Economy, History, Office of the President, Politics in General, President Barack Obama, Psychology, Social Security, Taxes, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The National Deficit, The U.S. Government

7 comments on “Economist–Barack Obama has ducked the challenge of grappling with America’s deficit Woes

  1. Sidney says:

    [i]It needs to rein in its defence spending, which is currently equivalent to that of the next 20 countries combined. [/i]

    I suspect it’s the defense spending that continues to make all the other spending feasible on the international political scene. Ask Europe, South Korea, Taiwan, and anybody else near China, North Korea, Iran or Russia if they want us to cut defense spending.

    Even in our sophisticated modern age, guns talk.

  2. magnolia says:

    unfortunately if he touches SS or Medicare the pubs will be the first to use it in campaign ads to ensure that he is a one term pres. he has no choice politically but to wait for the other side to break first.

    i heard today that it costs more than 1 mil a year to keep one soldier in afghanistan; that’s ridiculous. we need to bring all our people home, we are not the world’s police force.

  3. Sick & Tired of Nuance says:

    In other words, #2, he is not being a leader. Worse, he is looking out for his own interests (getting elected to a job where he can take massive amounts of vacation no matter what is going on and vent his personal peeves against our allies by insulting behavior), instead of looking out for the interests of MILLIONs of Americans.


  4. Crabby in MD says:

    Yes, we have a BIG defense budget. That’s how Europe afforded universal health care all these years – they don’t HAVE much of a defense budget, we defend them! But even without having to defend themselves, they, too are running out of money. And Obama is doing what?

  5. Sick & Tired of Nuance says:

    Agreed #4. We are STILL in Iraq, we have expanded our presence in Afghanistan immensely, Gitmo is STILL open, and the Patriot Act is STILL the law. In just 7 months of Obamanation, we increased the national debt by a Trillion dollars. The Obama budget is STILL over a Trillion in deficit spending. So let’s see…

    Still at war. Check.
    Gitmo still open. Check.
    Patriot Act still the law. Check.
    Huge debt. Check.
    Huge deficit. Check.
    Huge tax increases. Check.
    Big corporations still getting rich at tax payer expense. Check.
    Social Security still bankrupt. Check.
    Medicare still bankrupt. Check.

    Yep, it’s the Obamanation in full force. Zero, my hero, how wonderful you are…

  6. Chris says:

    how do we reconcile all this rank amateurism, gutlessness, incompetence, etc. from the O with his claim that he is a Christian? I am not seeing how any Christian could be so inept.

  7. Cennydd13 says:

    What is Obama doing, you ask? Spending us into oblivion, that’s what!