Friday, January 09, 2009
Obama's deficits will make Bush look as "tight fisted" with money as Scrooge!
We don't usually agree with Pres. Clinton.
We do agree with Clinton when he said that Obama was "a fairy tale".
In a couple of years, we will realize that Clinton's "fairy tale" assessment was the most profound comment about the 2008 campaign.
Forget "hope and change"!
It's "fairy tale" that the historians will focus on!
Obama is now proposing something called a "stimulus" program to save the country from the current "economic crisis"!
In fact, Obama told us that it will take years and trillions of dollars to recover from this mess that he innocently inherited!
What's wrong with that?
There are two things wrong with it.
First, we are not facing the worst economic crisis since the Great Depression. I'm old enough to remember 1982 when unemployment hit double digits, inflation was 14% and the bank prime rate was in the ceiling.
Don't scare with me a lot of nonsense about how Obama's plan is the last line of defense between prosperity and poverty. (Obama Embraces the Politics of Fear)
I don't usually buy doom and gloom anyway, specially from Democrats!
Second, how about a little truth about Obama's record?
Obama voted for every big ticket item in the Bush budget:
"Yet while Obama stressed that he'll inherit the $1.2 trillion deficit — and on Tuesday called the Bush administration irresponsible for adding to the national debt — he didn't identify any Bush-era policy that he'd reverse to reduce the deficits and mounting debt." (Just as Obama begins, huge deficit could hamper plans)
It's very disingenuous to blame Bush when you voted for all of it, including the recent bank bailout, the "checks" mailed last spring and the Iraq War!
Obama also voted for earmarks, including the one that "conveniently" went to the Chicago hospital that Mrs. Obama was working in.
Unfortunately or fortunately, Obama won't get years to blame Bush for this economic crisis.
Obama may not even get 90 days because there is already a lot of commotion in Congress about spending that kind of money.
This is not going to be a slam dunk! Thank God!
I don't care how well BO delivered the proposal.
Today's speech was more of the "hope and change" stuff with few, if any, specifics.
We are already seeing resistance in Congress:
Budget gloom will toughen resistance to stimulus By Edward Luce and Krishna Guha
Obama is about to get ownership of the deficit! (Why Obama Will 'Own' the Recession by James Pethokoukis)
Why not Bush's deficit?
Take a look at the chart above again!
As you can see, Bush's deficits were in the 2 to 4% range relative to GDP.
In other words, Bush's deficits were actually below the post-WW II average.
Deficits matter. However, living with a Bush deficit 2% of GDP is not critical. On the other hand, living with an Obama deficit of 7% of GDP is not good!
Here is the nightmare scenario: Obama will soon be spending our grandchidlren's DVD money, as well as their Big Mac, Gatorade, and cell phone money.
Obama's deficits will make Bush look like Scrooge, specially in the 2010 fiscal year and beyond.
What will happen? It won't be long before BO has to put the "brakes" on all of this spending.
Why? Because Obama's deficits will actually slow down the economy rather than stimulate it. At least, they will guarantee some huge tax increases down the road:
"Whether or not you think new spending will stimulate the economy, the one undeniable truth is that this money has to come from somewhere, which means that it is borrowed or taxed from the private economy.
This spending blowout is all but guaranteeing huge future tax increases, and anyone who thinks only the rich will pay is living an illusion." (The looming red ink is unlike anything in U.S. peacetime history)
Obama's biggest problem will be entitlements, not Bush's deficits:
"But the real problem is that the first baby-boomers retired last year.
In coming decades spending on entitlements—the three main ones being Social Security (pensions), Medicare (health care for the elderly) and Medicaid (health care for the poor)—will drive deficits and so debt up sharply.
Publicly held debt will climb from 41% of GDP last year to 54% next year, the CBO predicts, then decline (on the assumption that the recession will start to come to an end).
But the CBO has previously said that, as America ages and if current policies continue, it could theoretically hit an otherworldly 400% by mid-century." (The Economist)
We can't afford any of this plus Obama's stimulus. We can't tax enough rich people to pay for all of this!
Roger Kimball has a good post today called Obama and Capgrass Syndrome:
That’s the delusion, named for the French shrink Jean Marie Joseph Capgras, that “a close relative or friend has been replaced by an impostor, an exact double, despite recognition of familiarity in appearance and behavior.”
Who is that Obama double? Who is that guy talking like Obama and creating bigger deficits than Bush?
P.S. Enjoy the Obama presidency and those prophetic "fairy tale" words from Bill Clinton:
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