“The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies.”
Senator Barack Obama
Senate Floor Speech on Public Debt
March 16, 2006
Senator Obama ended his speech with a profound yet often neglected fact: “Every dollar we pay in interest is a dollar that is not going to investment in America’s priorities.” He went on to vote against raising the debt ceiling in 2006.
What a shame Barack Obama has such a short memory. If only he would have paid heed to his own words once he became president in 2008, we wouldn’t be about $3 trillion more in debt and in the worst fiscal crisis the world has ever seen. But, of course, the President and his supporters claim that he had no choice but to spend us even farther into oblivion. After all, he inherited an awful economy from his predecessor. The story goes that his spendthrift policies are what saved us from an economic meltdown. How they know that exactly is not clear?
What is known is that Obama’s policies have not solved our economic woes. In fact, things have become far worse under his leadership. The two statistics that the ordinary American cares most about are unemployment and price inflation. Both have headed in the wrong direction since Obama assumed the reins of power. The government’s unemployment figure stood at 7.8 percent the month Obama became president. Today, 9.2 percent of our workforce is without work. In spite of his “stimulus” spending the unemployment rate has increased 18 percent!
Naturally, with all the new spending and monetized debt over the last two and one-half years, it is reasonable to expect that goods priced in dollars would see an increase. As I have predicted many times on this post, they have. If we just use the government’s CPI numbers it is easy to see that prices under Obama’s program have taken off. When Obama took office the government’s CPI number stood at 0.0 percent. The number released for June 2011 stood at 3.6 percent. Additionally, gas prices have doubled under Obama and food prices are soaring.
Article comments
— go to most recent comments1 - Tommy Mack
He did. The Republicans turned him down. They rejected the deal. You don't mention the consequence of default. Republicans haven't thought that one out either.
Tommy
2 - Baronius
What specific deal was that, Tommy?
3 - Kenn Jacobine
Tommy,
Obama has offered no plan. All he does is scare seniors, soldiers, and the disabled. How about saving money by ending his wars in Pakistan, Yemen, and Libya. Let' go ahead and pull out of Iraq and Afghanistan like he promised during the 2008 campaign.
By prolonging our debt crisis only makes the collapse that much worse later.
4 - handyguy
A lie now apparently to be repeated as truth by every conservative: that only the GOP has offered plans or solutions, that Obama has not. Do all of you get your marching orders from the same source?
If the GOP were not so deathly allergic to to the very words "tax" and "revenue," we might already have a "grand bargain." The Biden talks that Cantor "stormed" out of and the "grand bargain" outline proposed by the White House consisted of between $1.5 and $4 trillion in deficit reduction, in a proportion of 3:1 up to 5:1 in spending cuts to revenue increases. [The "Gang of Six" bipartisan Senate proposal is also in this range.]
[In contrast, the 1990s Clinton deficit reduction package consisted of a 1:1 mix of taxes and cuts. A decade of economic bliss and budget surpluses followed. Remember?]
If these proposals were to be pursued and enacted, it would be a loss in principle for the Dems, and the liberal base would complain loudly. But the GOP is now so extreme and "purist" that there seems to be little chance for a plan containing revenues to pass.
The reason for revenues needing to be part of any real plan is simple: the big cuts have to come from middle class entitlement programs and from defense; if the deficit is reduced through cuts alone, the cuts to entitlements will be draconian [causing real suffering, as well as being politically impossible]. Tax revenues will help soften the blow -- but with a net spending reduction that is still major.
And, most importantly, all this should be discussed separately from the debt ceiling, which only concerns money that has already been spent. The huge financial risks of playing with this situation are very, very real, not fictional scare tactics.
Try telling the truth for a change instead of regurgitating ideological nonsense.
5 - handyguy
The GOP "plan" passed by the House last night is not much more specific than the Obama proposals that Republicans hammer for being too unspecific. Obama is of course politically astute to let the specifics be argued in Congress.
Conservatives rail about the necessity of gigantic cuts without ever discussing the consequences [human and financial] of those cuts. It's just presumed that tax cuts and spending cuts are magical and they will automatically make everything all right.
6 - Baronius
Do we all get our orders from the same place? Look, I'm less likely to believe something if Kenn says it, because he plays fast and loose with his sourcing, but in this case he's right. The reason a lot of people are saying that President Obama hasn't proposed anything specific is because he hasn't, and he keeps saying he has, and keeps accusing Republicans of not doing so. That kind of non-stop, oh let's be polite and call it "spinning", tends to elicit an angry response.
The President certainly hasn't laid out any specifics. You prove that when you can't even identify the President's plan to the nearest $1,000,000,000,000. That's gotta be vexing for you, because you're not stupid and you know that "one-and-a-half or maybe four" isn't a plan. It isn't even a decent weather forecast - if a channel gave you that kind of spread in a snowfall prediction, you'd change the channel.
7 - handyguy
The specifics of spending plans have to be written in Congress, not in the White House. The "range" was not in one proposal, it was in three different ones with different degrees of specificity.
Perhaps the president's proposals were not "real," because he assumed [correctly] that any plan including revenues would be rejected by the inflexible radicals who are in charge of the House. If this actually does turn into a bond-market fueled disaster, it will be on their heads. Their hateful, loud, yelling heads.
I know I've said the same thing several times already, but the debt ceiling should be raised in a one-line bill, as it has been dozens of times before.
Then there should be detailed arguments about the budgets in FY12 and beyond.
Your own comment is 100% spin, and possibly you don't even realize it, because your very thinking apparently consists of spin.
8 - Baronius
I say that it is you who are spinning about the spin that you think I'm spinning about your spin!
Beat that!
9 - zingzing
"The full consequences of a default or even the serious prospect of a default by the United States are impossible to predict and awesome to contemplate. Denigration of the full faith and credit of the United States would have substantial effects on the domestic financial markets and the value of the dollar in exchange markets. The nation can ill afford to allow such a result."
10 - Kenn Jacobine
The U.S. Government technically defaulted in 1971 when Nixon reneged on Bretton Woods and closed the gold redemption window to foreign governments. We have been spending accrued wealth ever since. The current crisis is just the beginning of the collapse of the dollar as the world's reserve currency. If the debt ceiling is not lifted, yes, we will take a big hit in the financial markets. If the debt ceiling is lifted, the crash of the dollar will eventually be greater - much greater. As for me, I own gold so raising the debt ceiling would be to my benefit.
11 - handyguy
Fer cryin' out loud, Kenn. Just 10 years ago we had a budget surplus. These mythological tales you tell are really unworthy of someone who calls himself an educator.
If the debt ceiling is lifted and the government eventually manages to agree on some sort of long term deficit reduction, this hypothetical "collapse of the dollar" will be as fictional as Scientology.
The idea that these giant spending cuts have to happen right now, concurrent with the raising of the debt limit, is just political rhetoric. Nothing else.
12 - zingzing
if anyone's curious about the source of the quote in #9, it's ronald reagan.
13 - zingzing
not that anyone's curious. rhetoric's got nothing to do with fact.
14 - Baronius
Zing, I've seen that quote sometime in the last couple of days. I was thinking it was from Tommy, but he used a different Reagan quote, so I guess it was on another board.
Handy was wondering if Kenn and I fed from the same trough. The fact is, it's a fine line between borrowing someone else's quality rhetoric and spewing talking points. Let's realize that we all walk that line, and not blast someone just for similar points or phrasings.
15 - zingzing
i got it from a friend of mine who used to comment on these boards, but got a bit sick of it i guess. it's understandable. although now he's on facebook and he expresses all his anger there, for good or ill. this place is a bit of an outlet... you have to give it that. for a time, that friend of mine gave up completely on american politics because it sickened him so. he followed irish politics instead. but now he's back.
it's a good quote (and from what sources i can find, there is another quote from reagan a few years later that covers similar territory, so maybe that's tommy's thing, although i haven't seen it), and i think it's something you reagan-loving conservatives might want to think about.
for myself, i believe that this issue is beyond me. i don't understand the complexities of it. neither do you, i'd wager. the republican line seems simplistic and therefore probably wrong-headed. but it's an election year. gotta speak to the dim-witted voter. "we won't raise your taxes, we'll just cut other people's lives in half. but you're safe. vote for us."
why do you think reagan said what was quoted above? give it some thought, if not for me, at least because you feel you must.
16 - Kenn Jacobine
As George Wallace said, "there's not a dime's worth of difference between them. Conservatives are not much better than liberals when it comes to growing government. Reagan, Bush I, Bush II were the biggest spenders until Obama.
17 - handyguy
Lumping all government spending and all taxes into one pile and labeling it Bad accomplishes nothing.
No one is claiming we don't spend too much. But conservatives should acknowledge that big spending cuts will have big negative consequences. They won't be benign or neutral.
Discussing those consequences is what's missing from the rightward half of this debate. It's what leads to the charges, resented so much by some, that conservatives don't care about people, especially poor people.
But the fact that the extremists in the House have blocked or threatened to block big bipartisan proposals [from the president's debt commission, from the "gang of six," from the almost-"grand bargain" overtures by Boehner and Obama -- that fact is what is paralyzing the process.
These proposals all included gigantic spending cuts that would have driven many on the left to distraction. Still not enough for the House's Know-Nothings.
"My way or the highway" gets none of us anywhere.
18 - Tommy Mack
Sometimes I forget that ideology gets in the way of facts. I forget that people can be selective in how and where they get the information upon which they make decisions or render their opinions. I forget that a cult of personality exists and that otherwise responsible adults do not like Mr. Obama. Had it not been for the question, “What deal?” none of that forgetfulness would have come to mind.
The “deal” is the one that the Republicans rejected. It would have been “historic” had Republicans accepted it. But to them, taxes have replaced communism as the national threat. Intransigence will choke the life out of the party, the Independents who resuscitated the GOP in the midterms.
Disliking a person is an interesting basis of opinion. It allows for being vague and accusatory, such as “he hasn’t shown us” or “his policies are abysmal” and the like. Unspecific and unsubstantiated opinion is weak. Broader reading is suggested.
Tommy
19 - Baronius
Disliking a person is an interesting basis of opinion. It allows for being vague and accusatory, such as "disliking a person is an interesting basis of opinion" or "it allows for being vague and accusatory" and the like.
See how maddeningly condescending that sounds? Everyone knows the facts that support his case, so he doesn't have to refer to them specifically. Everyone hears the other guy's case without specific facts, and thinks the other guy is a dolt. You're claiming to be above it, but you're doing it.
No one's provided a link to a specific plan yet. That'd be a great way to introduce falsifiable facts into the argument.
20 - Baronius
"Discussing those consequences is what's missing from the rightward half of this debate. It's what leads to the charges, resented so much by some, that conservatives don't care about people, especially poor people."
That's partially true. But more to the point, the right sees different consequences than the left does. When the right discusses the possibility of strong economic growth as the result of budget cuts, the usual reply is "that's bs and you know it". The problem you're having isn't that the other side doesn't see the consequences but that the other side sees different consequences. That's why they're on the other side.
It's also why you can't call a plan a plan until you see where the debt reduction is coming from. Obviously, if we try to take all the money out of regulatory agencies, the results will be different than if we took the money out of grant-making agencies, or defense, or anti-poverty measures. Likewise, the particular taxes or loopholes that will be affected are going to have different consequences. We need to be - and I hope that someone is - sitting down and figuring out what the most harmless debt reduction measures would be.
21 - handyguy
You're far more interested in rhetoric and word games than you are in discussing facts about the debt ceiling. In virtually every discussion I've ever attempted to have with you, you search for a deal killer so you can ignore the parts of the debate you don't like. [e.g., Source A has printed something in the past I disagree with, so I will ignore every word anyone brings up if it's from Source A.]
Do you think those meetings with Biden consisted of people just sitting in a room staring at each other? Do you think that both Obama's and Boehner's mentioning of the outlines of a grand bargain were just imaginary?
The fact that there is no 500-page document from the White House does not make the whole discussion moot. Every detailed plan starts as a framework.
22 - Tommy Mack
My Dear Cardinal Baronius,"Everyone knows" is a fallacy.
Tommy
23 - Baronius
Sloppy rhetoric allows bad ideas to slip through, Handy, and there's a lot of them in this discussion.
Let's start with $4T in cuts. That's going to be spread over 10 years, so it'd be $400B per year. But most proposals are weighted to put all the tough cuts near the end of the ten years, so it's maybe $200B per year for the next couple of years. Is that to be deducted from a static budget or a projected budget? That's important because the projections show a decrease in next year's deficit of about $500B. So a $200B cut could really be a $300B increase.
But let's skip that last point, and look at the $4T number again. Over a week, that number dropped to $2.4T, then to $1.6T. As soon as the negotiations stopped, and no one's feet were held to the fire, the number went back to $4T.
What would $1.6T really mean? Figure $160B per year, weighted toward later years, so maybe $80B per year over the next two years. With a budget of $3.6T, that would be about 2.2% cuts.
24 - Baronius
Tommy, did you even read the comment?
25 - roger nowosielski
The most likely resolution of the budget wars, "Chained CPI seen as tactic to trim deficit".
Leave it to our politicians, left or right, to find their way out of their impasse by resorting to an accounting gimmick. Which demonstrates the entire show was manufactured on behalf of their respective constituencies, more concerned with ideologies than with matters of substance.