It’s too bad that Americans are just not smart enough for President Obama. First, we fail to understand why ObamaCare is a wonderful, wonderful program and now we don’t comprehend the intricacies of the debt ceiling negotiations. The president probably wishes some mornings that he ruled over Venezuela, for instance, or Cuba – where people get excited about government overreach.
In yesterday’s press conference, a reporter asked Mr. Obama why a recent poll showed that 69% of Americans don’t think we should raise the debt ceiling. The president said that most of us weren’t really paying attention, that we were more concerned with their own issues.
Americans are very concerned with the debt ceiling discussions – they are very concerned that towering deficits and debts are likely to crush our economy going forward. They are also wary of any deal that may emerge. We have raised the debt ceiling 74 times since 1962, always with accompanying music about reining in government spending and becoming more fiscally prudent. It was hogwash then; it cannot be hogwash now.
President Obama seems to have forgotten that only last November the country raced to the polls and delivered him a serious shellacking by electing 87 new Republicans to the House of Representatives. Did he think they were kidding? That somehow those same stupid Americans who fail to appreciate ObamaCare pulled the wrong levers time after time?
Last November the country lined up to elect representatives who truly believe that government has gone awry. They believe that, at 24% of GDP, spending is way, way beyond a reasonable level and that it must come down.
Other than during World War II, the country has never seen such a rate of spending. Many Americans would probably agree that during the emergencies created by the financial crisis, some increase in spending was warranted; today, though, it is time to reel it in.
In fact, there are now 235 Representatives and 41 Senators who have pledged they will not vote for a tax hike. They know their support of any kind of tax increase may cost them their jobs; most also fervently believe we should be encouraging investment and job creation – not penalizing those who might help gin up the economy.
It has been reported that any spending cuts proffered by the president in the recent negotiations only appear in the “out” years. That is, Mr. Obama is not agreeing to actually reduce the budget for 2012 or 2013 – he is only expecting to cut expected outlays, at some future date.
We all know how this will turn out. When that later date arrives, we’ll hear some new excuse about why this is not the time to cut spending. It never is.
Of course, Mr. Obama hopes to be reelected in 2012. He should understand that Americans – even those dumb enough not to fully appreciate the terrific programs he has delivered – may hold him accountable when and if interest rates start to rise and inflation accelerates.
He may be hoping that the inevitable fall out from reckless spending and excessive money creation will be delayed until after the election.
He may be correct.
Though the other day he blamed the jobs crisis here partly on the uncertainty in the EU, Americans understand that it is just that crisis that has protected the dollar and kept our interest rates from soaring.
There are few true reserve currencies in the world; the dollar and the Euro compete for “safe harbor” funds flows. Recently, given the debt crisis in Greece and possible contagion of Italy, Portugal and Ireland, the dollar looks more sound than the Euro. If the monetary authorities in Europe fight their way out of their current mess, we could easily next be in the spotlight.
It is worth noting that Greece’s budget gap is a little more than 10% of GDP. Ours is 9%. Their debt to GDP is 145%; ours is 65%, but the Deficit Commission report projects that by 2020 it will be 90%. This is not scare-mongering – it is facing up to the realities of an aging population and growing “entitlements” programs.
This is a great country, and we have a much better diversified and much deeper economy than Greece. However, we too can lose our way, making endless commitments to future generations that we will be unable to fulfill. We too can burden our productive class so as to dumb down our energies and our growth. This is the time to turn around this spending spree, and to tell President Obama that if he wants to keep his job he had better listen to the voice of the people – even if it’s a stupid voice.