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Wednesday, November 18, 2009

Is this a Joke? Obama Gives "Sternest Warning" Over Deficit Spending



According to Reuters (h/t Pundit & Pundette via Gateway Pundit) Obama is now against deficit spending.

"President Barack Obama gave his sternest warning yet about the need to contain rising U.S. deficits, saying on Wednesday that if government debt were to pile up too much, it could lead to a double-dip recession.

"With the U.S. unemployment rate at 10.2 percent, Obama told Fox News his administration faces a delicate balance of trying to boost the economy and spur job creation while putting the economy on a path toward long-term deficit reduction.

"His administration was considering ways to accelerate economic growth, with tax measures among the options to give companies incentives to hire, Obama said in the interview with Fox conducted in Beijing during his nine-day trip to Asia.

"'It is important though to recognize if we keep on adding to the debt, even in the midst of this recovery, that at some point, people could lose confidence in the U.S. economy in a way that could actually lead to a double-dip recession,' he said.

"Fox News, which released a transcript of the interview, showed that comment by Obama on Wednesday morning and said the full discussion would be broadcast later in the day."

This seems me to be an indication of two things: 1) a man losing confidence in his own policies, and 2) a prelude to raising taxes.

As Gateway Pundit points out, in February Peter Orszag, the White House Budget Director, said in another Fox interview:

"During an economic downturn like we’re experiencing the deficit gets elevated which is not only natural, it’s beneficial because it helps bring the economy back up to the potential output level. In other words, the key problem we face right now is the gap between how much the economy could produce and how much it is producing. The whole point of the Recovery Act is to fill in that gap and part of that means a temporary elevated deficit."

Taking (or using) these words as an excuse, the Obama Admin, has revved up the spending to historic levels. $789 billion in political payoff-- er, um... "stimulus" spending was just the beginning of Obama's spree. According to the AP (via Fox): "The federal budget deficit tripled to a record $1.4 trillion for the 2009 fiscal year that ended last week, congressional analysts said Wednesday.

"The Congressional Budget Office estimate, while expected, is bad news for the White House and its allies in Congress as they press ahead with health care overhaul legislation that could cost $900 billion over the next decade.

[...]

"The previous record deficit was $459 billion and was set just last year."

Now, as many indicators point toward an economic downturn after the corpse bounce, Obama is out issuing "stern warnings" against deficit spending. Hmm. Looks like a loss of confidence to me.

My bet is that Obama is laying down a track of finger-wagging warnings simply so that he can cover himself and claim the "fact" that he did so before an economic downturn and a harder recession. The mere fact that Obama is doing all this now, is a pretty good indication that he believes hard times are ahead and that his stimulus didn't do much stimulating despite the White House's Orwellian vaudeville lines to the contrary. We also shouldn't forget that Obama is in Asia trying to sell American economic strength abroad. Every statement he makes there should be considered in that context.

Second, this is a pretty clear warning that tax hikes are on the way, perhaps even the much-anticipated Value Added Tax. Sure, deficit spending is bad but that's not going to stop Obama and Congress from spending $1 trillion on Trojan horse health care. So how do you limit deficit spending but not cut back on programs and other... uh... spending? By raising taxes, of course. I'm sure he'll claim it's all Bush's fault and that the "inherited" economic crisis caused him to break his campaign promise of no new taxes on the middle class, blah, blah, blah... So much excuse-making blather...

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