Obama administration deficit spending
The Obama administration deficit spending is government deficit spending which is occurring at unprecedented levels. The Obama administration fiscal policy is burying Americans under a mountain of debt. Persistent deficit financing, along with tax increases in hard economic times, are known job killers that stifle growth and choke job creation, even according to Keynesian economic theory.
- Main article: Obamanomics
The Obama deficits are unquestionably the largest on record and represents an explosion of debt owed to foreign investors -- capital that must be exported in the future. The most recent deficit under President Obama for the year ending September 30, 2010 has been reported by the administration as $1,290 billion dollars (or $1.29 trillion).
President Obama's record deficits include the $787 billion failed Economic stimulus, the $634 billion "down payment" on so-called healthcare reform, and the $80 billion UAW bailout, which added to President George W. Bush's proposed $700 billion deficit in 2008. President Obama's claim "I had a $1.3 trillion deficit wrapped in a bow, waiting for me at the Oval Office" is unsupported by the facts.
Reliance on foreign investors
Approximately one-third of the National debt, or virtually all that President Obama and Congressional Democrats added to the existing debt, is now held by foreign investors. Two failed Stimulus packages in the past three years from the Democratic Congress were an incredible waste of resources for what the President later admitted were non-existent "shovel ready" jobs at a time they were needed for the private sector to create jobs. Rather, a large foreign debt was created which must be repaid before any benefit ever trickle's down to working families.
Downgrade of U.S. credit worthiness
The Chinese credit rating agency, Dagong Global, downgraded the long term sovereign credit rating of the United States from “AA” to “A+“, which reflects the U.S. deteriorating debt repayment capability. The agency cited,
- serious defects in the United States economic development and management model will lead to the long-term recession of its national economy...Subject to the economic development model of the United States, the credit crisis is far from over, and the U.S. economy will be in a long-term recession…
The New York Times reports officials from China to Germany to Brazil suggest " Washington's addiction to debt has greatly diminished its credibility." Jeffrey E. Garten of the Yale School of Management remarked, "the U.S. is reinforcing views in France and China, among others, that the entire monetary system is a political toy of a dysfunctional U.S. political system."
Martin Feldstein notes the Obama administration's aim to monetize the debt is "a dangerous gamble with only a small potential upside benefit and substantial risks of creating asset bubbles that could destabilise the global economy." Feldstein continues, "The greatest danger will then be to leveraged investors, including individuals who bought these assets with borrowed money and banks that hold long-term securities. These risks should be clear after the recent crisis driven by the bursting of asset price bubbles. Although the specific asset prices that are now rising are different from last time, the possibility of damaging declines when bubbles burst is worryingly similar."
Sarah Palin worries about the resulting inflation as well. "All this pump priming will come at a serious price. And I mean that literally: everyone who ever goes out shopping for groceries knows that prices have risen significantly over the past year or so. Pump priming would push them even higher. And it’s not just groceries. Oil recently hit a six month high, at more than $87 a barrel."
Below are some articles and videos on the Obama administration's reckless fiscal policy:
- Peter G. Peterson Foundation - collection of non-partisan articles and videos on America's growing debt problem
- Bush Deficit vs. Obama Deficit in Pictures - Heritage Foundation, March 24th, 2009
- Obama’s Spending vs Obama’s Spending Cuts — in Pictures — Heritage Foundation — April 20, 2009
- Obama Responded to Tea Parties with $100 Million in "Budget Cuts" - Rush Limbaugh - April 21, 2009
- Bam's Wise Words - New York Post, May 17, 2009
- Stop Spending Our Future
- $78.8 Trillion; United States Debt Obligations exceed world GDP; Monetary Collapse Looming? February 16, 2009