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→Background to Obama debt crisis: unsustainability
=== Background to Obama debt crisis ===
=== Background to Obama debt crisis ===
After the failure of President Obama's [[Recovery Summer|Stimulus package]], his entire [[White House]] economic team quit. Over the next several years, the deficit was projected to fall somewhat, but if discretionary spending were to stay at the same level, the deficit would not fall enough under President Obama's economic policies to stabilize debt payments. Further, the debt is projected to begin rising more rapidly under Obama's policy because of the rising costs of [[Social Security]], [[Medicare]], and [[Medicaid]].
After the failure of President Obama's [[Recovery Summer|Stimulus package]], his entire [[White House]] economic team quit. Over the next several years, the deficit was projected to fall somewhat, but if discretionary spending were to stay at the same level, the deficit would not fall enough under President Obama's economic policies to stabilize debt payments. Further, the debt is projected to begin rising more rapidly under Obama's policy because of the rising costs of [[Social Security]], [[Medicare]], and [[Medicaid]].
=== Unsustainability of Obama deficits ===
The Obama deficits are currently more than half the size of total private savings. Even before President Obama's massive increase in deficits, the national savings rate was insufficient to finance job creation (or "domestic private investment"). To sustain large deficits, the economy would require a combination of more private saving (less consumption), lower investment (less job creation), and higher borrowing from abroad.
The unsustainability of deficits tends to be triggered rapidly, as no investor wants to be the one still holding the government debt when eventual default or hyperinflation occurs.
== History of the "Debt Limit" ==
== History of the "Debt Limit" ==