On Monday, President Obama convened the Fiscal Responsibility Summit, a 3 hour ‘brainstorming session’ with 130 members of Congress, administration officials ‘community leaders.’ At the end of it, Obama made a statement to the press, declaring the federal deficit to be a serious problem that must be tackled head on because America cannot afford trillion dollar deficits going on indefinitely. He then stated his goal of cutting the federal deficit in half by 2011 (or was it 2013?).
While on the face of it this is an encouraging development, in reality, it was nonsense. For right now the biggest single cause of rampant federal spending is Barack Obama himself. Though Obama inherited a big deficit from George Bush thanks in large part to his $700 billion TARP bailout bill, at this point in time George Bush is history and President Obama is making the decisions. Between an $800 billion pork barrel spending bill of dubious economic value, another $2 trillion TARP II bank bailout bill and a further ‘stimulus’ package hinted at for the summer, Obama is doing everything in his power to ratchet up government spending.
What he was doing on Monday was creating political cover. It was a choreographed stage show aimed at that portion of the American electorate whose political attention span is short. This significant group of people will have vaguely heard that he is ‘stimulating’ the economy, which CNN tells them is a good thing; they have now heard that he is fighting the deficit, which his political opponents say is a good thing; and so they will conclude that Obama has got all the bases covered, not stopping to ponder the fact that one action is a contradiction of the other. This is Obama’s political calculus.
And we have to give credit where credit is due. It is good politics (though bad policy), and will have a good political effect - at least in the short term.
In the campaign, candidate Obama made a practice of telling every group of people what they wanted to hear, reassuring them, but only in vague terms that didn’t pin him down to anything concrete. Because he was such a blank slate, it worked. Everybody read into Obama what he or she wanted him to say. Hope and change was whatever you wanted it to mean.
Unfortunately for him, this strategy will cease to be effective soon because his slate is being filled up by an ever-increasing track record of concrete policy decisions that he must now justify and defend.
With
regard to one of his policies, the federal debt: it is increasing exponentially,
and if today’s low interest rates and stimulus spending ever succeed in
generating whip-back inflation, it will be increasing even faster than that.
When the federal debt inevitably hits the wall, a very large number of painful
spending cuts will have to be implemented quickly. At that point, he won’t be
able to have it both ways any more. He must choose, and then explain his choice
to the voters.
Democrats used to be called "Tax and Spend" liberals. Now, with Obama, we can say there has been true "Change". Now they are "Spend and Tax" liberals.
Posted by: WiseGuy | February 25, 2009 at 04:40 PM