The further to the left or the right you move, the more your lens on life distorts.

Wednesday, July 27, 2011


If you have been spending time listening to President Obama and his supporters, you’d think that the President and his party were deficit hawks. In fact, in his recent prime-time address, the President intimated that he inherited the deficit mess and that he is a victim, rather than a prime perpetrator of out-of-control government spending and the deficits it creates.

Unfortunately, like much of what the President says in public, that assertion is factually challenged. According to the U.S. Treasury, the public debt when Barack Obama took office (January, 2009) stood at $6.3 trillion. Very bad to be sure. In fact, you’d think that our newly-elected deficit-hawk-in-chief would have acted to reduce it immediately, correcting the profligate ways of George W. Bush and the Democratic congress. He did not.

As of August, 2010, after 18 months in office, the public debt stood at $8.8 trillion, an increase of $2.5 trillion—one third of the total debt—in just a year and a half! In that short time, Barack Obama increased the debt more than the first 40 presidents of the United States—combined.

And now, with an election less than 15 months away, the President has become born again. His concern is a “grand bargain”—that’s a deal in which the debt ceiling is raised, taxes on “billionaires and millionaires” are collected right now, and spending cuts (“savings”) are postponed until well after the election. Convenient.

Even Senate Democrats recognize that any rise in the debt ceiling must be accompanied by equivalent spending cuts. They also recognize that taxes on “billionaires and millionaires” have fine as class warfare symbolism, but do very, very little to solve our deficit problems. Their last minute “plan” does not contain any tax increases (a good thing during a recession) but postpones budget cuts until well after the election. Convenient.

The Republicans remain wedded to the notion that a balanced budget amendment is the right way to go, even though their latest plan does not incorporate it. Hence, pushback from congressional freshmen. Oddly, the Democrats and the President are violently opposed to such an amendment. Those of us in the Center have to ask, why? After all, requirements to balance state budgets are common, and serve to keep at least a few politicians honest. Why not apply the same idea to the federal government?

It’s likely that some accommodation of the debt limit will be reached at the eleventh hour. It’s equally likely that it will not cut sufficiently, will avoid structural changes to entitlements, and will not address a restructuring of our tax code. In other words, it will be a Washington "success." For the rest of us, it will fail to provide any meaningful solution to the problems we face.