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“The history of public debt is the very history of national power: how it has been won and how it has been lost. … But never, outside periods of total war, has the debt of the world’s most powerful states grown so immense. Never has it so heavily threatened their political systems and standards of living. Public debt cannot keep growing without unleashing terrible catastrophes.” Jacques Attali – French economistPrecious Money and Years Squandered by President Obama
America’s debt and the debt of virtually all democracies is the issue of our times. President Obama intentionally refused to confront our dangerous debt and, instead of focusing on reducing the debt, has wasted more money on stimulus packages, unions and Wall Street bailouts. He squandered many precious years by not addressing the greatest threat to America – our enormous debt.
Early in his administration, he acknowledged the debt could cause a double-dip recession. In November 2009, he stated, "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."
Again, in February 2010, Obama said, "It keeps me awake at night, looking at all that red ink. … The only way that we are going to fix it is if both parties come together and start making some tough decisions about our long-term priorities."
Rather than reducing the debt, President Obama remained hell-bent on his agenda and attained a very expensive healthcare legislation. This added to the debt. Disgustingly, the law is so poorly written and laden with bureaucratic rules that it has stopped American employers from hiring. This also increases the debt.
Again, in 2010, President Obama created a bipartisan debt commission, which made recommendations - cutting spending and tax reforms. Again, the president ignored the debt and the commission’s recommendations.
In his 2011 State of the Union address, the President made a reference to the debt as well as a few of suggestions, but no concrete proposals. Ruth Marcus of the Washington Post proclaimed: “State of the Union is …. Leaderless”
The President’s 2011 budget proposed increased spending to 25% of GDP, a historic peace-time high. Dana Milbank of the Washington Post accused the President of “kicking the can (debt) one more time.”
Obama’s budget proposal is a remarkably weak and timid document. He proposes to cut only $1.1 trillion from federal deficits over the next decade – a pittance when you consider that the deficit this year alone is in the neighborhood of $1.5 trillion. The president makes no serious attempt at cutting entitlement programs that threaten to drive the government into insolvency.
Milbank was contemptuous of the proclamations by Obama’s cabinet officials:
As administration officials came out to defend the indefensible budget Monday, they had little to work with beyond clichés.
Jack Lew, the White House budget director, obfuscated by saying nothing of substance:
"The budget that we sent to Congress today is a responsible plan that shows that we can live within our means and we can also invest in the future."
In March 2010, Senator Manchin, (D) of West Virginia, lambasted the president for not leading on reducing spending. [Read: http://www.freedomworks.org/blog/teda/dem-sen-joe-manchin-obama-has-failed-to-lead-on-sp]
"Why are we doing all this when the most powerful person in these negotiations - our president - has failed to lead this debate or offer a serious proposal for spending and cuts that he would be willing to fight for?" asked Manchin. "How does that make sense?"
He went on to say that "this debate will be decided when the president leads these tough negotiations. And, right now that's not happening."
Then the president unilaterally spent millions of additional dollars on his Libyan war to remove Colonel el-Qaddafi.
Congressman Paul Ryan (R, Wisconsin) presented the only comprehensive plan to reduce the debt, which the president ridiculed. Worse, the president invited Ryan to listen to the president to demagogue Ryan’s Path to Prosperity. What a gentleman! What a statesman! What a leader!
For whatever reason, the President responded with a new budget of 22% of GDP. Using double-speak, the President used different time periods and budget gimmicks to obfuscate the proposed cuts.
John Taylor of the Hoover Institute and Stanford University began a Wall Street Journal article deploring the confusing language in regards to the national debt. Taylor politely does not accuse the President of political double-speak:
“Americans are clamoring for a fact-based debate about the budget, but the numbers they're hearing from Washington are terribly confusing.”
But double-speak it is:
Speaking at a Facebook town hall meeting here on Wednesday, President Obama sometimes talked about saving $4 trillion, at other times $2 trillion, and he varied whether it was over 10 years or 12 years, never mentioning any one year.”
It is abundantly clear; universal health care, strengthened unions, Wall Street bailouts, green energy and increased environmental regulations are Obama’s agenda. All have retarded America’s economic growth. Additionally, the President’s scheme for debt-reduction was evident, a new value-added tax (VAT), which would also stifle economic expansion.
The inchoate campaign for a VAT tax was stopped mostly by the Tea Party activists. Most independent voters and Tea Party activists know tax increases will further impair America’s economy, once the greatest in history. Further, they have experienced that raising taxes and promising spending cut is a false bargain. Read my Grand Bargain blog.
Because the independent voter and the Tea Party activists demanded spending cuts, President Obama, Democrats and many Republicans were forced to cut $2 trillion dollars of spending.
Now, America must focus on economic growth, which will means more spending cuts, and reforming entitlements. Read The Right Way to Balance the Budget.
Again, the French economist Attali describes what all democracies must do: [Read: http://www.freedomworks.org/blog/teda/the-west-and-the-tyranny-of-public-debt]
The West needs to wake up now, shake off the yoke of public debt, and take the path of liberty. That path is long and difficult. It means balancing budgets and stabilizing the financial sector. But the great reward will be a return to confidence and growth—for those who put in the effort, and for those with the audacity to see it through.
The recent debt-ceiling crisis is just the first skirmish in a long and prolonged struggle to restore America’s greatness, which will determine the freedom and prosperity of every American.