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Long term debt unsustainable: Obama states the obvious

Discussion in 'Political Zone' started by sbark, May 15, 2009.

  1. sbark

    sbark Well-Known Member Zone Supporter

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    http://www.bloomberg.com/apps/news?pid=20601087&sid=aJsSb4qtILhg&refer=worldwide

    Obama Says U.S. Long-Term Debt Load ‘Unsustainable’ (Update2)

    By Roger Runningen and Hans Nichols
    May 14 (Bloomberg) -- President Barack Obama, calling current deficit spending “unsustainable,” warned of skyrocketing interest rates for consumers if the U.S. continues to finance government by borrowing from other countries.
    “We can’t keep on just borrowing from China,” Obama said at a town-hall meeting in Rio Rancho, New Mexico, outside Albuquerque. “We have to pay interest on that debt, and that means we are mortgaging our children’s future with more and more debt.”
    Holders of U.S. debt will eventually “get tired” of buying it, causing interest rates on everything from auto loans to home mortgages to increase, Obama said. “It will have a dampening effect on our economy.”

    Did someone accidentially insert a campaign speech into the teleprompter?

    .......will be his reasoning for need of Cap & Trade taxation, and a myriad of tax increase bills.......

    for democrats, its never been a "spending problem", its always been a too small inflow to the Treas. problem. Business & Indiv. exist for 1 reason: To fund Govt based agenda. Govt spending begats Govt control & power--to which it has become an addiction---and with any addiciton the appetite for more is endless...........
  2. sbark

    sbark Well-Known Member Zone Supporter

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  3. Jordan55

    Jordan55 Active Member

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    Sbark, remember this is the Entitlement cult of Obama, everyone is looking for the hand out Big Government is going to take care of us all. In fact I believe they are the only ones hiring last I heard 66,000 new Government jobs the stimnulus package is turning the economy around. I think something is wrong with this picture.
    I only hope we have we have found the respect we so desperately sought from the other nations in the world. I feel so much better about my country.
    Right!!!!!
  4. JBond

    JBond Well-Known Member

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    Obama, the mighty community organizer, has again predicted his own failure. Of course his idiotic spending spree is going to lead to bad things in our economy. Everyone include the CBO told him so.

    The question now becomes why did he do it knowing the severe negative consequences it would have on our economy long term. I am really surprised this is not getting more attention. It is rare for a president to admit his policies and ideas are failures so shortly after implementing them.

    Obama Says U.S. Long-Term Debt Load ‘Unsustainable’ (Update2)

    http://www.bloomberg.com/apps/news?pid=20601087&sid=aJsSb4qtILhg&refer=worldwide

    By Roger Runningen and Hans Nichols

    May 14 (Bloomberg) -- President Barack Obama, calling current deficit spending “unsustainable,” warned of skyrocketing interest rates for consumers if the U.S. continues to finance government by borrowing from other countries.

    “We can’t keep on just borrowing from China,” Obama said at a town-hall meeting in Rio Rancho, New Mexico, outside Albuquerque. “We have to pay interest on that debt, and that means we are mortgaging our children’s future with more and more debt.”

    Holders of U.S. debt will eventually “get tired” of buying it, causing interest rates on everything from auto loans to home mortgages to increase, Obama said. “It will have a dampening effect on our economy.”

    Earlier this week, the Obama administration revised its own budget estimates and raised the projected deficit for this year to a record $1.84 trillion, up 5 percent from the February estimate. The revision for the 2010 fiscal year estimated the deficit at $1.26 trillion, up 7.4 percent from the February figure. The White House Office of Management and Budget also projected next year’s budget will end up at $3.59 trillion, compared with the $3.55 trillion it estimated previously.

    Two weeks ago, the president proposed $17 billion in budget cuts, with plans to eliminate or reduce 121 federal programs. Republicans ridiculed the amount, saying that it represented one-half of 1 percent of the entire budget. They noted that Obama is seeking an $81 billion increase in other spending.

    Entitlement Programs

    In his New Mexico appearance, the president pledged to work with Congress to shore up entitlement programs such as Social Security and Medicare. He also said he was confident that the House and Senate would pass health-care overhaul bills by August.

    “Most of what is driving us into debt is health care, so we have to drive down costs,” he said.

    Obama prodded Congress to pass restrictions on credit-card issuers, saying consumers need “strong and reliable” protection from unfair practices and hidden fees.

    “It’s time for reform that’s built on transparency, accountability, and mutual responsibility, values fundamental to the new foundation we seek to build for our economy,” the president said.

    Obama called on Congress to send to him by May 25 a bill that would clamp down on what he says are sudden rate increases, unfair penalties and hidden fees. He also wants the measure to strengthen monitoring of credit-card companies.

    House Bill

    The U.S. House of Representatives passed the credit-card bill last month after adding a provision requiring banks to apply consumers’ payments to balances with the highest interest rates first. The bill also imposes limits on card interest rates and fees.

    The Senate continued debating its version of the bill today. It would require credit-card companies to give 45 days’ notice before increasing an interest rate. It would prohibit retroactive rate increases on existing balances unless a consumer was 60 days late with a payment.

    The president said Americans have been hooked on their credit cards and share some blame for the current system. “We have been complicit in these problems,” he said. “We have to change how we operate. These practices have only grown worse in the midst of this recession.”

    The American Bankers Association, which represents card issuers, has warned lawmakers and the Obama administration against taking punitive action or setting requirements that are too stringent. Doing so, the lobby group says, would limit consumer credit and worsen a credit crunch.

    Obama said that restrictions “shouldn’t diminish consumers’ access to credit.”

    Uncollectible Debt

    Uncollectible credit-card debt rose to 8.82 percent in February, the most in the 20 years that Moody’s Investors Service Inc. has kept records. Lawmakers have said they’re under increasing pressure from constituents to respond to rising interest rates and abrupt changes to consumers’ accounts.

    Obama held a White House meeting last month with executives from the credit-card industry, including representatives from Bank of America Corp. and American Express Co. Afterward, he told reporters that credit-card issuers should be prohibited from imposing “unfair” rate increases on consumers and should offer the public credit terms that are easier to understand.

    “The days of any time, any increase, anything goes -- rate hike, late fees -- that must end,” Obama said today at Rio Rancho High School. We’re going to require clarity and transparency from now on.”

    He also said the steps he has taken to stimulate the economy and start the debate on overhauling the health-care system are beginning to take effect.

    ‘Beginning to Turn’

    “We’ve got a long way to go before we put this recession behind us,” Obama said. “But we do know that the gears of our economy, our economic engine, are slowly beginning to turn.”

    Taking questions from the audience, Obama repeated his stance that he wants legislation to overhaul the health-care system finished before the end of the year, saying it is vital to the economy.

    Health-care costs are driving up the nation’s debt and burdening entitlement programs such as Medicare, the government- run insurance program for those 65 and older and the disabled.

    The programs’ trustees reported May 13 that the Social Security trust fund will run out of assets in 2037, four years sooner than forecast, and Medicare’s hospital fund will run dry by 2017, two years earlier than predicted a year ago.

    To contact the reporters on this story: Roger Runningen in Albuquerque at rrunningen@bloomberg.net; Hans Nichols in Washington at =1871 or hnichols2@bloomberg.net
  5. Rogah

    Rogah Well-Known Member

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    That was the exact reaction I had - almost literally word for word. :D
  6. ABQCOWBOY

    ABQCOWBOY Moderator Staff Member

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    I was actually at this town hall meeting. He took questions but he did not take mine. I thought he had a pretty easy time of it. No questions that really forced the tough response but I do give him credit. He's very good at misdirection and deflecting potential issues. In these town hall meetings, you don't get the opportunity to follow up on your question so lets say you ask the questions:

    Is your Administration going to continue the practice of Enhanced Interrogations Techniques?

    He can answer it as such:

    We are aware that this is an issue and we are doing everything possible to keep a close watch on how our Intelligence Agencies manage these types of techniques but listen....... It's a tough job we all have to do there. There's no easy answer but if you stick by me, together, we can usher in a new age of peace and stability.

    Something like this is pretty typical of the kinds of answers he gave. It doesn't really answer the question asked but you have no opportunity to follow up with it and force an answer. What you get instead is wild applause and he moves on.

    It is what it is.

    BTW, there were probably 50 to 75 people lining the side of the street protesting him at the school.
  7. arglebargle

    arglebargle Well-Known Member

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    This is a flaw of both the political parties, not just the Dems. No modern Republican administration has ever left office with less debt or smaller government. The previous administration extolled the virtue of having debt: While borrowing heavilly to finance the things they wanted.

    I have little issue with you old line fiscal conservatives. The questions of 'How much does it cost? And who's going to pay for it?" are always valid.

    But borrow and spend just puts off the repayment to someone else's tenure. At some point, it will have to be paid, and that might come with increased taxes.
  8. ABQCOWBOY

    ABQCOWBOY Moderator Staff Member

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    That's a very sound post Arglebargle, at least IMO.
  9. DFWJC

    DFWJC Well-Known Member Zone Supporter

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    Wow, that's comical.
    He adds 100% more debt than any President in history, then comes back and complains about the cost of it.
  10. theogt

    theogt Surrealist Zone Supporter

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    Of course the current deficit is unsustainable. But we're not going to continue running the current deficit, because (1) spending at this rate will not continue and (2) revenues will increase.

    So, it's a non-issue.
  11. theogt

    theogt Surrealist Zone Supporter

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    Just for those that really don't have a grasp on US debt historically:

    [IMG]
  12. ABQCOWBOY

    ABQCOWBOY Moderator Staff Member

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    I would not go so far as to say that it's a non-issue. I would say that it will continue to go on until 2010 gets here. At that point, much of the Congressional seating could change and the Presidents ability to force policy could end. If that happens, then you have to look at how much we've spent in relation to growth from 2008. That will tell you how far we've sunk or how much we've improved.
  13. ABQCOWBOY

    ABQCOWBOY Moderator Staff Member

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    .

    It is at it's highest since the Marshall Plan days. Keep in mind that we were rebuilding most of the world at that time.
  14. zrinkill

    zrinkill Diamond surrounded by trash

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    Its easy to see in what years our Military was weakened.

    :laugh2:
  15. Doomsday101

    Doomsday101 Well-Known Member

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    If it is unsustainable try cutting back on spending and significant cuts in the budget
  16. ThaBigP

    ThaBigP New Member

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    Fantastic chart, Theo. Now....PLEASE, for the love of God and all that is holy, show the other books...the unfunded liabilities...which are now up to nearly 100 Trilliion dollars. Which, by the way, happens to be about 1000% of GDP. That figure is, of course, based on a ~$10 Trillion dollar GDP...which unfortunately is receeding by the second.
  17. ThaBigP

    ThaBigP New Member

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    By the way, the article could just have truthfully been entitled "Obama slams Obama spending policies".
  18. theogt

    theogt Surrealist Zone Supporter

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    It's a non-issue in that no one wants to or is planning on sustaining these levels. So, it's just stating the obvious.

    He's not slamming his own spending policies (in fact, the biggest drivers of the deficit were enacted or began in motion before Obama was even in office), since he has no intentions of continuing.

    Think of it this way -- it's like saying "chemotherapy is unsustainable." Well, of course it's unsustainable over the long-term. You'd die. But it's an inevitable and necessary treatment in the short-term.
  19. theogt

    theogt Surrealist Zone Supporter

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    What are earth you talking about?

    This is a chart showing US outstanding debt.
  20. Temo

    Temo Active Member

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    That's silly to say that the true debt figure is 100 Trillion. If it were truely that bad, then why not just print up another trillion? Another 10 trillion? I mean if we're already 100 in the hole!

    Unfunded liabilities have a place, but it's certainly not 100 trillion.

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