Profligate and Hypocrite

Almost all American citizens, with the exception of the very least informed, low-information voter, already know president Obama has added a very large burden to America’s youth with his profligacy. However, moving beyond this tragic fact to that of how a president should step up above the political fray and show leadership on budget issues, Obama has time and time again been a failure. The debt keeps rising and the politics around the issue are poisoned.  One reason for the later is Obama has also shown great hypocrisy towards this serious matter.

This behavior often takes the form of either blaming others for his profligacy or ignoring the facts about our nation’s growing insolvency. For example, the need to increase the Federal Government’s debt ceiling is coming up again and Obama has yet to demonstrate real leadership.

Senator Obama rightly criticized president G W Bush in 2006 and also voted against the raising of the debt ceiling. This seemed to be a principled stand.

However, when his turn as president and national leader came and it was time to raise our Federal Government’s debt ceiling Obama spoke of the situation as if it was a non-presidential issue, he seemed to be annoyed at even becoming involved in the discussion and debate. He went even further and stated that if congress does not vote for the increase, they are somehow being unpatriotic. I ask him, was he being unpatriotic in 2006?

January 2017 cannot come fast enough!

 Obama in 2006

The full text of his remarks in the Senate on 16 March 2006 are as follows:

Mr. President, I rise today to talk about America’s debt problem.

The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies.

Over the past 5 years, our federal debt has increased by $3.5 trillion to $8.6 trillion. That is “trillion” with a “T.” That is money that we have borrowed from the Social Security trust fund, borrowed from China and Japan, borrowed from American taxpayers. And over the next 5 years, between now and 2011, the President’s budget will increase the debt by almost another $3.5 trillion.

Numbers that large are sometimes hard to understand. Some people may wonder why they matter. Here is why: This year, the Federal Government will spend $220 billion on interest. That is more money to pay interest on our national debt than we’ll spend on Medicaid and the State Children’s Health Insurance Program. That is more money to pay interest on our debt this year than we will spend on education, homeland security, transportation, and veterans benefits combined. It is more money in one year than we are likely to spend to rebuild the devastated gulf coast in a way that honors the best of America.

And the cost of our debt is one of the fastest growing expenses in the Federal budget. This rising debt is a hidden domestic enemy, robbing our cities and States of critical investments in infrastructure like bridges, ports, and levees; robbing our families and our children of critical investments in education and health care reform; robbing our seniors of the retirement and health security they have counted on. Every dollar we pay in interest is a dollar that is not going to investment in America’s priorities. Instead, interest payments are a significant tax on all Americans — a debt tax that Washington doesn’t want to talk about. If Washington were serious about honest tax relief in this country, we would see an effort to reduce our national debt by returning to responsible fiscal policies.

But we are not doing that. Despite repeated efforts by Senators Conrad and Feingold, the Senate continues to reject a return to the commonsense Pay-go rules that used to apply. Previously, Pay-go rules applied both to increases in mandatory spending and to tax cuts. The Senate had to abide by the commonsense budgeting principle of balancing expenses and revenues. Unfortunately, the principle was abandoned, and now the demands of budget discipline apply only to spending. As a result, tax breaks have not been paid for by reductions in Federal spending, and thus the only way to pay for them has been to increase our deficit to historically high levels and borrow more and more money. Now we have to pay for those tax breaks plus the cost of borrowing for them. Instead of reducing the deficit, as some people claimed, the fiscal policies of this administration and its allies in Congress will add more than $600 million in debt for each of the next 5 years. That is why I will once again cosponsor the Pay-go amendment and continue to hope that my colleagues will return to a smart rule that has worked in the past and can work again.

Our debt also matters internationally. My friend, the ranking member of the Senate Budget Committee, likes to remind us that it took 42 Presidents 224 years to run up only $1 trillion of foreign-held debt. This administration did more than that in just 5 years. Now, there is nothing wrong with borrowing from foreign countries. But we must remember that the more we depend on foreign nations to lend us money, the more our economic security is tied to the whims of foreign leaders whose interests might not be aligned with ours.

Increasing America’s debt weakens us domestically and internationally. Leadership means that “the buck stops here.” Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.

I therefore intend to oppose the effort to increase America’s debt limit.[1]

Obama’s more recent hypocritical position during the last big fight over the debt limit.

PRESIDENT OBAMA: If the world sees America not paying its bills, then they will not buy debt, Treasury bills from the United States, or if they do, they’ll do it at much higher interest rates. That means somebody wanting to buy an F-150 will have to pay much higher interest rates eventually, which means you will sell less cars. That’s just one example of how profoundly destructive this could be. This is not some abstract thing.

And this is important: Raising the debt ceiling is not the same as approving more spending, any more than making your monthly payment adds to the total cost of your truck. You don’t say, well, I’m not going to pay my bill, my note for my truck because I’m going to save money. No, you’re not saving money. You already bought the truck, right? You have to pay the bills. You’re not saving money. You might have decided at the front end not to buy the truck, but once you’ve bought the truck you can’t say you’re saving money just by not paying the bills. Does that make sense?

So raising the debt ceiling, it doesn’t cost a dime. It does not add a penny to our deficits. All it says is you’ve got to pay for what Congress already said we’re spending money on. If you don’t do it, we could have another financial crisis.[2]

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[1] Congressional Record.   “Remarks by Sen. Barack Obama.” 16 March 2006.
[2] Schwartz, I. (Ed.). (2013, September 20). Obama: “Raising The Debt Ceiling, It Doesn’t Cost A Dime” Retrieved March 30, 2015, from http://www.realclearpolitics.com/video/2013/09/20/obama_raising_the_debt_ceiling_it_doesnt_cost_a_dime.html

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5 thoughts on “Profligate and Hypocrite

  1. I suspect the political class knows as well as we do that this debt will never be repaid. We’re not Japan yet, but we’re headed that way, and there’s simply no will–in either party–to do anything about spending.

    When the crisis comes, they’ll be no more ready than they were in 2007, but, this time, I don’t think people will stand for another bailout of the banking sector. Obama is simply hoping that the crisis occurs after he’s left office.

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  2. Indeed, the United States’ debt will never be repaid but also looming are the outstanding liabilities for America’s beloved social programs. Funding these behemoths is getting to be more untenable each year and over the long term, these programs will force an even larger debt burden upon America.

    Going out on a limb here — my prognostication is the world’s financial system will collapse under the weight of the massive sovereign debt built up during recent times and we will forced to a Bretton Woods ‘reset event’. What happens here is anyone’s guess but likely, the dollar hegemony over the world is over!

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