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Even his own Budget Commission Co-Chairs Erskine Bowles and Alan Simpson strongly disagree with him. Apparently they don't know what the heck they are talking about in President Obama's distinguished economic opinion.
If we don't have a 'debt crisis' today since we have added $7 trillion in national debt in 4 years under President Obama, after adding $6 trillion in 8 years under President Bush 43, when will we have a debt crisis then, Mr. President?
Without overstating our current problems and conflating them with some of the great crises of the past, here's some quotes we might have been able to expect from President Obama in the same tone and vein had he been President during each of them:
- 'We have nothing to fear. Period.'-1933
- 'The Soviets are not putting nuclear missiles in Cuba.'- 1962
- 'Four score and seven years ago, nothing much of importance happened'.-1863
In 2008, then-candidate Senator Barack Obama called the debt buildup under W 'unpatriotic'. We agreed with then-candidate Barack Obama.
We disagree strongly with now-President Obama in his assessment of the current debt 'crisis' we are now experiencing and exacerbating to the tune of around $3.87 billion...per day. Somehow, what was previously 'unpatriotic and unconscionable' in 2008 is now ok and 'not a crisis'.
Some people would go so far as to call that 'hypocrisy'. Call it whatever you want.
Let's take a look at why adding on more debt really is a 'problem' if not a full-blown 'crisis' today. Not many people ever really focus on it because it is so obtuse and confusing to most people.
- Hardly any republic, empire, monarchy or dictatorship (as in 'none') has been able to withstand excessive amounts of debt accumulation over the past 800 years and survived as strong powers in the aftermath. That is not just us fulminating; that is the conclusion of liberal economic historian Harvard Professor Kenneth Rogoff in his book, 'This Time Is Different' which we highly recommend reading.
- National debt is now being funded with short-term bonds of anywhere from 2-5 years for the most part at extremely low historical levels of 2% or so. What happens when it has to be rolled-over and refinanced at more historically 'normal' rates of just 5% or 6%? Right...annual interest costs triple overnight.
- Excessive debt almost always leads to one or more of the following outcomes in human history regardless of race, creed, color or national prestige or educated levels: inflation, depreciation of the national currency and high interest rates presuming that foreign sovereign nations are willing to loan money to the afflicted nation at any interest rate, that is.
- Interest on national debt is really 'wasted' spending on past expenditures by a nation. The people or projects who have been funded by past deficit-financing have already consumed those funds in the past, up to 20-30 years ago in some cases. Those interest payments could have been used for future spending on the children, poor, elderly or the infirm except for the fact that they have already been committed to retiring old debt.
We are not among those who see national debt as being unacceptable under every circumstance. If space aliens came to attack the entire world as we see in movies such as 'Independence Day', we are all for borrowing money up to 10,000% of GDP and printing up as much money as Ben Bernanke and the Fed can make up every day at work to be able to defeat them and prevent them from eating us all up or vaporizing everyone with their rayguns.
We also recognize the crucial difference between borrowing money for legitimate 'investment' in making America better for all of us versus borrowing for consumption purposes. When the Erie Canal was built in New York in the early 19th century, almost all of the available investment capital, both public and private, in America was soaked up to fund this critically important infrastructure project that sought to link the trade of the Midwest with the New York harbor and the outside world.
GDP of the United States tripled almost as soon as the Erie Canal was completed in 1825. That was a solid, and yes, Constitutional, way of investing public money for the benefit of the nation at-large versus some narrow smaller interest.
Imagine the wealth that could be generated in America today if this humongous $17 trillion debt could be directly tied to a tripling of our current GDP from $16 trillion to $48 trillion 'virtually overnight'.
That is what 'real' domestic government 'investment' leads to....large increases in wealth, jobs and opportunities for everyone. Current borrowing for domestic consumption purposes haven't done that, has it?
Nope, we think there is a good reason why President Jefferson was so terrified by having excessive amounts of debt on the national balance sheets. President Andrew Jackson hated debt so much that he drove it down to zero during his Administration.
'President Barack Obama, 44th President of the United States of America: We knew Thomas Jefferson and Andrew Jackson. You are neither of them when it comes to our national debt.'
Sadly for us and our children and their great-great-great grandchildren. Simply because they will be paying off our consumption in 2013 way into the future in 2063.