Obama’s Debt Position Changes
The current debt ceiling crisis has led to much confusion.
In today’s high-pitched economic hysteria, the words “debt” and “deficit” are often used interchangeably by those who haven’t the slightest clue as to the difference. The public seems insanely confused when the president says he’s cut the “deficit” in half while Congressional Republicans rail that his administration is adding another trillion to the near $17 trillion “debt” that will grow by another trillion if Democrats have their way. Huh?
Being one who needs a children’s book to understand economics, I will explain the debt, deficit and debt ceiling in a little scenario to which we all can relate.
You receive a VISA credit card in the mail based on your credit score, salary, the fact that you’re about to graduate from high school or because you have a pulse. Your charge limit (DEBT CEILING) is $6,000, so you immediately start speed charging: shoes, an iPad, a flat-screen TV. At the end of the month, you owe $3,000, which you can’t pay off because you only earn $3,600 a month. You pay the minimum so you can fly to Maui. VISA said there’s $6,000 to spend, remember?
Next month, your bill is $4,659 because you traveled, charged gas, ate out a bunch and bought gifts. Those new charges you don’t pay are your DEFICIT. A 15.24 percent interest rate (APR) has been added to your balance or DEBT. You again pay the minimum payment, now larger with interest, and again purchase more items adding to your DEFICIT, which, unpaid, becomes DEBT that keeps growing. After a year of your minimum payment/charging spree, a letter comes. Congratulations! Your credit limit (DEBT CEILING) has been raised to $8,000. Over time your DEBT becomes $40,000 (plus interest). The end.
The DEFICIT = shortfall (monthly/yearly). The DEBT = borrowed money (credit card charges) + DEFICIT + interest.
So much hypocrisy reigns today. Republicans who balk at raising the debt ceiling are sneered at, but March 20, 2006, then Sen. Barack Obama spoke on the Senate floor:
“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. … 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.”
In March of this year, CBS News reported that “less than two months into President Obama’s second term, new numbers show the national debt increased by more than $6 trillion since he took office.
It’s the largest increase to date under any U.S. president. During the eight-year presidency of George W. Bush, the debt soared by $4.9 trillion. On January 20, 2009, the day Mr. Obama took office, the debt stood at $10.626 trillion. The latest posting reflects an increase of over $6 trillion.”
Has Obama cut the DEFICIT by half? Yes. Good. It was at an historic high. And as he’s repeated for five years, he did inherit a bad economy. But is he trying to balance a budget or pay down our DEBT? No.
In President Obama’s own words Nov. 24, 2011, Fargo, N.D.:
“The problem is that the way Bush has done it over the last eight years is to take out a credit card from the Bank of China in the name of our children, driving up our national debt from $5 trillion for the first 42 presidents. Number 43 added $4 trillion by his lonesome, so that we now have over $9 trillion of debt that we are going to have to pay back – $30,000 for every man, woman and child. That’s irresponsible. It’s unpatriotic.”
Why then, with almost $17 trillion DEBT today is our president still charging on that Bank of China VISA?
Agreed, Mr. President, “America has a debt problem and a failure of leadership.” The buck stops where?