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At the recent G20 summit, U.S. President Barack Obama announced that next year he would “start presenting some very difficult choices to the country,” and hoped that “these folks who are hollering about deficits and debt” would “step-up.” In any event, he was “calling their bluff.” The world would soon find out how much of the deficit talk is “real” and how much is “just politics.”
Warnings of the Coming Austerity have been a staple of Obama's rhetoric for some time. In a debate with John McCain, Obama promised to go through the federal budget “line by line” and take a “scalpel” to spending. The president-elect met in December 2008 with the nation's governors and warned them that a nation facing “difficult times” would have to make “hard choices.”
Last year, as he was pushing a huge stimulus package, the president called for his cabinet departments to collectively cut $100 million out of their appropriation requests to Congress. This year, even as he was pushing his expensive health care bill, Obama also called for a spending freeze of much discretionary spending.
Obama may speak of tough choices but he has been remarkably unwilling to make them, or to force his close allies to do so. Democrats structured the stimulus bill to help prop up public employee unions and Obama continues to plead for more stimulus. The president angrily lashed out at automobile debt holders, including state pension funds, that complained he was giving the United Auto Workers a sweetheart deal.
Obama could have shelved his expensive health care reform in these tough economic times, focused on real job creation, and tried again in a second term, on the back of a recovery. Instead, he used a variety of accounting tricks to make his health care reform look affordable and used the brute power of the presidency to push it through. He's currently scolding private insurance companies for hiking their premiums to account for greater risk – risk caused by his reforms.
Make no mistake, Obama is right when he says that he inherited an awful economy from President George W Bush. However, his reaction to this at the time was not to make “difficult choices” to restore the nation to fiscal sanity. Instead, he intentionally made the situation almost immeasurably worse.
Now, he says that he wants members of the other party to make tough choices. What he means by that is that he wants them to vote for tax increases (coupled with cosmetic spending cuts) on top of those that are already kicking in with the expiry of the Bush tax cuts. The president, in other words, wants Republican to take the hit for the Democrats' catastrophic mismanagement of the already mismanaged economy.
That position might not be so contemptible but for what it translates to in the world outside of politics. The real hard choices will be made by parents who have to choose between socking some money away for retirement or helping their kids to pay for college; by managers who will have to figure out which workers to lay off; and by those unemployed folks with dwindling resources, who are struggling just to keep a roof over their heads.
© RealClearPolitics.com
15 Comments
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Sarge
Due to Obama's policies, more and more people are being faced with hard choices. It's true he did inherit an awful financial mess, but he has made it much worse.
grafton
If Obama really wanted to put pressure on the wasted money he could as Spain as done and get public sector workers to take a 5% wage cut, a 5% they don’t get back until public sector spending is brought under control. No, he wouldn’t take that risk because he wants a second term in office, though in all likelihood he is going to be one of the few presidents that doesn’t get a second term.
VelvetRosetta
I have said he is no better than Bush...I to some point agree with grafton on his post and of course he wont risk not getting another term, as I have said before...no-one wants to hear the truth from the president, or any other politician, we rather hear the lies and then complain...seriously if a president were to come in and say, I can not make promises but I will do my best, blah blah blah, we wouldn't vote, but then we vote for the ones who say I will make this work, I will stop the war, I won't raise taxes,then what do we hear, more troops going to war, now the dates are not secure, ppl are obessing...now theirs the hard choices for others...good thing I did not vote for him...
Airion
A clearly partisan article with very vague, and often disingenuous analysis. He says that Obama should have waited years to push for health care reform, as if the author would have been approving of it in better economic times (he surely wouldn't). He also ignores the fact that health care reform and it's costs don't even kick in until many years down the road, long after this current slump.
He also has no idea what he actually wants Obama to do. He chides Obama for trimming budgets and freezing spending while pushing for stimulus, then goes on to say that Obama should have pushed for real job creation, which means stimulus.
tkoind2
Jeremy thanks for a great GOP point of view on things. Now how about a non-democrat, non-gop take on things.
First of all stimulus is needed to get the economy moving. We have seen very strong historical examples where stimulus, specifically programs that generate jobs, benefit recovery and pay back in the generation of downstream generation resulting from those people consuming, paying taxes and getting off public aid. This approach makes sense but you need to look at the whole picture including the downstream paybacks and not just the initial spend.
Second. With something like 40+% of the people in the US with no or inadquate health care, a solution was urgently needed. It is easy for people without such care to sit back and judge such programs, but trying being a family with no proper health care. Here too there are costs for inaction. Costs in burden upon social programs, human costs and loss of productivity by workers who should get proper care but often wait until things are worst to do so. Typical of the GOP you look only at the initial dollar figure and not at the long term value of a policy.
To be fair much more is needed and Obama has not delivered. We are bleeding money in Iraq and failing to resolve Afghanistan. Better policies are needed to resolve Afghanistan and we need to get out of Iraq.
Additionally we need to change how we do business in America. We benefit companies that take jobs abroad, and we fail to properly support the generation of small business and local economies. Investment into micro economics in the US would have very tangible near and long term benefits. This again costs money to start, but delivers return over time.
As for the corporates, we need to give them a choice, be good citizens in their home country or suffer tax consequences. Programs to generate jobs, retain industries in the US and local investment should be rewared and encouraged.
Finally cost cutting. Where it makes sense we need to be cutting spending. Go after programs that don't make sense or deliver value to society. Apply a giant Lean Sigma program to streamline everything in the government and to eliminate wasteful spending.
Taxes. Reform tax policies in the US so that the wealthly help carry a greater burden. They benefit from the labor and infrastructure of the country more than anyone does, so let them help support it more.
As for you who are so disappointed. Bottom line, GOP or Democrat are more or less the same. Neither really benefit normal working people. Both work for corporations more than the little guy. And both carry out policies that make the world both better and worst. They are a reflection in the mirror with minor differences.
If you want real change, if you want a future that is more hopeful, you need other choices that don't limit us to one of two nearly identical choices. Until you get this kind of option to choose from, not much will ever really change.
Airion
I've never understood the "Dems and Republicans are the same" thing. tkoind2, you talk about the necessity of health care reform. With Democrats we get the reform we need. With Republicans, we don't. That's a very significant difference.
Perhaps you mean there isn't much difference on economic issues, which is largely true. Bush starts to bail out the banks, Obama finishes the job. Republican presidents have done stimulus, Democrats have too.
GJDailleult
Well golly gee, why is that? Because Obama, like almost every other American politician, represents and is put in power by the Banking and Corporate welfare state that is the cause of the fiscal insanity in the first place. You really think he is allowed to make "difficult choices"? The last president who tried to was Carter and look what happened to him. The guy still has the attack dogs coming after him 30 years later.
So get ready for "Austerity", America. All you parents paying for your kids college education, all you unemployed, all you evil public sector workers. Somebody has to sacrifice to keep the welfare checks rolling in. On the other hand, you could try waking up.
tkoind2
Airion. True that there are modest differences that are often a little more beneficial for Joe Average from the Dems. But let's face facts, both parties are far too invested in the status quo to really change things for the better. Do you really see either party reforming taxes in favor of working people? Or driving domestic investment up significantly enough to put a large portion of the un and underemployed back to work? Or for that matter do you see either having substantially beneficial foreign policy that could return the US to the role of mediator and positive influence to the poor nations of the world?
It is pretty clear that neither party has the will or ability to do what is necessary to really change things for the better. Expecting one or the other party to do so is sadly a case of hopless dreaming. I wish otherwise, but show me evidence to the contrary.
Laguna
Health reform will directly stimulate economic growth. It will provide more affordable coverage with portability that does not exist now. Most importantly, it will enable the self-employed to afford coverage, doing much to stimulate the entrepreneurial sector of the US economy (very many of my US acquaintances would like to start their own business but don't want to lose their employer-sponsored insurance). Down the road will certainly come huge savings in drug costs, medical technology and other efficiencies - and perhaps even a public option, once the demonizers wander off to other topics. This is just the first step down a long road towards dragging the US healthcare system from the 19th c. to the 21st.
By the way, why is military spending never cited when conservatives kvetch about the deficit? It does, after all, compose just over 50% of discretionary spending.
Airion
Taxes already favor working people. Those who make the least pay none, those who make the most pay the most. Beyond that, Democrats favor putting more burden on the rich, Republicans favor less. Obama pushes for stimulus (domestic investment to put the unemployed back to work), Republicans including Jeremy Lott are opposing it. Democrats push for extending unemployment benefits, helping Joe Average, Republicans oppose it and call him lazy.
As for foreign policy, I believe Obama is moving the US in that direction, towards diplomacy and rebuilding trust, returning to the role your wishing for. This is reversing what Bush did. The problem is no party actually has a magic foreign relations reset button. For all the political ideals, reality and circumstances get in the way, and you have to be more realistic about what can be done and how long it might take. That said, you're obviously politically in the same space as the Democrats, whether you believe it yourself or not.
medievaltimes
I have always wondered this as well. Im all for a country having a strong defence, but it seems the US spends waaaaay too much money in this area.
Dont know if this is true, but I heard the US spends as much money on defence as the next 15 countries combined. If true, this seems pretty silly to me.
hadorison
Great leader and President.He's going to be one of the greats in American History.
alladin
Although Obama has good intensions, it sure seems that what he has been doing has actually made the American economy to become worse than what it was when Bush was president.
hudagree
Youth has been served by Obama but it is getting a bit old. The coming months till mid term: crucial.
MrDarryl
I don't listen to the predictions of people who seem to still favor Bush over anything politically democratic. They have predicted nothing correctly in the last 10 years, so why should I put much weight on their predictions now. "almost immeasurably", "What he means by that is that...", "The president, in other words,...", "Democrats’ catastrophic mismanagement...", "That position might not be so contemptible, but for what it translates to..."
I get so sick of people telling me what is going on "in other words". Get real! I know what happened and I know what's happening. Politics is tricky and it gets dirty, but it is how things get done. It takes time for folks to adjust to change, so let them do just that. Stop freaking them out, because the world is not going to end the way YOU want it to Jeremy. Just like Bush is not going to be one of the greatest presidents of all time for going after...wait for it...wait for it...