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Morning Bell: The Question That Didn't Get Asked

Posted By Conn Carroll On April 30, 2009 @ 9:15 am In Ongoing Priorities | Comments Disabled

Yesterday before President Barack Obama’s 100 days news conference, the Commerce Department released data showing that the U.S. economy shrank at an annual rate of 6.1% in the January-March quarter [1]. This comes on top of a report [2] from the Bureau of Labor and Statistics released earlier this month showing that the U.S. has lost more than 1.2 million jobs since President Barack Obama was sworn into office. Yet despite all this bad economic news Obama claimed [3] that his stimulus $787 billion deficit spending stimulus package “has already saved or created over 150,000 jobs.” While pressing Obama on a variety of national security questions, the White House press corps failed to ask: “Mr. President, if your administration is already claiming credit for jobs created in this economy, when can the American people start holding you accountable for all the jobs lost?”

Obama’s desire to escape all accountability for his economic policies was also on display earlier in the day when he told a town hall in Missouri: “We inherited a $1.3 trillion deficit. That wasn’t me.” [4] Oh really? The Associated Press fact checked [5] Obama’s claim and reports:

Congress controls the purse strings, not the president, and it was under Democratic control for Obama’s last two years as Illinois senator. Obama supported the emergency bailout package in President George W. Bush’s final months — a package Democratic leaders wanted to make bigger.

He’s persuaded Congress to expand children’s health insurance, education spending, health information technology and more. He’s moving ahead on a variety of big-ticket items on health care, the environment, energy and transportation that, if achieved, will be more enduring than bank bailouts and aid for homeowners.

The nonpartisan Committee for a Responsible Federal Budget estimated his policy proposals would add a net $428 billion to the deficit over four years, even accounting for his spending reduction goals. Now, the deficit is nearly quadrupling to $1.75 trillion.

The cost of Obama’s massive spending explosion is about to hit home. The Treasury Department announced yesterday [1] that it is going to step up the issuing of 30-year bonds to cover the hundreds of billions of dollars the Obama administration is spending on bailouts and stimulus. A special advisory committee to the Treasury then warned, “Treasuries will probably not receive the same favorable demand treatment from either source over the coming quarters.” Translation: foreign and domestic investors are going to demand significantly higher interest rates in exchange for buying the avalanche of new bonds. [1]

Higher interest rates will strangle our economic recovery. Congress and the President should do the opposite of what they apparently intend: They should cut taxes on productive activities, not increase them. They should cut spending, not increase it. [6] And rather than increase government spending with new entitlements like a government-run health plan, they should reduce future entitlement benefits to give credit markets some confidence that U.S. policymakers have not entirely abandoned fiscal discipline.

Quick Hits:


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URL to article: http://blog.heritage.org/2009/04/30/morning-bell-the-question-that-didnt-get-asked/

URLs in this post:

[1] the U.S. economy shrank at an annual rate of 6.1% in the January-March quarter: http://www.nytimes.com/2009/04/30/business/economy/30econ.html?_r=1&ref=todayspaper

[2] report: http://www.bls.gov/news.release/empsit.nr0.htm

[3] claimed: http://www.nytimes.com/2009/04/29/us/politics/29text-obama.html

[4] “We inherited a $1.3 trillion deficit. That wasn’t me.”: http://www.omaha.com/index.php?u_page=3954&u_sid=10622447

[5] fact checked: http://news.yahoo.com/s/ap/20090429/ap_on_go_pr_wh/us_fact_check_obama

[6] They should cut taxes on productive activities, not increase them. They should cut spending, not increase it.: http://www.heritage.org/Research/Economy/wm2257.cfm

[7] the harsh interrogation techniques he has banned might have yielded useful information: http://www.latimes.com/news/nationworld/washingtondc/la-na-obama-assess30-2009apr30,0,5309624.story

[8] relatively mild: http://www.latimes.com/features/health/la-sci-swine-reality30-2009apr30,0,3606923.story

[9] as the U.S. military starts to withdraw from urban areas.: http://blog.heritage.org http://www.washingtonpost.com/wp-dyn/content/article/2009/04/29/AR2009042901470.html

[10] India said it will not accept any cap on its development in the name of climate change: http://www.business-standard.com/india/news/india-says-it-cannot-acceptcapdevelopment/59707/on

[11] objecting to the deal Majority Leader Harry Reid made with Sen. Arlen Specter: http://blog.heritage.org http://thehill.com/leading-the-news/top-dems-rebel-on-specter-2009-04-29.html

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