• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • National Financial Capability Month: Is President Obama Setting a Good Example?

    Newscom

    Last week, the President declared April 2013 National Financial Capability Month in an effort to encourage Americans to budget responsibly.

    This is a commendable goal. However, with the President’s budget more than two months late, it’s worth considering how the President is managing the nation’s finances:

    • He grew the national debt by more than $6 trillion—from $10.6 trillion on January 21, 2009, to $16.7 trillion on April 1, 2013. That’s a two-thirds increase in a little over four years. This is comparable to a family that owed $100,600 in debt in 2009 and now owes $160,700 (without a mortgage).
    • He has no intention of balancing the budgetever. When the President says he wants a “balanced” approach to the budget, he does not mean that he wants the budget itself to balance; rather, he means that he wants to raise taxes on Americans. Even with his tax hikes in place, spending will continue to grow far beyond revenues.
    • He has shown little leadership on strengthening Social Security and Medicare, which face huge funding shortfalls. Social Security has been running deficits for three years in a row now. Its trust fund will be depleted within 20 years, threatening a 25 percent cut in benefits for all recipients, even the poorest seniors. Medicare’s trust fund is projected to be depleted in a mere 11 years, threatening benefits cuts that would make it even more difficult for seniors to access care.

    The example the President’s record sets is concerning, but what’s even more troubling is that the President’s failure to successfully manage the nation’s finances makes it more difficult for the very same individuals and families he is targeting with National Financial Capability Month to accomplish stable family finances in their own households.

    High public debt threatens to drive interest rates up, crowd out private investment, and raise price inflation. These effects will have severe implications for all Americans, but the poor, the elderly, and the middle class will be hit the hardest. Already the share of publicly held debt per American is close to $40,000 (see chart at bottom). Add in intragovernmental debts owed to programs like Social Security, and every American is on the hook for more than $50,000.

    President Obama has another opportunity to propose a serious budget that puts federal spending on a path to balance and tackles the increasing budget challenges the nation faces. Will he set a good example by budgeting responsibly, or will he continue on the current path toward a fiscal crisis that leaves all Americans worse off? The nation will soon know the answer.

    Posted in Economics [slideshow_deploy]

    Comments are closed.

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.

    ×