(chart source here)
Such borrowing puts present and future generations at risk because sooner or later (probably sooner) we will be unable to borrow from the Chinese and other foreigners, and the result will be runaway inflation and higher interest rates.
Yet Obama plows ahead. It now is clear that Obama understands the danger, but races down the spending road nonetheless:
President Barack Obama, calling current deficit spending “unsustainable,” warned of skyrocketing interest rates for consumers if the U.S. continues to finance government by borrowing from other countries.
“We can’t keep on just borrowing from China,” Obama said at a town-hall meeting in Rio Rancho, New Mexico, outside Albuquerque.
“We have to pay interest on that debt, and that means we are mortgaging our children’s future with more and more debt.”
Holders of U.S. debt will eventually “get tired” of buying it, causing interest rates on everything from auto loans to home mortgages to increase, Obama said. “It will have dampening effect on our economy.”
The president pledged to work with Congress to shore up entitlement programs such as Social Security and Medicare and said he was confident that the House and Senate would pass health-care overhaul bills by August.
“Most of what is driving us into debt is health care, so we have to drive down costs,” he said.
The notion that we can drive down health care costs enough to offset multi-trillions of dollars of spending on a variety of items (not just expanded health care coverage) is delusional. When do health care costs ever decrease when combined with expanded services?
Welcome to economic bizarro land.
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Comments
Jacobson: “It now is clear that Obama understands the danger, but races down the spending road nonetheless”
I honestly wonder if that’s true– I mean the “Obama understands” part. His economic policies demonstrate ZERO understanding of basic reality. I just can’t fathom it…
I could make some snide crack about his teleprompter just telling him to say all the “‘We can’t keep on just borrowing from China,’ Obama said at a town-hall meeting in Rio Rancho, New Mexico, outside Albuquerque.’We have to pay interest on that debt, and that means we are mortgaging our children’s future with more and more debt.'” (oops I just did)
But I really am confused by him. Obama seems so lost right now that I can’t believe he was ever even a community organizer.
May we see that in a year-by-year line graph please? A great deal of information is lost by mushing a whole 4 or 8 year term into a single line.
Gee! The graph is from the Heritage Foundation! How sweet! I’m sure it was of the same “quality” as the rest of their “research”. (Yes, I am attacking the messenger.)
Still, that Clinton feller must have been one hell of a President; esp. when you consider that Bush “The Smarter” did in 4-years what it took St. Ron of Reagan to do in 8-years, and then have Clinton reveres the whole damn mess. “Heckofajob!”, some might say.
Professor, it makes perfect sense if your secret plan after nationalizing health care is to deny treatment to the most expensive segments of the population; the elderly and the premature.
The best combination of federal spending leadership over the past couple of decades is a Democrat President with a Republican Congress. When both branches are controlled by the same party, spending goes up, it’s true of the Republicans and doubly true of the Democrats. Because Congress controls spending, it makes sense. Obama needs a Republican controlled Congress in order for him to achieve that fiscal responsibility he keeps talking about.