Fiscal Situation Worsens, Obama Urges Caution

Here we are, with a rapidly mounting debt and many other problems, and what does Obama want us to do? He wants us to "exercise caution" with spending cuts.
http://tinyurl.com/6ka5rw4

The president said it was important to be careful in determining which programs would face the chopping block, especially as Republicans in the House have expressed eagerness at rolling back spending levels and eliminating government programs.

"We want to cut with a scalpel as opposed to a chainsaw," Obama cautioned in an interview with YouTube, broadcast live on the White House's website.

The problem is that we have a YEARLY deficit of $1.5 trillion, about a third of our overall budget. We have to get rid of that deficit, and that means reducing spending by AT LEAST $1.5 trillion a year. We can't get that with an overly cautious "scalpel" approach. When Congress is increasing spending by the dump truck load, shoveling our way out won't help much.

And here's another thought. He wants us to "exercise caution" when looking at budget cuts? Why don't they ever exercise caution when INCREASING spending? Obama and his cronies have been pretty reckless about spending a LOT of money that we just don't have. Our government can't survive when Congress spends money recklessly and exercises fiscal discipline only reluctantly and timidly.

Obama doesn't want to cut spending, no matter how bad our situation is. And with Social Security now in a permanent deficit, we have a lot of problems looming over us.


Oh, didn't you hear about that? The CBO released a report saying that Social Security is in a permanent deficit situation NOW. Not ten years from now, but NOW.
http://tinyurl.com/6kzrxkd

But CBO has some really, really bad news about Social Security: It’s officially broke. The CBO’s revenue/expenditure estimates now place the program in permanent deficit. There had been some hope that payroll taxes would recover sufficiently post-recession to put the program back into the black (the theoretical black) for at least a few more years, putting off the day of reckoning for an election cycle or more. No more: The new CBO estimates put Social Security in the red for as far as the eye can see.

For many years, it has been the practice to "borrow" money from the Social Security "trust fund" and spend it on whatever Congress wanted to spend it on. Instead of having $2.5 trillion actual dollars, Social Security has $2.5 trillion in IOUs from the Treasury. What happens now is that the Treasury will have to borrow money to funnel into Social Security so it can meet its obligations. With this additional problem, our debt situation will only get worse over time.

And bailouts are still in the future. Yes, I know they passed "financial reform" specifically to stop future bailouts, but now we "discover" that the "reforms" will do no such thing.
http://tinyurl.com/642f9nd

The Obama administration touted its overhaul of financial rules as a prescription to end future financial bailouts. The law gives regulators the ability to police any financial company whose failure would be felt throughout the system, and to shutter institutions that pose a threat.

Bank regulators acknowledge that those tools might not be enough to avoid a bailout, Barofsky notes. He says the law depends heavily on decisions by many of the same regulators who failed to prevent the recent crisis.

So remind me... WHY was it so critical to pass financial reform, again? If we have another crisis, the Feds will borrow MORE money to bail them out... AGAIN. All the so-called "reforms" did was to give the government more control over the financial sector. It didn't solve any problems. It just allowed Obama to grow the government.

Obama is in denial about this. His spending over the past two years, coupled with all the money he wants to spend in the future, are poised to swamp us with massive amounts of debt payments. Those will skyrocket very high as inflation tightens its grip on us, as it soon will. As the recovery takes hold, interest rates will rise. And as they do, making payments on the debt will become more and more expensive.

And what does Obama think we should do? Well, one thing he DOESN'T think we should do is reduce spending to sustainable levels. After all, we must "exercise caution" with spending cuts... even though he and his ilk exercised no caution at all with their spending INCREASES.