In Reality, Debt Matters. It Matters a Lot

President Obama was right in 2006, not now.

No worries, America. Debt is a preoccupation of the fringe, a mere distraction for anyone interested in progress. And anyway, as President Barack Obama explained this week, "we don't have an immediate crisis in terms of debt. In fact, for the next 10 years, it's going to be in a sustainable place."

That's a pretty convenient position, wouldn't you say, for a man who's helped pile on trillions of dollars of new debt and created an entitlement that promises to escalate this non-crisis crisis of ours? Problem is that there are a few trillion things wrong with this contention.

The most obvious hitch is that neither this president—whatever we think of him or he thinks of himself—nor anyone else, even the best-intentioned economist or technocrat, can foresee what's in store. Judging from our recent history—the wars, economic downturns, natural disasters, fake emergencies, bailouts, etc.—there will be plenty of new reasons to create debt we haven't accounted for in our future.

And we may keep talking about $16 trillion of debt—bad enough—but the real number is unknown. Considering all the unfunded liabilities—things we have already promised and probably can't pay for—it's likely going to be a lot higher.

Then there are near-term political considerations. With the ideological divide in Washington, no one is going to come up with a consensus on reforming entitlements—the real driver of debt. (Then again, tepid bipartisan reform might be even worse.)

Right now, we're spending more money to pay interest on debt than we'll spend on education, homeland security, transportation and veterans' benefits combined this year. Surely, there's something better to spend that money on. And those interest payments are a significant tax on Americans—a debt tax that Washington doesn't want to talk about. And just wait until interest rates rise, because at some point they will.

Hey, I didn't even come up with the previous paragraph. I cribbed it from a speech given on the Senate floor in 2006 by an up-and-comer named Barack Obama. He's so articulate I couldn't resist. But those were the stormy days when debt mattered because Republicans were, well, Republicans.

Left-wing pundits act as if the presidential election was a referendum on all economic policy—forever—rather than a popularity contest that has much to do with cultural and very contemporary concerns. To even talk about cutting spending is to spit in the face of history's advance. Well, things change, and if polls are to be believed, debt matters. Take nearly any poll that gauges the concerns of the public. For a long time now, jobs and the economy were leading the list, but second is almost always debt. Green energy, one of the administration's big concerns, is not even close. Neither is gun control. Neither is more regulation. Neither is immigration. Neither is most of the Obama agenda.

Of course, debt isn't always a bad idea. We build things for the next generation, and they should chip in, no doubt. But right now, public debt is more than 75 percent of gross domestic product. So when do we get to worry? At 100 percent? Demographics? Right now, most baby boomers are on the verge of retirement. But don't worry.

It would be nice if some reporter asked the president what happened. Why did debt matter in 2006 but not now? Why in 2009 did the president promise to cut the deficit in half if it's nothing to fret over?

He was right then, not now. And surely, even he can't argue that our situation has improved. Actually, reality rarely holds him back.

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  • Tim||

    We are the ones we've been waiting for.

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  • OldMexican||

    And anyway, as President Barack Obama explained this week, "we don't have an immediate crisis in terms of debt. In fact, for the next 10 years, it's going to be in a sustainable place."


    "And, besides, I will be spending my remaining time after that in some sympathetic country. You know, like Idi Amin did once."

  • OldMexican||

    For a long time now, jobs and the economy were leading the list [of concerns by the public], but second is almost always debt. Green energy, one of the administration's big concerns, is not even close. Neither is gun control. Neither is more regulation. Neither is immigration. Neither is most of the Obama agenda.


    But you see, the public is not smart enough to regard those very important topics they're missing. They're dumb as posts, which is why they voted for Obama. You know, so he could do the thinking for them. That's a smart move.

    /leftard "logic."

  • Irish||

    And anyway, as President Barack Obama explained this week, "we don't have an immediate crisis in terms of debt. In fact, for the next 10 years, it's going to be in a sustainable place assuming our absurd and unsubstantiated projections are accurate and we don't have another economic downturn."

    I love that the idea that our debt isn't a problem takes for granted that we won't have another recession. We've averaged a recession every 8 years since WWII, a fact which means we should be due for one at some point in the next 3-5 years. But all the projections just assume constant growth with no downturn, and abnormally high constant growth at that.

  • Calvin Coolidge||

    As long as we continue to run enormous deficits, we will never have another recession, because of all the stimulus! It's in Keynes!

    And if the debt becomes a problem, we can just default, or print money to cover it, or mint a trillion-dollar coin, and that will solve everything!

    As far as I can tell, the plan on the left is: Run up spending to fix the recession. Then, print money to cover the debt. Then, crash the economy in order to avoid inflation! Lather, rise, repeat, and we are all sitting pretty.

  • dj kumquat||

    ^

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  • ||

    Don't make me go all Cloward/Piven on your ass. - B. Owebama

  • Tony||

    Polling to decide what's important with respect to fiscal policy? In this country?

    Besides nobody actually cares about debt except maybe a few suckers. Debt has quite obviously for some time been the excuse for antigovernment fanatics to enact their agenda of gutting social programs. It's why they won't tolerate raising taxes to deal with it. Unless someone can show some kind of evidence that a "crisis" is imminent (as has been claimed for years now)?

  • Irish||

    I agree that polling is stupid, since these are the same people that elected Barack Obama. Clearly they don't know anything.

    http://www.telegraph.co.uk/fin.....s-BIS.html

    This for your second point. From the link:

    Examining the point at which debt stops supporting growth and turns damaging, the research found that for government debt, the threshold is in the range of 80pc to 100pc of a country's gross domestic product (GDP). For corporate debt, the threshold is closer to 90pc of GDP, and for household debt, it is around 85pc of GDP.

    America's Debt to GDP ratio is 103.5%. Bank for International Settlements = 'a few suckers.' /Tonylogic.

  • Irish||

    That's not even considering the fact that we're probably close to those thresholds for corporate debt and for household debt because our government forces consumption and punishes savings whenever we have bad economic times.

  • Anomalous||

    Interest on the debt crowds out spending on the social programs that progtards so love. But they figure they can always pay for them by raising taxes more.

    Tax the rich, feed the poor, till there are no rich no more?

  • Tony||

    If you're not willing to raise taxes by a dime to address the debt, then you don't care about the debt.

  • Tony||

    If you're not willing to raise taxes by a dime to address the debt, then you don't care about the debt.

  • Bill Door||

    If you're not willing to cut spending across the board to address the debt, then you don't care about the debt.

    There, I fixed that for you.

  • Sevo||

    Tony| 3.14.13 @ 2:52PM |#
    "If you're not willing to raise taxes by a dime to address the debt, then you don't care about the debt."

    Brain-dead troll alert!
    Oh, and shut up, shithead.

  • ||

    Tony:

    Besides nobody actually cares about debt except maybe a few suckers.

    Well, I guess that includes Paul Krugman.

  • DarrenM||

    Unless someone can show some kind of evidence that a "crisis" is imminent (as has been claimed for years now)?

    Yes, it was a good thing it was so obvious to everyone a housing crisis was just around the corner several years ago and gave the government plenty of time to forestall the consequences. /sarc

    By the time it's a 'crisis', it will be too late.

  • Rhino||

    The only poll Obama cares about is the one that got him elected. Now eat your peas.

  • Shelbzorz||

    2+2=5

  • Anonymous Coward||

    The problem is, is that the way Bush has done it over the last eight years is to take out a credit card from the Bank of China in the name of our children, driving up our national debt from $5 trillion for the first 42 presidents – #43 added $4 trillion by his lonesome, so that we now have over $9 trillion of debt that we are going to have to pay back — $30,000 for every man, woman and child. That’s irresponsible. It’s unpatriotic.

    -Senator Barack Obama

    It's a shame Senator Obama didn't become President.

  • Firstname||

    Senator Obama didn't have the privilege of massive amounts of PAC and lobby money directing him on this issue back then.

  • Loki||

    Senator Obama didn't have the privilege of massive amounts of PAC and lobby money directing him was lying through his fucking teeth on this issue back then.

    FTFY

  • Gordilocks||

    I'd say both.

  • SiliconDoc||

    Everyone else's wallet is the ones he's been waiting for, and counting on, and has apparently counted for ten years out...

    Thanks Osvengali, I'm sure your birthplace relatives believe you.

    So there wasn't a problem when the debt was downgraded for the 1st time ever - yeah bammy that brain sure is working well. LIAR LIAR LIAR LIAR.

  • burserker||

    eventually there will be a generation of young Americans that will be left will all this debt stacked on top of them with no way out. I suspect those kids are in jr. high right now, and they will refuse to allow their govt to continue to kick the can down the road.

  • Sevo||

    "I suspect those kids are in jr. high right now, and they will refuse to allow their govt to continue to kick the can down the road."

    I'm afraid they won't. They'll blame 'the rich' for not paying their 'fair share' and vote more brain-dead lefties into office.

  • Rhino||

    We are that generation to the baby boomers and look what we're doing. Passing the debt, with a boatload of additions of our own, to the next generation.

  • DarrenM||

    We build things for the next generation

    And suppose the next generation doesn't *want* the crap we 'build'? I expect they will prefer to have made these decisions themselves.

  • Libertarius||

    America's current national debt is only "sustainable" as long as the bond market allows Bernanke to enable the federal government to buy debt from itself at absurdly low interest rates--instead of the junk bond rates (and beyond) it should already be paying.

    Artificially suppressed interest rates are the joker in this whole thing. As soon as interest rates move on 16 trillion in debt...it's gonna be interesting.

  • dj kumquat||

    "Of course, debt isn't always a bad idea. We build things for the next generation, and they should chip in, no doubt."

    i beg to differ. the next generation shouldn't be paying for what they didn't get to vote for or against.

  • dj kumquat||

    when you give someone a present, you hope they like it, but you don't send them the bill.

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