All the same, Obama needs to be careful of his timing; it would arguably be worse to roll back our deficit too soon than too late. Yes, we have a record-setting deficit today, one that was even higher than the deficits we ran under Bush. But it’s crucial to consider the context — our present-day deficit is the result of major spending initiatives in an effort to stimulate the economy. Obama did not like the idea of running up such a large deficit, but given the alternatives, it was better than letting the employment situation get even worse than it is today. Now he needs to be careful not to pull back on Federal spending too fast.
Over at MyDD, Charles Lemos gives a quick history lesson on Japan’s lost decade:
Prime Minister Hashimoto in 1996 on the first whiff of recovery from Japan’s then half decade long downturn became hell-bent on reducing the budget deficit. The result was an economic catastrophe with GDP falling from a 4.4% growth to a -1.9% decline in the space of a year. The collapsing economy resulted in plummeting tax receipts, nearly doubling the size of the deficit. Japan’s fiscal deficit went from ¥18 trillion to ¥38 trillion over two years. Imposing fiscal discipline too soon prolonged Japan’s misery and it cost Prime Minister Hashimoto his job in July 1998.
I know there’s a lot of political pressure to reduce the deficit, and it’s a good thing that it’s front and center on Obama’s radar. But we need to wait to cut back spending until it makes economic sense, not political sense. Better to have political unrest than economic catastrophe.
The timing is always right to be fiscally responsible.
Agree. These moves are unlikely to take effect immediately. The recovery should be even more greatly underway before these policies have the potential for any negative repercussions.
I view this issue as so much pearl-clutching.
This is going to sound like spin, and seem convenient, but fixing health care is one of the biggest things to saving the budget. From our local school districts, to our state employees, to our federal employees, health care is bankrupting our country, so HCR is a huge part of deficit fixing.
agree with this as well. Even more, I think that single-payer is the way to fix things. This half-ass measure congress is using is just that.
Yes, we need the full ass!
Sure. Propose single payer.
The fact is that because of Republican mismanagement, President Obama has been as busy as a long tailed cat in a room full of rocking chairs since he was sworn in. The priority of his tasks bears little difference when everything was turned into shit by Bush and the Republicans has to be made whole again. Meanwhile the Republicans in Congress and their misguided supporters look for things like school speeches and foreign etiquette to complain about. How dare that man tell school-kids to work hard and stay in school.
You guys got your heads in the sand?
CLIMATE CHANGE should be the number 1 priority next year. It got pre-empted by healthcare this year. We couldn't afford to put it off 2 years ago - no more waiting.
I'm biting my tongue.