President Obama: There Is No Debt Crisis

[SunSeeker]

Source: ABCNews.com

There has been no shortage of dire warnings about the mounting US national debt, but President Obama is now offering a different assessment: no big deal.

“We don’t have an immediate crisis in terms of debt,” President Obama said in an exclusive interview with George Stephanopoulos for “Good Morning America.” “In fact, for the next 10 years, it’s gonna be in a sustainable place.”

It’s an assessment that will throw cold water on the latest attempt to achieve a so-called grand bargain to reduce the deficit. After all, a grand bargain would require excruciatingly difficult decisions for both sides — for Republicans, it would mean raising taxes, and for Democrats, cutting future spending on cherished programs like Social Security and Medicare. If there is no crisis, why would either side do it?



Read more: http://abcnews.go.com/

[liberal N proud]

1. A quote you will not see on FoX Propaganda network.

[sangsaran]

2. Because...

They want to look like they're doing something important so they can get re-elected.

[AndyA]

3. Paul Krugman feels the same way

He said that our concerns should not be in the short term, but in the long term. He still feels we should be spending right now, while access to money is easy and interest rates are low. Get people back to work, increase the tax base, and we'll have more money to work with in the short term, which will also improve our long-term debt problem by increasing income.

Makes perfect sense. We know that cutting back is not the solution, based on what we've seen in other countries, yet the GOP seems determined to follow those countries down the road to failure. It's insanity.

[SunSeeker]

4. Exactly. nt

[Botany]

16. egg zac lee

Paul Krugman's NY Times piece the deficit is falling and the stimulus worked

http://www.nytimes.com/2013/03/11/opinion/krugman-dwindling-deficit-disorder.html?_r=0


What’s really remarkable at this point, however, is the persistence of the deficit fixation in the face of rapidly changing facts. People still talk as if the deficit were exploding, as if the United States budget were on an unsustainable path; in fact, the deficit is falling more rapidly than it has for generations, it is already down to sustainable levels, and it is too small given the state of the economy.

Start with the raw numbers. America’s budget deficit soared after the 2008 financial crisis and the recession that went with it, as revenue plunged and spending on unemployment benefits and other safety-net programs rose. And this rise in the deficit was a good thing! Federal spending helped sustain the economy at a time when the private sector was in panicked retreat; arguably, the stabilizing role of a large government was the main reason the Great Recession didn’t turn into a full replay of the Great Depression.

snip

Now, I’m aware that the facts about our dwindling deficit are unwelcome in many quarters. Fiscal fearmongering is a major industry inside the Beltway, especially among those looking for excuses to do what they really want, namely dismantle Medicare, Medicaid and Social Security. People whose careers are heavily invested in the deficit-scold industry don’t want to let evidence undermine their scare tactics; as the deficit dwindles, we’re sure to encounter a blizzard of bogus numbers purporting to show that we’re still in some kind of fiscal crisis.

[SomeGuyInEagan]

37. Classic Keynes ... Krugman said we did NOT put enough in the stimulus (I totally agree)

If the private sector cannot or will not spend (and they clearly can but won't as there has been a massive amount of cash sidelined by business as a whole since 2008), government has to do it. And we did, but in a really wienie way.

What we needed (and many here and elsewhere called for) was true FDR-like programs hitting the ground in the first 100 days of Obama's presidency. Easy argument to make the the roads, bridges, damns (think the bridges are is scary shape? don't even lookin into the damns in this country) and electrical grid need a huge dose of money, not to mention schools. The stimulus should have been triple what it was. The money *handed* to the banks should have *only* been given to them in return for forgiving home loans.

But the party never had a filibuster-proof Senate. And, frankly, I doubt that Obama nor many of the party "leaders" would have swung for the fences in an FDR-like fashion anyway. Far too-business "friendly."

I believe we are a center-left country, situated well to the left of the Democratic party leadership. Perhaps with all the money in politics, that is the only way they can be. But I can dream.

[Volaris]

42. If we ARE a center-left country,

that fact WILL NOT manifest itself regularly in our Legislative Body until elections are publicly-funded.
Just sayin'.

[SomeGuyInEagan]

47. Totally agree.

Money is the problem.

My favorite idea is one I heard James Carville propose: campaigns are completely publicly-funded *and* the incumbent gets a reduced share simply because she/he has the power of the office from which to campaign.

Would also get rid of the year-round campaigning. And free up a lot of time for elected officials (remember the movie, "Bullworth", where Warren Beatty's character (U.S. Senator, I believe) is crying in his office because he has to spend so much time each day making phone calls to ask for money?).

[Volaris]

54. I agree with that..

and it could serve as an in-practice argument to the much-touted Conservative position on Term Limits for Members of Congress...if it's in practice harder to keep your seat (because you have less money to spend) then it's BY DEFINITION easier for someone else to take that seat FROM YOU....

[geek tragedy]

5. There's a job crisis, and a debt problem, nt

[jsr]

6. Then why is he offering up Social Security and Medicare for sacrifice?

Is it out of habit?

[sangsaran]

8. Probably for laughs.

You know, like Charles Koch after "pilfering a few hundred dollars' worth of oil from a couple of dirt-poor Indians on the Osage Reservation."

[sangsaran]

31. Um...

You probably shouldn't assume everyone you disagree with is a troll. After all, isn't being afraid everyone different from us is out to get us is exactly what got us into Afghanistan, Iraq, the War on Terror, Vietnam, Korea, the Cold War, both Red Scares, etc.?

[JoePhilly]

12. Clearly to make you scream.

You think the cuts are going to happen soon?

They've been predicted for almost 4 years now.

[Skittles]

29. yes, we need to wait until they happen to start worrying

WHY does Obama bring them up at all? Why?

[Skraxx]

18. He's Not

"But ultimately, it may be that– the differences are just– too wide. It may be that ideologically, if their position is, “We can’t do any revenue,” or, “We can only do revenue if we gut Medicare or gut Social Security or gut Medicaid,” if that’s the position, then we’re probably not gonna be able to get a deal."

[John2]

32. I just get the impression

President Obama is more worried about his legacy than anything else. The corporate media has controled the Debate on what Policy in this Country should be. I say screw the media. His legacy will depend on what people like you and me think of him.

This is the not only the wealthiest but most militarily powerful country in this World. What country on Earth will make the U.S. do anything, even pay it's so called Debts? If the U.S. start collecting debts owed to this country after World War II, it will never go broke. That includes Israel,Russia,China, Japan, Germany and everybodyelse we helped. They should hope the U.S. doesn't become another Nazi Germany and take what they want by force, even though we have some people in this country want to do just that.

[Fearless]

7. So SS cuts are back off the table? Or is this just meant to make people feel better?

[JoePhilly]

14. I'm sure some one will get out their Obama secret decoder ring and

find the hidden "I plan to kill SS" message hiding in that quote.

[Fearless]

21. Words mean nothing in politics

Actions are all that count. Will Obama support the Senate budget plan? That will be the litmus test in this case.

[JoePhilly]

22. How so?

Even if he supports the Senate budget, DU will be filled with hair on fire OPs explaining why that "support" isn't real "support" because that budget can never pass the House and Obama knows it.

Clearly he'd only be supporting it for show, and not because he actually supported it.

[Fearless]

23. Again, actions are what matters.

Words mean nothing.

[Skittles]

30. oh f*** all this

not EVEN worth it

[Enrique]

9. glad to hear his comments, but...

but I'm skeptical about this ABC news analysis. I suspect Obama has said similar things, and so I'm not buying this analysis that this is a "new assessment".

Obama goes back and forth on a lot of things, it looks like in this case the media wants him to stay on message. The TV media has taken sides big time on the deficit, and I see most TV reporting on this issue to have an agenda.

[Enrique]

10. by the way, this headline seems designed for one thing

to give the RWers something to make a big deal about.

[SunSeeker]

13. ABC sure is. It posted a picture of the debt clock next to Obama's face.

But they never post a picture of a hungry kid next to Paul Ryan's face. Funny that.

[sheshe2]

38. Well Said! nt

[lonestarnot]

40. Or granny waiting to retire until age 90.

[AgingAmerican]

15. Does this mean 'entitlements' are off the table?

because the phony crisis is being used by the GOP as an excuse to wreck the economy.

[freshwest]

27. And to keep Democrats from the polls in 2014. It worked for the GOP in 2010.

[midnight]

17. I think their is a jobless crisis....

[ProfessionalLeftist]

19. He's right. Leading economists agree.

Our big issue is employment/jobs, fair wages, and income inequality - ie: shrinking middle class. Get that fixed - much of the debt would take care of itself and what didn't could THEN be dealt with after the more immediate issue is solved: JOBS.

[forestpath]

20. He just wants to cut Social Security and Medicare for the hell of it!

[Igel]

24. He's right.

There's no debt crisis.

So the logical thing to do is to wait until there's a debt crisis.

Heck, we don't have a budget crisis yet. No use pondering it.

We don't even have a jobs crisis. Or unemployment crisis.

Given the lack of crises, we're sitting pretty. We can all just kick back.

Okay, some people have a bit of a budget crisis. They've watched their savings and benefits run out--not a crisis until they hit $0. You have another week's income or food money, not an immediate crisis. You have a week, nothing do worry about until you're broke. *Then* you start to think you have a problem. That's how it works, right?

The Titanic? Not an immediate crisis as they zeroed in on the iceberg. The sound of impact signaled the advent of crisis, and boy, was it immediate. *Then* (and only then) was it time to think about some sort of solution.

Let's not worry about something 10 years' off. It may be a Herculean task to fix the crisis when it's immediate, but surely somebody will be around to not let the crisis go to waste.

[hue]

26. "The sky is falling, the sky is falling!!" Guess what, the sky isn't falling!

[Munificence]

58. Exactly!

Funny how you will be ridiculed by pointing this out but yet you will see headlines such as "Total cost for Iraq War 3 trillion" and everyone will say things like "just think how better off we'd be without all that debt".

Everyone go out and get credit cards, max them out, hell buy a Porsche while you are at it, big screen tv's, "what-ever" and finance it all because "debt is no problem".

[hue]

25. The budget deficit has been a Repuke/Teapuke nihilistic scare tactic from the get go.

[Spitfire of ATJ]

28. "The debt" was cooked up as an issue by Republicans to distract....

They had just lied us into a war and crashed the economy to the point where Capitalism itself was being questioned so they fell back on their old "cheapskate" reputation.

No longer the Party of National Security.

No longer the Party of Wall Street and Economic Growth.

So,...they claim to be the Party of Fiscal Responsibility. It's been long enough to forget the bridge to nowhere. Right?

I mean, even the Mooney Times was all over them.

http://www.washingtontimes.com/news/2004/jan/15/20040115-112447-9758r/?page=all

[AlbertCat]

33. and for Democrats, cutting future spending on cherished programs like Social Security and Medicare.

SS and medicare have nothing to do with the debt.

But don't let that stop the meme!

[santamargarita]

34. Finally!!! It was invented by the goddamn Republicans!

[EC]

35. The tea people don't care

they really don't understand, so they'll keep harping on it. Now is really the best time to be borrowing because the rates for us would be so low. But the tea people are making us miss our chance at really building a future for less. We'll end up fixing our schools and infrastructure more expensively and likely haphazardly on the cheap.

[CTyankee]

36. Joe and Mika are gonna have a shitfit tomorrow on Morning Joe!

Joe will start whining about Paul Krugman again and Mika will nod. I will put money on that bet...

[sheshe2]

39. K&R!

[bubbayugga]

41. he seemed to think there was a debt problem back in 2008-when the debt was only 67% of GDP

just sayin'.

[SunSeeker]

46. There's a big difference between saying we have a debt problem and a debt crisis.

And I agree with him, the way Bush added $4 trillion to the debt was unpatriotic, being how it was by way of two unnecessary wars and huge tax cuts for the rich.

I think anyone agrees huge debt is a problem. We end up spending more and more on interest. The issue is, does it rise to the level of crisis as the Repukes insist, requiring gutting medicare and throwing poor people out in the streets?

Or do we gradually grow our way out of debt, by increasing the minimum wage, investing in infrastructure and job training/education and cutting tax loopholes for the rich?

[bubbayugga]

49. there's a big difference between 67% of GDP and 100% of GDP.

If it was irresponsible and unpatriotic and a problem at 67%, what is it at 100% if not a crisis?

[DCBob]

50. Regardless its still a "problem" and not a "crisis".

In case you dont know the difference.. a crisis means we must deal with it now.. a problem means we can deal with it later.

[bubbayugga]

53. see post #52.

[DCBob]

55. see post #50.

[bubbayugga]

56. that was circular.

[SunSeeker]

51. The issue is what response the problem warrants.

Calling it a crisis that warrants crippling austerity is wrong and plays into the Republican shock doctrine strategy. But you can call it a crisis if you like, it's a free country.

Do you disagree that we should gradually grow our way out of debt, by increasing the minimum wage, investing in infrastructure and job training/education and cutting tax loopholes for the rich?

[bubbayugga]

52. Tomorrow never comes when it comes to dealing with the debt problem later.

It is a crisis because we have repeatedly demonstrated that we are incapable of existing as a nation without bowing before foreign governments and without inflating/diluting our currency. That is a crisis because our currency, which is the lifeblood of our economy is no longer backed by gold, it is backed by FAITH - faith that our government is fiscally sound, faith that our currency itself is sound, faith that the American way of life is sound. We prove daily that our government, our currency, and our way of life is anything but sound because, as I said, we prove daily that we are incapable of standing as a nation without being propped up with VAST sums of other people's money. Furthermore, we demonstrate that we areincapable of digging ourselves out of this hole which we may as well call a grave at this point and that we are only capable of digging it deeper. We are unsustainable.


Do you disagree that we should gradually grow our way out of debt, by increasing the minimum wage, investing in infrastructure and job training/education and cutting tax loopholes for the rich?
What happened the last time we raised the minimum wage? Let me show you. Note the years 2008, 2009, and 2010 and ask yourself how many jobs were created by raising the minimum wage.



Investing in infrastructure?
While that may possibly put a few people to work, it doesn't create revenue because it doesn't create wealth. It just moves money around. To create revenue in the global economy, you must create things that can be exported to the rest of the world for a profit. Investing in infrastructure doesn't really do that. If anything, it adds to the debt.

Job training and education?
I'm not against education but I don't think it solves the debt "problem".

cutting tax loopholes for the rich?
We could steal every dime from every millionaire in America and it still wouldn't get us out of our hole. It would only create more poor people.

It's a crisis because we have no solution to the problem and the world knows it.

[SunSeeker]

57. How about giving me graphs where the years actually line up? Either way, they prove my point.

The graphs show unemployment predictably spiking during periods of recession (01/01-01/02, 01/08-present) but do not correspond to significant rises in the minimum wage. In fact, it appears unemployment went down during significant increases in the minimum wage--although your unemployment rate graph cuts off in 99. The minimum wage almost doubled between 78 and 99--but looks like unemployment stayed pretty low during that period. Giving people a living wage lowers the need to spend on safety need programs, improves people's health, thus lowering healthcare costs, and improves how well their kids do in school, this increasing their kids earning power when they get older. And prevents untold misery.

Investing in infrastructure, like investing in our people, makes us more competitive and productive. After Eisenhower build the interstate highway system, American experienced an economic boom. Good economic times lower the debt because it results in higher tax revenues and less spending on unemployment checks and other safety net programs.

Man, talking about taxes really outs you. No, cutting tax loopholes for the rich is not "stealing" from the rich. It is making them pay their fair share for the riches this country and its workers have provided them. It does not "only create more poor people." It creates a civilized society and LOWERS poverty. When Clinton raised taxes on the rich, it ushered in a economic boom that led to budget surpluses...until your guy Bush crashed the economy with two unfunded wars and huge tax cuts for the rich.

Our debt is high, but compared to the rest of the world, we are in pretty good shape. And the world knows it. THAT is why the world keeps sending their investment dollars our way and keeps buying our T-bills. We do have a solution, if only your treasonous Republican friends will get out of the way and let us heal our country.

But time is on our side. Eventually, demographics alone will kill the Republicans. When we have our Democratic Congressional majorities back, we will finally be able to truly fix all that your Republican friends have broken.

I guess that's why you and your Republican buddies are calling this a "crisis."

[bubbayugga]

59. The graphs line up fine-look at 2008,2009, and 2010.

what doesn't line up are your logic and your arguments. The economic recession of 2008-present parallels the three previous rises in minimum wage and illustrates that the idea that raising the minimum wage creates jobs and, therefore, tax revenue is unsupported at best.

I remain unswayed by your ad hominem, your logical fallacies, your dishonest arguments, and your unsupported conclusions. furthermore, I never voted for Bush and I was always against Iraq as God is my witness. I went to war for Clinton and Bush btw.

[SunSeeker]

60. Oh for fuck's sake.

Unemployment exploded starting in 2008 because Bush crashed the economy, not because we raised the minimum wage a few cents a few years before.

If you think taxing the rich is stealing, why are you on DU?

Hell, that's pretty extreme even for a Republican.

[bubbayugga]

61. It's more complicated than that.

Unemployment exploded because of automation, NAFTA, China's MFN status, and the increases in the minimum wage. retiring babay boomers didn't help either. Lack of regulation in the lending industry and the investment industry then came in to create a perfect storm. When you give millions of sub prime borrowers no down payment adjustable rate mortgages and then bundle those mortgages up into investment packages which you then peddle to the entire world as high yielding investment vehicles and then you send those sub prime borrower's jobs to China and Latin America, things start to unravel.

So, now we have heads of households competing for jobs formerly held by teenagers who needed beer and weed money for college. Awesome. our continued deficits are simply a reflection of our inability to generate revenues through job creation. The need to raise taxes is just a reflection of that.

I really would love to continue this but I have to work.

[Arkana]

43. And he's going to get shit on for saying this, despite it being the unvarnished truth.

There is no goddamn crisis. China isn't going to bang on our door and demand repayment because it would crash their economy as well. Republicans have been blowing smoke up our asses for years.

[WhoWoodaKnew]

44. The debt may be the only thing that I disagree with people here on.

I think it's way too high and should be decreased. So hammer me.

[SunSeeker]

45. I don't think anyone disagrees with you on that.

But do you think it is a crisis that requires gutting SS, throwing the poor off medicaid and voucherizing medicare to address? Or do you think we should invest in infrastructure, job training and grow our way out of debt (along with getting rid of tax loopholes for the rich)?

[and-justice-for-all]

48. The debt has been reduced quit a bit...

The crisis is republicans and their teahadist friends in the House.