This is precisely what Obama is proposing only worse. His "investments" are education, science, green energy, etc., and he thinks the increased revenue from those investments will more than offset the expense of the debt.
But let's look at that debt. It's not just sitting there accruing interest--it's much, much worse than that. First, he is adding to that debt, the equivalent of my young friend continuing to make purchases with his credit cards. Second, he is borrowing money to just to pay the interest on the debt, so not only is he adding to the debt itself but to the interest as well. I don't blame Obama for this--he really did inherit this, although accelerating this practice sure isn't going to help. This would be equivalent to my young friend borrowing money to make the minimum payments on his credit cards. Finally, he is borrowing money to make the investments. This would be the equivalent to my young friend borrowing money to invest for his retirement. The amount he would sock away and earn on that retirement wouldn't even come close to paying off the loan.
Obama has presented no evidence that the payoffs on the investments will actually generate enough revenue to offset even the additional expediture on those investments, much less offset the additional debt to finance the additional interest and the acceleration of "normal" budgetary expenses. In fact, there is quite a lot of data that additional expenditures in green energy and education will not significantly increase revenues in the future at all, much less by the extraordinary amounts his plan requires.
I despair.
Hey--where's the humor?
ReplyDeleteI'm trying, I'm trying! Hey, it's a gorgeous day where I am. The sun is still coming up every day!
ReplyDeleteAppreciate being able to read your reasoned perspective; wise thoughts. And this from a "sorta" liberal ... although fair to say potentially these days - beginning to consider herself a "former" one :)
ReplyDeleteTo quote President Obama only a few short months ago when he was merely Candidate Obama: "We have had, over the last eight years, the biggest increases in deficit spending and national debt in our history...Now we have a half-trillion deficit annually."
ReplyDeleteOf course, his current proposals make what he was criticizing as a candidate look like small potatoes. I feared during the campaign that there was such a cult of personality growing around him that he would be able to wield dangerous power once in office. (Speaking of which, don't I remember Bush taking a pretty steady beating about expanding executive power? I don't hear the same about the current administration's reach to control the American business sector.) Obama is reshaping our nation and our economic system while the American press looks the other way.
I would struggle to find a way to put much humor in writing about it.
Another thing that concerns me is that Bush really got whacked for supposedly violating the Constitution, yet the Democrats have very clearly done so with their retroactive taxation of the bonuses. Regardless of how you feel about the bonuses, punitive taxation is clearly unconstitutional. The people who were so quick to accuse Bush, on what seemed to me to be fairly murky grounds (but that's another discussion) are now themselves promulgating something that no one disagrees is unconstitutional.
ReplyDelete