Obama's spending freeze is a horrible mistake

[johan helge]

- It's wrong: Unemployment is 10 % now, and will probably be high also in 2011.

- It's unnecessary (from http://krugman.blogs.nytimes.com/2009/08/28/the-burden-of-debt/): In 1950, “federal debt in the hands of the public” was 80 % of GDP. Ten years later, in 1960, this was reduced to 46 %. This happened even though the debt was increased, because the GDP increased much more. The US is expected to reach the 1950-level, 80 %, in approximately ten years. In short: There is no emergency, this has been solved before, and can be solved again.

- It's bad tactics: Because of unemployment, it may cost Obama reelection (which is why, of course, the Rethugs want him to reduce the federal deficit).

[Sherman A1]

1. First of all it has to get through Congress and in what form

I am sure that there are areas that can be cut and scaled back (personal favorite would be a 5 sided building nearby DC, but that is off the table it seems).

[johan helge]

4. I'm sure too, but that is about

how much and what the US produces. Cutting Pentagon budgets etc. may be a good idea, but only if the money saved is used on other things. If the money is used to pay down federal debt, high unemployment lasts longer.

[Honeycombe8]

2. Why? nt

[johan helge]

3. The main reason is that it means that

the high unemployment will last longer. And that may cost Obama reelection.

By the way, this graph is interesting:

http://en.wikipedia.org/wiki/File:US_annual_federal_deficits_over_receipts_1901_to_2006.svg

It shows: Since 1970, the federal deficit as a percentage of receipts has increased under all five Republican presidents (Nixon perhaps excepted), and decreased under Carter and Clinton. The Repubs care about the deficit only when Dems are in charge. When they are in charge, they just cut taxes, and spend on military etc., and couldn't care less about the deficit. The reason for that: They hope that a big public debt will make it more difficult for the Dems to spend money on people (they call it "starve the beast", i.e. starve the goverment). And Obama's freeze is just an example of this.

[Oregone]

5. It wont happen until 2011. Obama will Chessmaster the economy right by then

[johan helge]

6. I wish

The unemployment rate is expected to be 10.0 % in 2010, 9.2 % in 2011, and 8.3 % in 2012 (http://www.philadelphiafed.org/research-and-data/real-time-center/survey-of-professional-forecasters/2009/survq409.cfm).

And those forecasts were made before Obama announced his freeze.

[HiFructosePronSyrup]

7. Obama just announced 8 billion to finance construction of high speed rail.

Nice timing on the post there, pal.

[johan helge]

9. Yes,

but the stimulus was 787 billion, so 8 billion (which are or are not included in those 787) is not so much in this context, of course.

I'm happy that Obama has managed to make people more enthusiastic again. But he has still made this big error, and that needs to be said.

[Fire1]

8. FFS, the shit doesn't even take effect 'til NEXT YEAR!

You can't predict what this economic shit is gonna look like, THEN! Get the fuck outta here! If everything goes as he plans we WILL be able to do it without ANY long term repercussions. In fact, we may even bring down the deficit.

[johan helge]

10. I'm glad that Obama has managed to make DU-ers more

enthusiastic again. DU-ers understand that in his heart he is one of us, and that's important. But, of course, when Obama makes mistakes, that should not be kept under the rug.

2011 is just one year from now. I don't think there are many economists who expect unemployment to be reduced much during this year. The "average" forecast is 10.0 % in 2010, 9.2 % in 2011, and 8.3 % in 2012 (http://www.philadelphiafed.org/research-and-data/real-time-center/survey-of-professional-forecasters/2009/survq409.cfm). And that forecast was made before Obama announced his freeze.

[Fire1]

12. They made that prediction realizing that some jobs will never

return. That's why there is so much emphasis on 'education' from the WH. Folks have to wake up and re-invent themselves for the 21st century. Nevertheless, the deficit will be reduced.

[johan helge]

13. I guess

education is one of the areas that will be hurt by this freeze. But perhaps they will let education spending grow, and cut other sorts of spending.

[Fire1]

14. Education will be the LAST place he cuts. Did you not hear

of the tax credits for college students? Did you not hear him say he's going to INCREASE Pell grants and keep tuition rates AFFORDABLE??

[johan helge]

15. You're probably right

But if they are going to let a big sector like education grow, they must cut very much in something else. I wonder what they'll cut.

[Fire1]

16. Good question but I'm sure it'll be some programs that

weren't working very well and probably haven't been for quite some time.

[johan helge]

18. Let's hope so, but this will hurt, of course:

Except for defense (which of course won't be cut), government is too small in the US.

[Fire1]

19. Well, others would argue that it's too big! But I think we'll be

just fine.

[johan helge]

20. Non-military government as a percentage of GDP

is probably smaller in the US than in most (or all) advanced economies. The government is too small, and more people should dare to say this. Better infrastructure, better schools, better welfare programs, etc.

[Fire1]

21. Oh, I agree. "Big government," and other such screeds have

historically come from Republicans.

[johan helge]

22. Yes, they've done that to words like

"government" and "liberal". I think the best answer is to be proud tax-and-spend liberals. When people see clearly who want better schools etc., and who do not, the Repubs will lose debates and voters.

[Kurt_and_Hunter]

11. Try posting "2+2=4" and see if you get a similar number of unrecs

I'm guessing yes.

[johan helge]

17. I should have included something

positive about the speech, which it deserves. I think it made liberals see, once again, that in his heart Obama is one of us. But, of course, Obama makes mistakes too, and this is one of them.