Just recently I wrote about Nancy Pelosi’s odd view that continuously increasing government debt is a necessary precondition to functioning American businesses. Now President Obama is one-upping her, warning of economic armageddon if the debt ceiling is not raised, though like Pelosi he gives no explanation of why he thinks government powers the private sector instead of the reverse. In the face of such blatant hyperbole and scare tactics, the most appropriate response is simply to laugh.
Yet it stands as a grave and sobering moment for those who remember the year 2006, when then-Senator Obama voted against raising the debt ceiling and famously said, “The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. … Increasing America’s debt weakens us domestically and internationally.” At that time the proposed debt ceiling was about five trillion dollars lower than the current federal debt, and President Obama wants to see it raised again.
This of course is all perfectly consistent with the underlying Keynesian economic view that total spending, not total production, really determines an economy’s health. That’s a valid position to hold if one judges health of the economy by GDP, for which increased government spending is a major contributing factor. However most Americans are more concerned with whether real people are able to eat, live well, and feel secure in their retirement. These goals require production of what people demand, and production has always been the domain of the private sector. Ever-increasing government spending drains scarce resources from the private sector and encourages depletion of savings, leaving the rising generation with less on which to build.
If President Obama is more concerned about America’s future and the economic well-being of today’s children and young people than about fearmongering and playing the political blame-game, he will revisit his 2006 position and oppose any increase in the debt limit.Published in