This article appeared in The New York Daily News
When he took the reins of government, President Obama faced a choice. Would he change the ways of Washington and make the tough decisions that all Americans understand are necessary to return America to long-term growth and fiscal sustainability? Or would he lead under the guise that massive spending binges equal meaningful reform?
So far, the administration has chosen the latter, kicking the hard choices down the road. President Obama has proposed policies that will accumulate more debt than was amassed by all previous Presidents over the past 220 years. This year alone we are forced to borrow $2 trillion from the private markets, much of it coming from foreign creditors. And because foreign creditors were likely to balk at the large supply of our debt coming to market, the Federal Reserve was compelled to step in as the buyer of last resort through quantitative easing – in other words, printing money.
With the national debt projected to more than double in the next 10 years, the President isn’t merely mortgaging the future of the young voters who supported him. He is putting all of us at risk of drowning in inflation.
The binge began with February’s “stimulus.” To put it generously, the $787 billion bill has not been the “temporary, targeted and timely” job-creating machine the public was sold. More than 2 million Americans have lost their jobs since its passage.
The administration then turned its attention to the budget. As small businesses and families across the country tightened their belts in this difficult economy, President Obama rammed an additional $3.6 trillion spending plan through Congress.
This is to say nothing of the fact that Washington now has bought into the auto business and will soon seek more control over our health care, increasing the reach of government at the expense of doctors and patients and costing well over a $1 trillion over 10 years.
Enough is enough. America cannot afford to keep running up charges on the already maxed government credit card. The creditors who finance our exorbitant spending – be they the Chinese, the Russians or private American investors – are starting to reconsider purchasing Treasury bills due to inflation fears. In the past few weeks, a global flight from Treasuries has caused yields to shoot skyward to attract buyers. Treasury Secretary Timothy Geithner was laughed at in China after asserting that America would get its debt under control.
Since interest rates on Treasuries influence the rate at which businesses and consumers borrow, our economic recovery may be the primary victim of the binge. Last Wednesday, a spike in interest rates sent the rate on 30-year fixed-rate mortgages soaring upward. Higher borrowing costs for consumers and business put a tremendous strain on two of the main sources of the economic crisis: the weak housing market and the general unavailability of credit.
It didn’t have to be this way. House Republicans developed a stimulus package focused on working families and small businesses that would have created twice the number of jobs of the one we got. We offered a budget that controlled our debt, protected our financial health and retirement security. We offered proposals to stabilize home values and make it easier to restore the savings of millions of Americans. They continue to be ignored by Democratic leaders in Congress and by President Obama.
The President claims that the stimulus has “created or saved” 150,000 jobs, but it’s impossible to quantify a “saved” job. The fact that despite trillions in federal spending, an average of 10 out of every 100 Americans are now unemployed proves that still more spending is not the answer.
With each dollar spent, Americans sense the need for a greater check on the unlimited power that the Democrats now hold, setting the stage for the 2010 congressional elections. The administration pitches its unprecedented spending as an effort to douse the fire in our economy. All they have done is ensure it will last longer.
