January 29, 2011

When to believe Obama's serious about spending cuts

As much as I'd like to say never and just leave it at that, there is a slim chance that the President was serious when he mentioned during his most recent State of the Union, practically in passing, that cutting government spending was important.  He spent most of the speech talking about investing the future (spending).  So it's hard to take the President seriously when he pays lip service to spending cuts.  A record $1.5 trillion dollar government deficit for the current fiscal year doesn't lend any credence to it either. So how, or when would it be possible to take President Obama seriously on the issue that is most serious to the country right now?

That's easy. When he starts talking out of the same side of his mouth as he did less than one year ago when he talked about PAYGO - pay as you go - for government spending.  The idea is simple - no new spending should be submitted for his signature unless it is accompanied by either a commensurate spending cut elsewhere or a tax increase so that there is no new deficit spending when something new is done.  That might work if the government were in a more revenue neutral position and not a huge deficit situation.  However, at least there was some logic to it in terms of not compounding the error of excessive government spending.  So Obama 2011 is at odds with Obama 2010 as seen here;

When should we believe President Obama is serious about curbing government spending?  Not for a long time.  He doesn't agree with dramatic cuts because in the latest state of the union address he talked about spending more (what he termed investments) and he couldn't seemingly even reconcile with his own revenue neutral rhetoric from February of last year.  If he were to pay for those new investments with cuts to entitlements it would certainly start to look like spending was on his radar. After all, that probably represents the biggest opportunity to offset net new costs.

Sorry Mr. President, I for one do not accept your words on the debt and deficit at face value.  I can't yet tell you when it might be feasible to believe Obama's serious about spending cuts, but I can safely say that now, is not the time.

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