Obama Says U.S. Long-Term Debt Load ‘Unsustainable’

[SnyderShrugged]

Ummmmm. A little late Mr. President. :doh: Maybe you should have had these thoughts for your first 100 days and maybe, just maybe, it should be in the equasion when considerring your other monstrous programs you insist are "needed".

http://www.bloomberg.com/apps/news?pid=20601087&sid=aJsSb4qtILhg&refer=worldwide

May 14 (Bloomberg) -- President Barack Obama, calling current deficit spending “unsustainable,” warned of skyrocketing interest rates for consumers if the U.S. continues to finance government by borrowing from other countries.

“We can’t keep on just borrowing from China,” Obama said at a town-hall meeting in Rio Rancho, New Mexico, outside Albuquerque. “We have to pay interest on that debt, and that means we are mortgaging our children’s future with more and more debt.”

Holders of U.S. debt will eventually “get tired” of buying it, causing interest rates on everything from auto loans to home mortgages to increase, Obama said. “It will have a dampening effect on our economy.”

Earlier this week, the Obama administration revised its own budget estimates and raised the projected deficit for this year to a record $1.84 trillion, up 5 percent from the February estimate. The revision for the 2010 fiscal year estimated the deficit at $1.26 trillion, up 7.4 percent from the February figure. The White House Office of Management and Budget also projected next year’s budget will end up at $3.59 trillion, compared with the $3.55 trillion it estimated previously.

Two weeks ago, the president proposed $17 billion in budget cuts, with plans to eliminate or reduce 121 federal programs. Republicans ridiculed the amount, saying that it represented one-half of 1 percent of the entire budget. They noted that Obama is seeking an $81 billion increase in other spending.

Entitlement Programs

In his New Mexico appearance, the president pledged to work with Congress to shore up entitlement programs such as Social Security and Medicare. He also said he was confident that the House and Senate would pass health-care overhaul bills by August.

“Most of what is driving us into debt is health care, so we have to drive down costs,” he said.

Obama prodded Congress to pass restrictions on credit-card issuers, saying consumers need “strong and reliable” protection from unfair practices and hidden fees.

“It’s time for reform that’s built on transparency, accountability, and mutual responsibility, values fundamental to the new foundation we seek to build for our economy,” the president said.

Obama called on Congress to send to him by May 25 a bill that would clamp down on what he says are sudden rate increases, unfair penalties and hidden fees. He also wants the measure to strengthen monitoring of credit-card companies.

House Bill

The U.S. House of Representatives passed the credit-card bill last month after adding a provision requiring banks to apply consumers’ payments to balances with the highest interest rates first. The bill also imposes limits on card interest rates and fees.

The Senate continued debating its version of the bill today. It would require credit-card companies to give 45 days’ notice before increasing an interest rate. It would prohibit retroactive rate increases on existing balances unless a consumer was 60 days late with a payment.

The president said Americans have been hooked on their credit cards and share some blame for the current system. “We have been complicit in these problems,” he said. “We have to change how we operate. These practices have only grown worse in the midst of this recession.”

The American Bankers Association, which represents card issuers, has warned lawmakers and the Obama administration against taking punitive action or setting requirements that are too stringent. Doing so, the lobby group says, would limit consumer credit and worsen a credit crunch.

Obama said that restrictions “shouldn’t diminish consumers’ access to credit.”

Uncollectible Debt

Uncollectible credit-card debt rose to 8.82 percent in February, the most in the 20 years that Moody’s Investors Service Inc. has kept records. Lawmakers have said they’re under increasing pressure from constituents to respond to rising interest rates and abrupt changes to consumers’ accounts.

Obama held a White House meeting last month with executives from the credit-card industry, including representatives from Bank of America Corp. and American Express Co. Afterward, he told reporters that credit-card issuers should be prohibited from imposing “unfair” rate increases on consumers and should offer the public credit terms that are easier to understand.

“The days of any time, any increase, anything goes -- rate hike, late fees -- that must end,” Obama said today at Rio Rancho High School. We’re going to require clarity and transparency from now on.”

He also said the steps he has taken to stimulate the economy and start the debate on overhauling the health-care system are beginning to take effect.

‘Beginning to Turn’

“We’ve got a long way to go before we put this recession behind us,” Obama said. “But we do know that the gears of our economy, our economic engine, are slowly beginning to turn.”

Taking questions from the audience, Obama repeated his stance that he wants legislation to overhaul the health-care system finished before the end of the year, saying it is vital to the economy.

Health-care costs are driving up the nation’s debt and burdening entitlement programs such as Medicare, the government- run insurance program for those 65 and older and the disabled.

The programs’ trustees reported May 13 that the Social Security trust fund will run out of assets in 2037, four years sooner than forecast, and Medicare’s hospital fund will run dry by 2017, two years earlier than predicted a year ago

[twa]

Just laying the groundwork for the other shoe to drop.

You know those pesky tax increases the 'other' guy was gonna pay?

Well it has now become critical that you all share the burden.

For the good of the country

Did ya catch him warning of the coming inflation the other day?...better lube up

[SnyderShrugged]

It's rather comical that the article starts with "unsustainable debt" and then ends supporting a program that will blow the debt up to huge proportions.

[SnyderShrugged]

Just laying the groundwork for the other shoe to drop.

You know those pesky tax increases the 'other' guy was gonna pay?

Well it has now become critical that you all share the burden.

For the good of the country

Did ya catch him warning of the coming inflation the other day?...better lube up

It's so disingenuous it makes me want to puke. Speaking out of both sides of his mouth.

[Thiebear]

Taxes... get your taxes here... new forms for all..

We'll if we pull back the 800 billion since the economy is improving without it..

that would pay a large chunk.

[JMS]

Taxes... get your taxes here... new forms for all..

We'll if we pull back the 800 billion since the economy is improving without it..

that would pay a large chunk.

You guys need to count to ten and stop hypervenalating.... If you want fiscal disipline over the last fourty years you need to talk to the Democrats, not the Republicans.

Even Johnson with his war on poverty and his escalation of the war in Vietnam didn't deficit spend like Nixon, Reagan, Bush I and Bush II. Now I'm not saying Reagan and Bush I were as worthless as Bush II, but what I'm saying is folks looking for fiscal responsibility had a lot less to worry about historically by the documented records of Johnson, Carter, and Clinton than the affore mentioned GOP leaders.

Now as for Obama, I don't know what you are griping about. His deficite including the stimulus package and war budgets he inherited is still roughly the same as the 2009 budget Obama inherited from Bush. That's right you guys are blasting Obama for this huge crime of fiscal irresponsibillity because he's refusing to cut the budget he inherited from Bush while the country is in an economic depression with about 10% adjusted unemployment and 16% unadjusted unemployment. Obama has already said he will cut that deficite in half by the end of his first term in office, something Bush never even attempted; actually cutting spending...

As for taxes. People it's not fiscally responsible, much less conservative to spend spend spend and just wrack up the debt; It's actually a conservative value to pay for what you spend rather than putting it on debt. It's just not a conservative value the GOP has embrased in more than a generation.

[SkinsHokieFan]

Thanks for stating the obvious Mr. President!

[JMS]

Taxes... get your taxes here... new forms for all..

We'll if we pull back the 800 billion since the economy is improving without it..

that would pay a large chunk.

You mean the stock market is improving without the stimulus. The economy is still a basket case. 10% adjusted unemployment, 16% unadjusted. Think of that! In the 1930's they didn't adjust unemployment and 16% is as bad as it was as the depth of the depression (1928, 29 and 30). Unemployment is still growing every month too.. 15 record setting months in a row. ( record is most American recieving unemployment benifits).

[Koolblue13]

He is now saying what the "loons" have been saying for over the last six years.

Way to catch up new guy.

[BKSkinsFan]

Son of a @@$&$# would you just legalize marijuana and tax it!!! Budget solved, prison overpopulation problem gone. Done and done.

[SnyderShrugged]

You guys need to count to ten and stop hypervenalating.... If you want fiscal disipline over the last fourty years you need to talk to the Democrats, not the Republicans.

Even Johnson with his war on poverty and his escalation of the war in Vietnam didn't deficit spend like Nixon, Reagan, Bush I and Bush II. Now I'm not saying Reagan and Bush I were as worthless as Bush II, but what I'm saying is folks looking for fiscal responsibility had a lot less to worry about historically by the documented records of Johnson, Carter, and Clinton than the affore mentioned GOP leaders.

Now as for Obama, I don't know what you are griping about. His deficite including the stimulus package and war budgets he inherited is still roughly the same as the 2009 budget Obama inherited from Bush. That's right you guys are blasting Obama for this huge crime of fiscal irresponsibillity because he's refusing to cut the budget he inherited from Bush while the country is in an economic depression with about 10% adjusted unemployment and 16% unadjusted unemployment. Obama has already said he will cut that deficite in half by the end of his first term in office, something Bush never even attempted; actually cutting spending...

As for taxes. People it's not fiscally responsible, much less conservative to spend spend spend and just wrack up the debt; It's actually a conservative value to pay for what you spend rather than putting it on debt. It's just not a conservative value the GOP has embrased in more than a generation.

Someday you will realize that there really isnt much difference between the 2 parties in terms of fiscal discipline. Just differences in where the spending goes. Both are wrong.

[JMS]

Someday you will realize that there really isnt much difference between the 2 parties in terms of fiscal discipline. Just differences in where the spending goes. Both are wrong.

That's an argument for apathy. Doesn't matter what they do, their both the same. Don't bother me with reality, I'm enjoying my manufactured fantasy.

I'll agree the differences in the parties aren't nearly as profound as they would have us believe. I do think the GOP leadership which came to the fore front under Bush was exceptionally, historically poor at their jobs. I also believe the current GOP leadership is rightfully tainted with there predisessors failures. That won't always be the case but it is right now, a significant number of conservatives don't even think the GOP is worthy of their support based on their track record.

Now as for the historical differences between the parties with regards to fiscal disipline. I don't think reallity supports your assertion. Reality is the Democrates have not always been better stwards of the economy, Carter for example was horrable economically. However the Democrats have in the last 40 years had more conservative policies with regards to fiscal deficits.

Carter fiscally was much more conservative with regards to deficits than any of the Republicans who followed him into office. Hell the worst Democratic offender with regards to liberal spending was Johnson and even he was better than the GOP candidates of Nixon, Reagan, Bush I and Bush II with regards to deficit spending.

It's truely a facad that the GOP is more fiscally conservative than the Democrats. It's a facad which is growing pretty transparant too.

The double standard with regards to Obama among the GOP unwashed masses is pretty incredible. Complaining about Obama's budgets is pretty unsupportable. Obama after all is pretty much holding spending constant in his first budget of 2010 from what he inherited in 2009 from Bush's last budget. The big difference is Obama is putting all the spending on budget, where bush kept a significant amount of spending off budget. Also Obama has stated his budget deficit ( which he inherited ) will be cut in half over his first four years in office. If he accomplishes that it will be more fiscally conservative than any GOP president in a generation.

Thinking Obama should cut government spending in this time of near economic Depression is just crazy talk. If the US economy contracts by 50% like the stock market has or 90% as the Russian stock market has; we will be in even worse shape economically than if we contract by 5% and get everybody productive again quickly even if we do have to borrow a few trillion to accomplish it..

[twa]

He is now saying what the "loons" have been saying for over the last six years.

Way to catch up new guy.

Try telling people what they want to hear,I understand you get elected that way;)

[JMS]

Try telling people what they want to hear,I understand you get elected that way;)

I think Obama has been pretty transparent in his actions with regards to what he said he was going to do in the election. Where he has changed policy he has moderated it and made it more centrist, not less centrist...

I don't think Obama ever said fixing the economy was going to be simple, or cheap, just necessary.

One more thing, Obama's spend your way out of economic rough patches has pretty much been standard policy for both party's for sixty years.

[stanleys]

I think Obama has been pretty transparent in his actions with regards to what he said he was going to do in the election. Where he has changed policy he has moderated it and made it more centrist, not less centrist...

I don't think Obama ever said fixing the economy was going to be simple, or cheap, just necessary.

One more thing, Obama's spend your way out of economic rough patches has pretty much been standard policy for both party's for sixty years.

Wow. You consider taking over a major automaker and handing it to the union instead or its rightful creditors to be "centrist"?

[The Brave Little Toaster Oven]

Thanks for stating the obvious Mr. President!

You would have thought that he knew that beforehand. :doh:

[alexey]

Someday you will realize that there really isnt much difference between the 2 parties in terms of fiscal discipline. Just differences in where the spending goes. Both are wrong.

Let's not be silly and diminish the difference in where the spending goes. Obviously it makes a huge difference.

We can argue about whether and how our Government should invest our tax dollars, though. Let's use the Interstate Highway System as an example. What's your view on that?

[twa]

Wow. You consider taking over a major automaker and handing it to the union instead or its rightful creditors to be "centrist"?

How about holding state stimulus funds hostage ove union issues?

I think he has a different version of Centrist:)

[JMS]

Wow. You consider taking over a major automaker and handing it to the union instead or its rightful creditors to be "centrist"?

First off bailing out an industry which employs directly or indirectly a million Americans isn't unpresidented or particularly on the political fringe. Both parties have done this, cause sometimes it's economically the smart play.

You can compare it to the Chrisler bail out under Carter in the late 70's.

The Saveings and Loan Bail out under Reagan and Bush in 80's and 90's.

or the Bank bail out under Bush and ongoing.

As for the Union it was a creditor too. the Union had a lawful contract with the company for retirement and healthcare benifits which they threw into the kitty. Fact is the "creditors" stood to loose everything if the federal government didn't act. The unions played ball and negotiated reductions in the company obligations in exchange for equity just like the creditors were doing. Only the creditors wanted more than 25% of the company in exchange for their interests and pushed the company into bankrupcy. That's their right. Personally I think they were foolish. They would have done better by playing ball and keeping the company solvent.

[twa]

The Union was a unsecured creditor,a important distinction.

Or it "used"to be:saber:

[deejaydana]

The one item which both parties are completely guilty is the complete lack of any dialogue about reforming our exploding entitlement programs. Even if we hadn't suffered through the financial meltdown of the past year we were on a course of financial destruction. It's even more important to address this now even though it represents the political 'third rail' as it touches seniors, that most loyal and consistent voting bloc in the electorate. Too bad nobody in Washington has the stones to address this matter.

[Art Monk Fan]

Son of a @@$&$# would you just legalize marijuana and tax it!!! Budget solved, prison overpopulation problem gone. Done and done.

That wouldnt' really be the panacea some make it out to be: www.npr.org/templates/story/story.php?storyId=103276152

[JMS]

The Union was a unsecured creditor,a important distinction.

Or it "used"to be:saber:

? In a bankrupcy, employees get paid first, not last. Employees come before secured loans in the priority of claims. Chrysler owed the Unions retirement contributions, healthcare contributions and wages. non of which would fall under "unsecured loans".

[JMS]

The one item which both parties are completely guilty is the complete lack of any dialogue about reforming our exploding entitlement programs. Even if we hadn't suffered through the financial meltdown of the past year we were on a course of financial destruction. It's even more important to address this now even though it represents the political 'third rail' as it touches seniors, that most loyal and consistent voting bloc in the electorate. Too bad nobody in Washington has the stones to address this matter.

Again that's technically backwards. It's our lack of an entitlement program which is currently crushing our industry. Germany and Japan the two most industrial models for exporting countries in the world both have a significantly greater entitlement program than the United States, and significantly more regulations for industries to cope with to go with those entitlements. Our problem is we place the burden on our industries to give healthcare and other benifits while the more sucessful model is to place the burden broader across the economy and from the government.

Fact is their is no sucessful modern model of industry based on fewer entitlements than we provide or fewer government regulations.... Every other industrialized country in the world is to the left on these issues including the countries currently kicking our butts.

[PleaseBlitz]

Anyone else feel like the Prez is setting us all up for something.

Step 1) Pass budget with $1.8 trillion in deficit spending.

Step 2) Claim debt is unsustainable.

Step 3) ?????

Step 4) Profit.