Europe lectures Obama on stimulus and debt

After 16 months and hundreds of billions in debt-financed “stimulus” spending, President Barack Obama is still pushing for more public borrowing to prop up demand, both here and abroad.

Writing to other national leaders ahead of this weekend’s G-20 meeting in Toronto, Obama called for “unity of purpose to provide the policy support necessary to keep economic growth strong.”

Translation: Spend, baby, spend.

But fewer and fewer people are buying it this time.

In Britain, the new government reburied Keynes last week, choosing budget austerity over further stimulus. Germany rebuffed Obama’s requests to keep priming the pump (link requires subscription). The European Union’s economic affairs chief wrote in a Wall Street Journal op-ed that he “cannot but disagree” with the push for more deficit spending.

Getting debt lectures from Europe, the continent that already has brought us the Greek bailout and riots? That’s like leaving it to Lindsay Lohan to tell you to lay off the sauce for a while.

At home, the chairman of the Joint Chiefs, Adm. Mike Mullen, said last week that our national debt is the greatest threat to our security, noting that interest payments on the debt will soon rival our annual defense budget.

In the Senate, Obama’s request for another $100 billion for another “temporary,” “emergency,” I-promise-this-is-the-last-time “jobs” bill fell flat. The measure would have sent tens of billions more to state governments to keep saving the jobs already classified as “saved” by the $862 billion stimulus.

Maybe the stimulus trackers should refer to jobs as saved, created or “merely reprieved” from now on.

Rejection in Toronto would only cap what was already another lousy week for the president: never-ending oil spill, check; illegal-immigrant-amnesty dispute, check; loose-lipped general, check.

But instead of asking whose [bleep] to kick this time, perhaps Obama should listen.

The Europeans, who are even further down the road to debt and government dependence than we are, are essentially saying we all need to stop while we still can.

Britain’s ratio of public debt to gross domestic product is 79 percent; Germany’s, 80 percent; Greece’s, 124 percent.

America’s is at 60 percent and rising fast. We don’t need to wait till we reach continental levels of debt before turning around.

Whatever the merits of deficit spending at the nadir of a recession — and they are debatable at best — trying to buy recovery with taxpayers’ billions can only go on for so long. The gains are only temporary because the money is a loan from the future, not a gift.

We’ve already dragged too much economic activity from the future into the present. The more sales of cars or houses or whatever we borrow from the future, the longer we delay the real recovery.

It’s still possible that, before leaving Toronto, the G-20 leaders will humor Obama and agree to a small mention of stimulus in a communiqué that they’ll stuff in finance-ministry file cabinets shortly after it’s communicated.

If so, don’t be fooled. Government balance sheets are over-stimulated. It just may be that the occupant of the White House is the last person to realize it.

221 comments Add your comment

Rafe Hollister

June 25th, 2010
7:41 pm

Nothing on Barry’s agenda is cost free, so if he can’t spend, he might as well resign. He will try to raise taxes to cover his spending programs, but in this climate, I doubt that there are many more suckers left in the congress to support him.

Rafe Hollister

June 25th, 2010
7:43 pm

But then again, why resign, those green fees might get expensive, if he had to pay out of pocket. Ogolfa he has become.

Billy O

June 25th, 2010
7:48 pm

A constitutional admendment has to be passed that the budget has to be balanced. The politicians are not listening…….NO MORE DEFICIT SPENDING!!!!!!

Gordon

June 25th, 2010
7:54 pm

It’s time to face the music. It’s time to admit that we can’t have the entitlements, defense, and all the other things we have that we don’t pay for.

If we were accounting for the unfunded liabilities that we owe under present law (the way private companies must do), out actual debt to GDP ratio would be well over 100%.

The madness must stop. We are well beyond being flat broke. The financial situation of this country is a bigger problem than every other problem combined. And Obama is working on global warming….

Class of '98

June 25th, 2010
8:02 pm

Wanna know what the scary part is?

He still has millions of supporters who blindly believe that he is sooooooo much smarter than everyone else, and knows exactly what he is doing. They still think he is “playing chess while everyone else plays checkers.”

It’s amazing how being a great teleprompter-reader will carry you in the hearts and minds of some really, really gullible people.

DannyX

June 25th, 2010
8:02 pm

What is the Republican plan for their unfunded Medicare Part D?

How are the Republicans going to pay for their unfunded trillion dollar wars?

How can we afford our $664 billion dollar a year defense budget?

The US government funds half of the state budget of Georgia, how much are the state Republicans willing to give up?

Anyone?

Gordon

June 25th, 2010
8:09 pm

DannyX,

It is a Republican and Democrat problem. George Bush got heat from a lot of people on both sides for his spending, and now Obama is the president so he is getting it, and rightfully so. Congress should get a lot of blame as well, but the real culprit is the American people. We are addicted to other people’s money. We WILL regret this.

John Barnes

June 25th, 2010
8:11 pm

DannyX, waiting for answers from morons who do nothing but talk?

"Information becomes a distraction, a diversion, a form of entertainment" - BHO, May 1, 2010

June 25th, 2010
8:20 pm

The G8 and G20 are planning to eff you right now.

Information is dangerous. Search, share, communicate and assemble.

The “Global Economy” and “Global Government” and “Global Crisis” mean Americans lose in every way.

EFF other countries. Their problems are theirs to deal with.

America can recover from her debt with tough choices….

DannyX

June 25th, 2010
8:21 pm

Gordon, the whole tone of Kyle’s column is “Obama,” not “we’re in this together.”

Maybe you should direct your 8:09 to him.

If Republicans are really serious about controlling the budget first thing they need to do is explain how they plan to fix their own mess. 1- Trillion dollar unfunded wars. 2- Med Part D. 3- Funding of the new Department of Homeland Security. 4- The Bush tax cuts.

Oh, but they’re not serious about controlling the run away deficit are they? They plan on scoring political points.

Whats the plan?

Rafe Hollister

June 25th, 2010
8:21 pm

DannyX: What would a family in debt do? Determine how much is coming in and think of ways to add to it and then divide it up to be spent on absolute emergencies first. Any left would go to less pressing debts.

In other words the Federal Gov should try to raise revenue, thru things like selling off Gov property, parks, land, increasing user fees, but not raise taxes because all families are in almost as bad shape as the Gov. After you decide how much you can reasonably expect to take in, then divide among things that the Constitution requires the Gov to pay for like Defense, transportation, the legal system/courts, etc. If anything is left pay back the money the Feds stole from the SS trust fund. Then work to put money into programs that benefit the least able to take care of themselves, the elderly, disabled, uneducated, etc. Tell the states to go to Heck they are responsible for their own plight. Return all education to the states to fund. Discontinue all foreign aid and funding for any arts, research, etc. That should be a start.

Rafe Hollister

June 25th, 2010
8:24 pm

Forgot interest on the national debt, that has to be paid before we pay anything else or we just get deeper in debt. Danny there is your plan.

ByteMe

June 25th, 2010
8:30 pm

DannyX, you won’t get a decent answer that makes any sense, because no one is ready to face reality. We have trillions in expenses coming up for the retired class, but nothing to pay them except a bunch of IOUs. But the public isn’t ready to talk about taking benefits away from “grandma”, so the pundits will point fingers at this president or that Congress and nothing will change for a while.

Democrat voters = retardation

June 25th, 2010
8:45 pm

“He still has millions of supporters who blindly believe that he is sooooooo much smarter than everyone else”

That’s because those supporters are mostly made up of high school drop outs. Of course he’s smarter than they are.

joan1

June 25th, 2010
8:52 pm

Grandma isn’t the problem. In all likelihood enough was paid in to social security and medicare to cover benefits, but those programs were tapped by Congress to spend on their other favorite projects. It is the fat, lazy, pregnant woman with 3 kids already and feeding them with WIC stamps–there are millions of them in this country, and they are eating up money and it makes no sense to keep supporting them unless they are required to job train, or take low paying jobs. All those little indigent kids could go to a commune–that is what the Chinese did. The kids were commune raised and mom was put to work. There is plenty of trash to pick up on the side of the road, lots of low income cleaning jobs. People should work for a living, or starve.

Lil' Barry Bailout

June 25th, 2010
10:24 pm

The Idiot Messiah’s plan is to print trillions to give away to his parasite base, thereby devaluing the currency. This raises the income of the loser class and impoverishes those who worked and saved.

Don’t forget to thank your favorite Obama voter for screwing you.

Bob

June 25th, 2010
10:28 pm

Obama tell others to spend to give him cover.

Amazed at the Discourse

June 25th, 2010
10:36 pm

Has anyone reading this actually bothered to address (or more pressingly, debunk) the concept of the Keynesian multiplier or the principle of countercyclical economic policies? Is anyone going to try to counter the evidence of recent histories like Liaquat Ahamed’s “Lords of Finance” that the instinct towards financial austerity was a leading cause of the Great Depression? How about refuting the mountains of evidence that investors are irrational at both the top and bottom of an economic cycle, thus forcing policymakers to use the public sector to cool the economy in good times and jump start it in poor times (back to the countercyclical policies again). All I’m seeing is a bunch of vapid political posturing without any attempt to actually parse the distinctions and assumptions that guide our current economic policies.

[...] Read Wingfield’s full post. [...]

Road Scholar

June 26th, 2010
5:27 am

Kyle: In the quote you used , i don’t see the word “spend”! You must then be psychic….in that case give me 6 good numbers to win the lottery!

As for you folks still out of work, go to your conservative federal elected official, and ask them how to support yourselves as you continue to look for a job. Maybe they have an answer? Probably not!

A CONSERVATIVE

June 26th, 2010
6:14 am

FORGET IT…….OBAMA is hell-bent on spending US INTO BANKRUPTSY….for sure….for sure..

Buzz G

June 26th, 2010
6:55 am

It is absolutely wonderful to see Europe finally come to its senses. This is a great day. It will force the U.S. to take a sober look at what it is doing. It won’t change while the Democrats are in power. But it might assure their destruction. And hopefully the Republicans will wake up, sober up, and remove the liberals from their ranks. Liberals like John McCain and Lindsey Graham.

Lil' Barry Bailout

June 26th, 2010
6:55 am

Road Scholar: As for you folks still out of work, go to your conservative federal elected official, and ask them how to support yourselves as you continue to look for a job.
——————–

From their savings accumulated during good economic times. I’m sure that’s what “Amazed at the Discourse would advise, eh? You know, all that “countercyclical” crap?

Lil' Barry Bailout

June 26th, 2010
6:57 am

Amazed at the Discourse
June 25th, 2010
10:36 pm
————————–

Translation: All income and wealth belongs to government, which decides how much of it will be redistributed to the earner.

Barry Soetoro

June 26th, 2010
7:29 am

Great comments to this topic – I am heartened that there are intelligent people out there that get it.

Tax Cheat Timmy said, in effect, that the “world governence” is gaining momentum–just like The Wafer and George Soros and SEIU want.

We are being destroyed from within, and I pray everyday this great country can withstand The Messiah’s onslaught.

Gordon

June 26th, 2010
7:56 am

DannyX @8:21:

Obama is the president. He is supposed to lead on this. When Bush was president, he rightly got heat for this. But now Obama is the president. He talked his way into the job, now he is the one who has to step up and take the heat.

It troubles me that given the horrible financial situation we are in, he concerns himself with global warming, the Arizona law, and other things that are far less important at this point. He isn’t leading.

Tyler Durden

June 26th, 2010
8:06 am

Hmmmm. Lil Moron: regarding the savings from the good times. First, the economy has been in s spiral since just after Clinto left office, so no good times lately in which to save.

Second, your savior, Dubious, INSISTED that we spend, spend, spend during the War on Terrorism™. Remember his many requests?? Probably not, as you’re obviously oblivious to reality like most Conservatives.

Never let the facts get in the way of ideological dogma :-)

Economy Screwed

June 26th, 2010
8:07 am

Amazed at the discourse:
We don’t think Keynes was right, and it’s been proven over and over again by history. Why bother talking about the multiplier? It didn’t appear. You can read the news as well as the rest of us, but hide your own lack of anything of value to say by mentioning big academic words. As far as Lord of Finance, I could find some books that say it was inconsistent, constantly changing government policy that turned a recession into the Great Depression. Why should we talk about your one random guy?

DannyX: Maybe if the Federal Government didn’t take so much in taxes, then they wouldn’t have to give so much back to the states they took it from in the first place. If they have the money to hand out to states, then they have more money than they need.

Here’s some suggestions that have been brought up many a time by many conservatives and libertarians that get ignored by the left, who would prefer to call the GOP the Party of No than actually listen to non-Keynsian economic ideas…. How about raising the age for SS benefits? Say one year for every 3 years that pass, for 15 years. That 5 year difference will go a long, long way towards fixing SS, and it makes sense considering the amount life expectancy has risen since SS started.

Cut the Department of Education. It’s overseen three decades of declining results for our educational system. You can’t tell me that’s money well spent. And district after district has proven that throwing more money at education does not solve anything, except to keep the Teacher’s unions happy.

Get rid of this health care reform bill, which hasn’t saved a dime, but is expected to raise rates for everyone. You can’t have a healthy government unless citizens’ pocketbooks are healthy, and health care reform hurts.

Someone else mentioned selling off government owned land. That’s a great idea. The Federal Government owns far too much land. Why do they need that much? They own a ridiculous portion of the state of Nevada, is there a good reason for it?

Stop the giveaways. Stop stealing car companies from their owners to give to unions. Stop fixing peoples’ mistakes or irresponsible behavior, while leaving those who did it right at a disadvantage.

So many suggestions, and every single one has mentioned time and time again by various conservatives and libertarians all over the place. If you haven’t seen it, then you’re blinders.

hatin' on the stupid

June 26th, 2010
8:09 am

Ah, the great myth of the producers vs the parasites. What have Bortz, Hannity, Limpballs produced other than their contribution to global warming? The GOP owns the lion’s share of the national debt. Why don’t you shut up and let us try to fix the mess you left us in?

TaxPayer

June 26th, 2010
8:18 am

If only the Republicans had not financed everything from wars to prescription drug plans to tax cuts to Wall Street bailouts by borrowing, we would be able to more easily weather a recovery through temporary deficit spending. So, let’s start the spending reductions by cutting into some of that trillion dollar annual DoD budget and go from there. What do ya say!

Real American

June 26th, 2010
8:26 am

But its ok to spend on wars isn’t it Kyle? Right? cuz we needs our FREE-DUMS.

Lil' Barry Bailout

June 26th, 2010
8:42 am

Tyler Durden: the economy has been in s spiral since just after Clinto left office
—————————————

I’ve charted the growth in my net worth since 2000, and I have to tell you that you don’t know what you’re clearly wrong on this!

Lil' Barry Bailout

June 26th, 2010
8:46 am

hatin’ on the stupid: Why don’t you shut up and let us try to fix the mess you left us in?
———————–

Unemployment has gone UP under the Idiot Messiah. The federal budget proposed by the Idiot Messiah is out of control. The annual deficit is now counted in the trillions…when the Democrats started writing budgets in 2007, they inherited a deficit of only $160 billion. The Afghanistan war has gone to hell under the Idiot Messiah. Gitmo is still open.

What exactly is it that the Barack Buffoon has fixed?

@@

June 26th, 2010
8:47 am

Maybe we should refer to Obama’s “jobs” as hidden “assets”?

Obama needs to understand that when it comes to the interest of other countries, they’ll have no problem putting his “bottom” on the line.

He should’a seen this one coming, but it’s hard to see when his head’s in the clouds.

Lil' Barry Bailout

June 26th, 2010
9:03 am

Barry Buffoon will play the part of the court jester while the adults at the G-20 (Germany, China) make the decisions. Under our President Bush, some folks might not have liked us but at least they respected us. Now, Barry has to beg to be allowed to sit at the table and is mocked as a retard.

Lil' Barry Bailout

June 26th, 2010
9:12 am

From the AP, on the Idiot Messiah’s financial “reform” bill:

“Large U.S. banks and foreign banks with operations in the United States are already evaluating what operations they can move abroad to avoid stricter U.S. regulation on their operations, analysts said Friday.”
——————————

Heckuva job, Barry Buffoon!

neo-Carlinist

June 26th, 2010
9:18 am

they say insanity is doing the same thing over and over, and expecting a different result – I must be insane. there are no deficits, bailouts, tax cuts, or parasites. this is business as usual in DC, and as I mentioned last week, there is as sad irony in the fact that while Obama campaigned promising “transparencey” his is most transparent in it’s resemblence to the Bush years – that is to say secretive re: backroom deals, but very open about letting us “see” the secrecy. Bush overspent in the areas noted (wars, DHS, tax cuts, TARP, and Medicaid revamp) and Obama is continuing via his ramp up in Afghanistan, his addiction to “stimuluous bills” and his healthcare fantasies. Does it really matter to taxpayers if their income goes to General Dynamics, Blackwater and Lockheed, or Kaiser Permanente, Aetna, or Bank of America? ALL politicians are business agents for corporate America. Bush didn’t care anymore about “homeland security” or “avenging 9/11″ anymore than Obama cares about “healthcare for working Americans” or “keeping Americans in their homes via mortage bailouts”. And NEITHER care(d) about “jobs” beyond the political capital claiming to “create jobs” brings. On a lighter note, what f**l is up with Obama’s interest in golf? I don’t think it’s as bad as some tomato throwers would have us believe, but seriously; he’s gonna have the rest of his life to work on his game (on a fat government pension, with lifetime secret service protection, by the way). do your job and do the “retirement” stuff in 2013. it’s like when Cheney shot his hunting buddy. I am a hunter, but with two wars, and the ominous “terrorist” threat, who has time to go hunting? does Cheney think Osama bin Laden take a week off to go hunting or fly fishing?

Tyler Durden

June 26th, 2010
9:23 am

Li Moron: your scientific analysis, like your argument in general, would have to be upgraded to be merely inadequate.

Thanks for making the Progressives look smarter than we actually are :-)

neo-Carlinist

June 26th, 2010
9:31 am

Li’l Barry… I really wish you would drop the “idiot messiah” stuff. don’t get me wrong, the “messiah” tag is very appropriate, but to those who view him as a messiah, he is not an idiot (plus the name comes from the right. go figure?). and truth be told, I don’t disagree with you, but as previously posted, if you are determined to use names like Li’l Barry bailout and idiot messiah, you need to start referring to his predecessor as “Georgie bailout” and “trust fund baby”. You know, I had something of an epiphany on this blog a few days ago. Once you accept that Bush really never promised Americans anything beyond the red meat stuff like “freedom” and “security” – the success or failure of which is subject to debate, and tax cuts, which he did deliver (albeit, ingorning the long view of such a promist), he was a “good” president in that he most certainly delivered on his promises to his true constituents (business interests). Obama, on the other hand is a text book liberal “pleaser”. he will make a promise, regardless of audacity, because he wants Americans to feel like their lives/votes matter. I’m not saying one is better than the other, but I will give Bush credit for his honesty (brutal as it may be).

JKL2

June 26th, 2010
9:55 am

Lil’ Barry- The federal budget proposed by the Idiot Messiah is out of control.

I thought the demwits said they weren’t going to come out with a budget until after the elections because it would only make them look worse?

Left wing management

June 26th, 2010
9:57 am

Funny. The words “health care” or “social security” don’t seem to have mentioned here. Curious, then, the lecture of debt, given that the author’s party has no answer to the above issues other than just liberalize, liberalize,liberalize (translation for FOX News addled Americans: privatize, privatize, privatize).

JKL2

June 26th, 2010
10:01 am

dannyx-

Yes, Bush spent too much money trying to suck up and play nice with the democrats. Now that Obama is in the WH, spending like a drunken Sailor(no offense to drunks or Sailors) is the solution?

Just saying “I wasn’t the only one doing it” might have been a good excuse when you were 5, but it doesn’t work here in big boy world.

Yes, we need to cut defense spending. We also need to cut everything else. Sorry, some people will be hurt, but prolonging everyone’s agony and turning us into Mexico is even worse.

JKL2

June 26th, 2010
10:11 am

left wing-

Charity works best when pushed down to the lowest level. Isn’t privatized the lowest level? Get rid of the bureaucracy and everyone will be better off (except for the bureaurocrats who are the only people that can get a job under Obama’s lazer-like focus on job creation).

DannyX

June 26th, 2010
10:19 am

“Yes, Bush spent too much money trying to suck up and play nice with the democrats.”

This an example of a 5 year-old argument. How does this work in the big boy world?

Left wing management

June 26th, 2010
10:54 am

JKL2 –

“Charity works best when pushed down to the lowest level. Isn’t privatized the lowest level?”

Are you sure? What if taking it at the “top” eliminates the need for it altogether? Or, looked at in reverse: what if we eliminated any and all social safety net and let the fate of the dirt poor depend 100% on the kindness and generosity and volunteerism of private citizens? Do you think that would work any better? I doubt it.

But in any case, all that is based on this notion that the “marketplace” (of labor, of money, charity, whatever) is a rational thing. And as we know, there is nothing whatsoever that is rational about the marketplace.

DannyX

June 26th, 2010
10:58 am

Your tax dollars at work………………

Another one bites the dust. In the past 2 years 39 Georgia based banks have failed.

Included in that total is a bank partly owned by U.S. Rep. Paul Broun (Republican) that cost taxpayers $123 million dollars.

Now lets hear those arguments from our 5 year old bloggers claiming that the bank failures are all the fault of “Bwaney Fwank.”

JKL2

June 26th, 2010
10:59 am

dannyx- 1- Trillion dollar unfunded wars. 2- Med Part D. 3- Funding of the new Department of Homeland Security. 4- The Bush tax cuts.

1. The last I checked, the demwits voted for all of these. I thought Obama promised to end them. How’s that working out?

2. Second worse thing Bush did. Definent bi-partisan effort on this one.

3. Your really against Homeland Security? I didn’t really think we needed it (mostly had to knock down all the walls put up by Clinton to help keep him in office). If it saves money, get rid of it. Just wondering where the 158 new departments started by Obamacare fits into all this?

4. I thought Obama said 95% of America would see a tax decrease. Now your against that too?

JKL2

June 26th, 2010
11:03 am

dannyx-

Too smart for me. Giving Freddie and Fannie an open checkbook is working out so well.

I guess we should just bailout the whole world. Everything would just be rainbows and unicorns. I can’t imagine where we would be without such a charasmatic leader in the White House. Maybe it would help if he apologized to the bank before it closed?

Morrus

June 26th, 2010
11:11 am

Curiously, in a supposed anti-incumbent year, most of the departing are not retiring but seeking higher office. We may recycle more than we replace. The bad news is that a frustrating 114 seats still have but one contestant. Two of them aren’t even incumbents, meaning they will affect state policy without being vetted by voters. And I have to think that we’d be better off if many had run instead for the Legislature — and cut down on the number running unopposed. Georgia’s problems are numerous. They aren’t going away. There’s too much stale thinking at the Capitol, on both sides of the aisle. New voices would be welcome.

JKL2

June 26th, 2010
11:18 am

Morrus-

Just curious. Do you have that post on your desktop? If I see that recycle line one more time I think I’ll puke.

I thought Obama was about change? Explain how this fits into your recycle the same old fossils example?

Nancy said we need to “drain the swamp”. She should start by looking in the mirror.