Obama: Our Out-of-Control Debt Is 'Sustainable' for the Next Decade
Obama's statement denying "an immediate (debt) crisis" is consistent with what he was willing to reveal during the 2012 presidential campaign. In October of last year, while unable to identify its amount, he told David Letterman that "we don’t have to worry about it short term." He also said that "it is a problem long term and even medium term."
That's not what Obama told Stephanopoulos in his Wednesday interview. In his very next sentence following the excerpt above, the president did a complete about-face:
In fact, for the next ten years, it’s gonna be in a sustainable place.
Gosh, I had no idea that the nation's financial situation has improved so much in the past five months. Of course, it hasn't.
Even given his pathetic opponent, Obama's ridiculous assertion might have buried him electorally if he had uttered it during the presidential campaign. Assuming he really believes it, he should have. Instead, as has so often been the case, he chose to mislead the American people. "Progressives" have known for decades that they can't win elections if they tell us what they really believe.
The CBO's projection leaves 2023 "debt held by the public" at 77 percent of the nation's annual economic output, or gross domestic product, up from about 41 percent at the end of fiscal 2008. That's not all that far from the 90 percent of GDP threshold at which many economists consider a nation to be "maxed out," i.e., the point at which lenders will likely "either decide to stop lending or raise their interest rates."
There are plenty of reasons to believe that we'll hit that 90 percent limit well ahead of 2023. The most important is lackluster employment growth -- and yes, it's still lackluster despite last week's news that the economy added 236,000 seasonally adjusted jobs in February and that the unemployment rate dropped to a still completely unacceptable 7.7 percent.
Job growth is not "accelerating," the term used after the report's issuance by the Associated Press, aka the Administration's Press. The raw numbers before seasonal adjustment show that the economy lost more net jobs during the past four months than it did during the same four months a year earlier.
To the extent job growth is occurring, it's largely part-time and temporary in nature. After seasonal adjustment, the government's monthly Household Survey, which is the basis for the reported unemployment rate, tells us that there were 77,000 fewer full-timers in February than in January, but 102,000 more part-timers. The Establishment Survey, the basis for reported job growth, tells us that temporary help services, a sector which contains about two percent of all employment, have added a seasonally adjusted 109,000 jobs in the past 12 months. That's over 5.5 percent of all private-sector job growth during that time.
We haven't seen anything yet. Just wait until employers fully grasp ObamaCare's impact on their operations. The bias towards hiring part-time workers is what will "accelerate." Part-time workers pay less in federal income and employment taxes. This will lead to significantly lower federal tax collections, higher deficits than CBO expects, and faster growth in the national debt.
It's still not inconceivable that we will become "maxed out" by the end of Obama's second term -- especially because the president insists, as he told John Boehner during "fiscal cliff" discussions, that "we don't have a spending problem." Oh yes we do -- and if we don't fix it, an abyss which no amount of punitive taxation will prevent awaits.
(Illustration above based on a modified Shutterstock.com image.)