By Bill Wilson -
CNBC commentator Rick Santelli has a very simple solution to the nation’s fiscal and economic woes for Barack Obama and Congress: “Stop spending!” Speaking on Squawk Box on Monday, Santelli noted the cool reception that Obama received this past weekend at the G20 summit in Toronto that sought to address the sovereign debt crisis.
Unfortunately, Obama is apparently the only leader on Earth who doesn’t think there is an overspending problem with government. Despite a $13 trillion national debt at home, he urged world leaders to ratchet up the deficit-spending — only to find that the world has gone chilly on the idea of “stimulus” in the wake of the debt crisis.
As Santelli stated, “[German Chancellor] Merkel’s done, Europe’s done, because the voting electorate has said they’re done.” On the domestic front, Santelli also pointed out that the American people want Congress to end “stimulus”, too: “[Government] did [step in]. And a couple of trillion dollars later, they’re done, because the taxpayers are the people voting, and they’re done.”
Now someone just needs to tell Obama.
In a June 16th letter to G20 leaders, Obama warned that governments must “learn from the consequential mistakes of the past when stimulus was too quickly withdrawn”. Instead, leaders fearful of default fortunately resolved to “avoid leaving future generations with a legacy of deficits and debt” and adopted a proposal by Canada Prime Minister Stephen Harper to cut deficits in half by 2013.
Obama had touted a similar “commitment” in his letter to world leaders, although he’s comparing the 2009 increase in the national debt of $1.911 trillion to his proposed $1.117 trillion increase for 2013. Which is not at all reassuring when he talks about “setting a credible medium-term fiscal path”.
The truth is that it’s hardly credible.
The best Obama could get from the G20 was an acknowledgment of last year’s “big plan” for the world to spend its way to recovery — even as the statement went on to declare that that plan is all but dead. The G20 warned that if action is not taken, “fiscal deficits and debt in some advanced economies [will] reach unacceptably high levels.”
Obama settled on language that offered him some cover for his present political slush fund, which called for governments to “follow through on delivering existing stimulus plans.” In other words, not to divert the monies that already were committed. Which, for Europe, is no problem, since they’ve already run out of money.
The effect, however, was to reduce the leader of the free world to a meaningless footnote in an otherwise serious multilateral policy declaration, the substance of which aired on the side of fiscal consolidation. Everyone gets it but Obama. All he did was muddy up the language.
While the rest of the world is taking on the grave and growing problem of unsustainable sovereign debt, Obama calls for more spending. He has asked Congress for another $47 billion to balance state budgets this year, including $23 billion to bail out unsustainable public school spending.
Congress has not yet bitten, however, feeling the pressure of taxpayers. So, Obama whittled down the state education bailout to $10 billion, and wants it attached to a must-pass war supplemental. He still doesn’t get it.
Santelli is right. With the threat of default looming over the world’s economy, taxpayers are done — with deficit-spending.
Bill Wilson is the President of Americans for Limited Government.