Federal spending is out of control
By William Reed
There’s considerable confusion surrounding President Obama’s record on spending, debt and deficits. First time around, Barack Obama campaigned for president on a promise “to cut annual federal budget deficits in half” by the end of his first term. As we start his second term, out of control spending and rising federal deficits are significant threats to the country and Obama’s presidential legacy.
The question Blacks and the nation have to deal with straight on is: Do current government spending patterns make sense? Blacks shouldn’t continue as willing partners in this ineffective governance. Since Obama took office, the national debt has increased to more than $16 trillion from about $10.6 trillion. People, Black and white, need to consider the fact that $16 trillion surpasses the total U.S. Gross Domestic Product (GDP).
Three decades ago, the national debt stood at $908 billion. Over the years, Washington spent more than it took in as the debt rose to $10 trillion in 2008. Just two months into Fiscal Year 2013, the government has racked up a mind-blowing nearly $5 billion per day record of deficit spending. This administration has a record of five years of deficit spending in excess of a trillion dollars.
President Obama’s supporters won’t admit it, but gasoline prices, the rate of poverty, food stamp use and the federal debt are worse today than when he first took office. By 2020, public debt in the United States is set to reach the point where accumulated debt pushes our economy to fiscal demise. The Obama administration’s deficit spending is bad policy that’s occurring at unprecedented levels and burying future generations of Americans under a mountain of debt. Black voters have to be cognizant that persistent deficit financing, along with tax increases in hard economic times, are job killers that stifle growth and choke job creation.
There is nothing wrong with Blacks “having Obama’s back” if we were all enjoying high levels of economic success, but continuing to applaud ineptness is dishonest. Suppose you spend more money this month than your income. To keep going you borrow. The amount you now owe is “debt.” You have to pay interest on your debt. If next month you spend more than your income, you must borrow more and still have to pay the interest on your now larger debt. If you keep borrowing, eventually you will reach a point where all you can do is pay the interest and not have money left for anything else. This is known as “bankruptcy.”
Are we racing toward bankruptcy under Obama? In August 2011, the Standard & Poor’s (S&P) rating agency stripped the U.S. government of its prized AAA bond rating because of America’s dysfunctional political system’s inability to deliver plans to reduce the federal government’s debt. All the while, Black Americans suffered yet remained complacent with what is happening. It’s time Black Americans ask themselves: Can these practices go on forever and can we pretend that what has been occurring is “good governance?”
Talk about a racial divide, polls show that Blacks and mainstream America view this economic imperative differently. While 96 percent of Black Americans support Obama and his policies, 85 percent of Americans worry that growing deficit spending will hurt their children and grandchildren, and 56 percent think that within the next decade the red ink will spark a major economic crisis.
Entitlement spending for the big three: Social Security, Medicare and Medicaid accounts for 50 percent of government spending. The Congressional Budget Office concludes entitlement spending in the next 75 years will be responsible for virtually 100 percent of deficits. The American people understand cuts need to be made to what is obviously perceived as a spending problem of immense proportions. The solutions seem fundamentally simple. Drastically reduce spending and cut programs, repeal Obamacare and other hazardous regulations.
Are Black voters, and their political representatives, willing to give the Obama administration authorization to borrow more money to pay for ever-expanding expenditures and continue raising the debt ceiling?
William Reed is head of the Business Exchange Network and available for speaking/seminar projects through ww.baileygroup.org