Obama: Cutting deficit as important as job growth

[DJ13]

Sat Jan 30, 8:47 am ET

WASHINGTON – President Barack Obama said Saturday that trimming budget deficits is as important as creating jobs, his top domestic priority this year, to continue the economic recovery that appears under way.

The government reported Friday the economy grew at an annual rate of 5.7 percent in the final three months of 2009. It was the second consecutive quarter of growth and the fastest rate in more than six years.

"A sign of progress," Obama said in his weekly radio and Internet address. "But as we work to create jobs, it is critical that we rein in the budget deficits we've been accumulating for far too long."

Hammered by Republicans for billions of dollars in spending that added to the deficit, Obama outlined steps he said would rein in spending. They include rules requiring that spending or tax cuts be offset by cuts to other programs or tax increases, a freeze on most discretionary spending and a presidentially appointed commission to recommend ways to reduce the deficit.

http://news.yahoo.com/s/ap/20100130/ap_on_go_pr_wh/us_obama_deficit

:banghead:

[Cary]

1. What makes you think the two are unrelated?

Where do you think government revenue comes from?

[DJ13]

2. Read up on the Great Depression

Cutting spending is the worst thing you can do in this economic environment.

[Cary]

5. I have a degree in economics and am very much a Keynesian

I said nothing about cutting spending. I was referring to increased tax revenue as unemployment declined. Moreover higher employment does reduce spending automatically.

[DJ13]

6. Then you should recognize that in the current economy only government

has the ability to spend enough money to keep our economy going.

The consumers dont, businesses wont, its up to the government.

In that climate what rational person (non conservative) considers the deficit as important as employment?

The government has to spend, the deficits will come down when employment returns and the tax base increases.

I shouldnt need to tell someone with your credentials that.

[Cary]

7. I recognize

that anyone who tells you that they know what's going to happen more than a few months from now is a liar.

I have a BA in economics. I don't consider that to be credentials in economics--just enough to know a little bit about the subject.

You have the general idea. GDP = Consumer spending + Investment + Government spending + Exports - Imports. Therefore if C and I are down, G can pick up the slack. The federal government is not like you or I because you cannot foreclose on the federal government and because it can print money. However that doesn't mean you should spend recklessly.

It's a little more complicated than that but the other side of this is that you generally want to catch up on the debt when the economy is in a sustained recovery.

Go watch Jared Bernstein with Rachel Maddow on January 25. Bernstein is a good economist and he explains the administration's position on spending. Rachel doesn't seem to be that satisfied with his explanation but he does have one.

I'm pretty sure they're smart enough to take the right actions if we're not in a sustained recovery in 2011. As he said, they aren't going to be doing any "stupid Hooverism."

[theoldman]

3. As jobs increase, tax income increases and the dept goes down

provided you don't increase spending. What is so hard to understand about this.

[msongs]

4. except for wars, killing, murder of women n kids n all that other stuff nt

[paulk]

8. I hope this is just rhetoric

you know, that multi-dimensional chess thing...