Research Briefing

Obama Traveling To Nations He Plans To Borrow Billions From In Order To Finance His Reckless Big-Government Experiments, Historic Deficits

AS OBAMA PILES MORE DEBT ONTO HIS ALREADY HISTORIC DEFICITS …

Today, Obama’s Treasury Department To Announce $150 Billion Deficit In Month Of October. “On Thursday, the Treasury will report on the federal budget in October, which is expected to show that the government spent $150 billion more than it took in …” (Neil Irwin, “Twin Deficits Will Help Gauge Economic Health,” The Washington Post, 11/9/09)

Obama Had Record Deficit Of $1.42 Trillion In FY 2009, Three Times More Than Previous Record Last Year. “The Obama administration has released new deficit numbers, and they are not pretty. The deficit for fiscal year 2009, which ended Sept. 30, came in at a record $1.42 trillion, more than triple the record set just last year.” (David Jackson, “Obama Team Makes It Official, Budget Deficit Hits Record. By A Lot,” USA Today’s “The Oval“ Blog, 10/16/09)

Obama’s Budget Creates $9.1 Trillion Deficit Over Next Decade, Nearly The Amount Of Debt America Has Accrued In Its Entire History Up To July 2008 ($9.5 Trillion). (“An Analysis Of The President’s Budgetary Proposals For Fiscal Year 2010,” Congressional Budget Office, June 2009; Public Debt, www.treasurydirect.gov, Accessed 7/20/09)

And Budget Analysts Report Obama’s Deficits Could Grow As High As $14.4 Trillion. ”The Concord Coalition Plausible Baseline, created using the Congressional Budget Office’s (CBO) updated projections, shows that current policy would lead to $14.4 trillion in deficits over the next 10 years … Concord’s plausible baseline uses CBO’s more pessimistic economic assumptions … It shows much larger deficits averaging $1.4 trillion from 2011-2019, or 8 percent of GDP.” (The Concord Coalition, “Concord Coalition Says New Projections Show Need For Health Care Cost Control and Deficit Reduction Plan,” Press Release, 8/25/09)

HE WILL MEET WITH NATIONS THAT HAVE “FATE OF OUR ECONOMY” IN THEIR HANDS

Obama To Visit Japan, Singapore, China And South Korea. “U.S. President Barack Obama leaves on Thursday on his first Asian trip since becoming president … Obama arrives in Tokyo on Nov. 13 … travels to Singapore the evening of Nov. 14 … travels to Shanghai the evening of Nov. 15 … arrives in Seoul the night of Nov. 18.” (Patricia Zengerle, “FACTBOX – Obama Has Busy Itinerary On Whirlwind Asian Tour,” Reuters, 11/10/09)

As Of August, These Countries Combined Own 47 Percent Of America’s Foreign-Held Debt. “Major Foreign Holders Of Treasury Securities (in billions of dollars) … Aug. 2009 … China, 797.1 … Japan, 731 … Singapore, 42 … Korea, 38.7 … Grand Total, 3448.8.” (Simon Rogers, “Federal Deficit: Who Owns America’s Debt?,” The [UK] Guardian’s “Data Blog,” 11/2/09)

• China Is America’s Largest Holder Of Foreign-Held Debt, At 23 Percent. (Simon Rogers, “Federal Deficit: Who Owns America’s Debt?,” The [UK] Guardian’s “Data Blog,” 11/2/09)
• Japan Is America’s Second-Largest Holder Of Foreign-Held Debt, At 22 Percent. (Simon Rogers, “Federal Deficit: Who Owns America’s Debt?,” The [UK] Guardian’s “Data Blog,” 11/2/09)

Brookings Institution Economist Says Increasing Debt Places “Fate Of Our Economy” On America’s Debtors, Including China And Japan. “[W]e are paying an increasing proportion of this interest to foreigners rather than to our own citizens. A little more than half our debt is owned by people in other countries, primarily the Japanese and the Chinese … the present state of affairs perches the fate of our economy rather precariously on the opinion of other nations. If the Chinese decided, for economic or political reasons, to curtail their financing of our debt, our financial markets would be spooked, and a stock-market crash and recession might not be far behind.” (Isabel V. Sawhill, “Ignoring Debt Makes It Get Worse,” The Philadelphia Inquirer, 4/30/06)

INSTEAD OF RECOGNIZING CONSEQUENCES OF HIS RECKLESS DEFICIT SPENDING …

Federal Reserve Chairman Ben Bernanke Says Failing To Lower Deficits “Could Eventually Erode Investor Confidence And Endanger The Economy’s Prospects For Long-Term Health ...” (Jeannine Aversa, “Bernanke: Start Work Now To Curb US Budget Deficit,” The Associated Press, 6/3/09)

Higher Deficits Will Make America Vulnerable To Another Large Financial Crisis. “[T]he possibility makes us unnecessarily vulnerable to what could be a full-scale financial crisis. Due to our fiscal irresponsibility we are losing control of our economic destiny and may be looking at a future where we cannot count on a standard of living that continually improves.” (Alice M. Rivlin and Isabel V. Sawhill, “Why Deficits And Debt Render The United States Vulnerable, Scripps Treasure Coast Newspapers, 2/21/07)

Skyrocketing Interest Rates From Higher Deficits Will Lead To Higher Mortgage Payments For American Homeowners. “Ongoing deficits are a serious threat to the economy. We are living beyond our means and relying on the willingness of foreign nations to provide us financial capital. These countries … could easily stop lending so much money to the United States. Interest rates would then soar … For a family with a typical 30-year mortgage on a $225,000 house, an increase of just two percentage points in the interest rate would add $2,500 to their mortgage payment.” (Alice M. Rivlin and Isabel V. Sawhill, “Why Deficits And Debt Render The United States Vulnerable, Scripps Treasure Coast Newspapers, 2/21/07)

• And Reduce Wages, Lower Living Standards For American Workers. “If they are financed domestically, deficits will gradually divert capital from productive domestic uses, through a rise in interest rates. This diversion reduces the amount of capital available to U.S. workers, lowering their wages and hence their living standards …” (Alan J. Auerbach and William G. Gale, “Deficit: What Caused It, Why It Matters,” CNNMoney.com, 7/30/09)

OBAMA PUSHING HEALTH CARE EXPERIMENT THAT WILL “DIG THE NATION DEEPER INTO DEBT”

CBO Director Says Obama’s Plans For Government-Run Health Care Would Worsen Budget Outlook. “President Obama’s plan to expand health coverage to the uninsured is likely to dig the nation deeper into debt ... ‘Without meaningful reforms, the substantial costs of many current proposals . . . would be much more likely to worsen the long-run budget outlook than to improve it,’ he said. ...” (Lori Montgomery, Shailagh Murray & Ceci Connolly, “Obama’s Health Plan Needs Spending Controls, CBO Says,” The Washington Post, 6/17/09)

Obama’s Health Care Experiment Hides Provision That Would Add Over $200 Billion To Deficit. “The Congressional Budget Office estimates that the House plan to prevent cuts to doctors’ Medicare reimbursement rates would cost $210 billion over 10 years, according to a just released analysis. The big price tag is no surprise and was the main reason House Democrats introduced the so-called ‘doc fix’ legislation separately from their $1.2 trillion reform bill -- Dems were trying to keep the cost of the reform bill as close to President Obama’s target of $900 billion as possible.” (Chris Frates, “BREAKING-CBO Releases Cost Estimate On House Doc Fix,” Politico’s “Live Pulse” Blog, 11/4/09)