Research

Reuters reports that Obama’s Budget Chief Peter Orszag told Obama’s “Show Me The Vat” Commission today that the U.S.’s deficits would cause problems in the future:

Orszag warned that huge deficits could cause the market to lose confidence in a government's creditworthiness. Out-of-control deficits could also “require increased borrowing abroad which will mortgage our future income to foreign creditors.”

If Orszag believes this is the case, why did he write a budget for Obama that sets record levels of deficit and debt that could lead to these consequences?  As we’ve pointed out before, China already owns $800 billion of our debt and as a result of Obama’s binge spending we will spend more this year on debt service than any other top rated country (except the U.K.) As Obama’s binge spending continues, the situation will only become worse as foreign investors become increasingly worried about our debt and as a result interest rates on our debt will increase as demand falls.

Unfortunately, we know that if Obama does attempt to bring down our debt, it will be through higher taxes on the middle class instead of curbing his binge spending.