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Obama delves into spending freeze
President Barack Obama delivers his first State of the Union address in Washington, D.C. -- January 27, 2010
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TEXT OF INTERVIEW
Steve Chiotakis: First, President Obama had plenty to say about deficits in his first official State of the Union address last night. Marketplace's Mitchell Hartman is with us live with a recap of what the president had to say. Good morning, Mitchell.
Hartman: Good morning, Steve.
Chiotakis: So polls show Americans are concerned about rising deficits.
What's the president proposing?
Hartman: Well he fiercely defends the trillion in stimulus spending so far. He
insists it prevented Great Recession from becoming Great Depression. But he says it's time to start trimming. So what he proposes a freeze next year on programs. These are the ones that Congress controls -- things like education, farm programs, national parks. What it doesn't include is the biggest budget sponges -- that's defense, Medicare, Medicaid and Social Security.
Chiotakis: So Mitchell, are Republicans and deficit hawks buying it?
Hartman: Well they generally welcome a freeze, but as sort of a baby step. Here's Scott Bittle of Public Agenda:
Scott Bittle: Certainly it's a step in the right direction, but it's not touching 70 percent of the budget.
Chiotakis: Is there anyway at this point, Mitchell, who thinks we should be increasing the deficit?
Hartman: Well, liberals generally think we need to keep up spending on
things like infrastructure and green energy projects -- really anything to get Americans back to work. And in fact president Obama seems to be on the same page:
President Barack Obama: Some in my own party will argue that we can't address the deficit or freeze government spending when so many are still hurting. And I agree, which is why this freeze won't take effect until next year, when the economy is stronger.
So, rail against deficits this year, hold down spending next year.
Chiotakis: There you go. Marketplace's Mitchell Hartman joining us this morning. Mitchell, thanks.
Hartman: You're welcome, Steve.
"So polls show Americans are concerned about rising deficits. What's the president proposing?"
Your framing implies that deficits are a problem that needs addressing rather than that public opinion is being manipulated. The seminal insight of Keynes is that deficit spending is the way out of severe recessions or depressions. Inadequate stimulus risks repeating the Japanese experience or the American experience in 1937. Financial help for the bottom 95 percent of Americans and our economy has been highly inadequate.
But now that Bush and Obama have printed up $13 trillion and handed it to the financial guys who along with their regulator pals (e.g., Greenspan, Geithner, Bernanke, Paulson, Snow, et al) caused the recession things are looking tight. So in addition to inadequate economic stimulus for the greater good Obama proposes to kick us again while we’re down: freeze federal programs we benefit from except where doing so would reduce campaign contributions from golden goose corporations. Louis XIV would be pleased.
Essentially, ‘our’ government stole $13 trillion from us and transferred it to financial corporations and those who run them. Politicians, in turn, get a cut of the action. Is this government of, by and for the people?
