Wednesday, June 23, 2010

Obama Tells The Nearly Insolvent Europeans To Keep Deficit Spending

CNN: Europe spurns Obama's plea for more spending

It must be nice to have a background theme to cover your tracks in regards to your own "spending like a drunken sailor". Whereas Obama's immediate past predecessor was attacked as such for his big time deficit spending - Obama is able to:

  • Hit Bush for "Turning a $250 billion surplus into a $1,000 deficit (despite the fact that a Democratic Congress made the appropriations  and Bush controlled the spending from Oct 08 until Jan 20, 2009.  Obama had the federal budget from Jan 21 until September 30 2009
  • Is operating in the current budget - which is on track to have a $1,400 billion deficit
  • Has  a trajectory for deficits above $600 billion through his second term - if elected 

Talk about some nads!!

FORTUNE -- President Obama wants to slow Europe's headlong rush to austerity. But right now he looks like little more than a speed bump for the cutback crowd.

Obama has sought to use the upcoming meeting of the Group of 20 global finance ministers in Canada this weekend as a rallying cry for more fiscal stimulus. He argues that cutting government spending now risks undermining a fragile recovery in debt-soaked Western economies.

"We worked exceptionally hard to restore growth; we cannot let it falter or lose strength now," Obama said in a letter to G-20 leaders last Friday. "This means that we should reaffirm our unity of purpose to provide the policy support necessary to keep economic growth strong."

But the G-20's unity of purpose isn't what it was last year, when the global financial crisis galvanized the group to prop up the world's financial system.

Since Obama issued his call to focus on growth, German Chancellor Angela Merkel called budget cuts "urgently necessary," and European Central Bank President Jean-Claude Trichet said stronger public finances are part of a "policy which we would call confidence-building."

In the most striking contrast, the United Kingdom on Tuesday unveiled a budget that will slash real spending in many government departments by 25% over four years. Katherine Smith of economic research firm IHS Global Insight said the cuts were "truly eye-watering."

The case for cutting now is hardly ironclad. But after two years of costly government bailouts of the financial sector, the case for still more taxpayer largesse is not one many voters are eager to hear.

"Obama has been having difficulties selling that story domestically," said Stewart M. Patrick, a senior fellow at the Council on Foreign Relations in Washington. "Europe is very inward looking right now, and there are some large differences in how they see this issue."