CHESSNOID

When Bush was in office, I was always worried about the crazy spending his administration executed.  That took us from the budget surpluses under Clinton into the budget deficits under Bush.  I was worried that the US economy would soon have to suffer under the consequences from all that deficit spending.  8 years later, we are in the most severe recession because of all the prior fiscal irresponsibility.

Now is the time to change things, but under Obama and his administration all I observe is more of the same and a lot more of it.  We are not returning to balanced budgets but instead stepping on the gas pedal to super spending.

NY Times:

Already, in the first six months of this fiscal year, the federal deficit is running at $956.8 billion, or nearly one seventh of gross domestic product — levels not seen since World War II, according to Wrightson ICAP, a research firm.

Debt held by the public is projected by the Congressional Budget Office to rise from 41 percent of gross domestic product in 2008 to 51 percent in 2009 and to a peak of around 54 percent in 2011 before declining again in the following years. For all of 2009, the administration probably needs to borrow about $2 trillion.

The rising tab has prompted warnings from the Treasury that the Congressionally mandated debt ceiling of $12.1 trillion will most likely be breached in the second half of this year.

Last week, the Treasury Borrowing Advisory Committee, a group of industry officials that advises the Treasury on its financing needs, warned about the consequences of higher deficits at a time when tax revenues were “collapsing” by 14 percent in the first half of the fiscal year.

“Given the outlook for the economy, the cost of restoring a smoothly functioning financial system and the pending entitlement obligations to retiring baby boomers,” a report from the committee said, “the fiscal outlook is one of rapidly increasing debt in the years ahead.”

While the real long-term interest rate will not rise immediately, the committee concluded, “such a fiscal path could force real rates notably higher at some point in the future.”

Considering the state of the economy when Obama took over, he doesn’t have the same luxury that Bush had when the country had budget surpluses.   The power of the US money printing presses are overextended.  I think Obama, Geithner, and Bernanke are all kidding themselves and the American people if they think we can literally spend our way out of this recession.  Bush, Paulson and Bernanke have been there and done that… now look at where our economy is .