Obamanomics Supporters – Cracks in the Dike
by Larry Elder at Townhall.com
While the media stopped to cover Michael Jackson’s death, several tremors rocked the foundation of something that actually affects us all — Obamanomics.
First, former Secretary of State Colin Powell, who supported the President over his Republican rival, criticized Obama’s spending, saying “we can’t pay for it all.” Powell said: “I’m concerned at the number of programs that are being presented, the bills associated with these programs and the additional government that will be needed to execute them. … One of the cautions that has to be given to the President — and I’ve talked to some of his people about this — is that you can’t have so many things on the table that you can’t absorb it all.”
Second, a few days ago, respected British economist Tim Congdon dusted off a 2003 paper — written pre-Obama spending — by the Federal Reserve’s senior economist. It warned of the nation’s growing debt and deficit, calculating their impact on long-term interest rates. The Fed’s conclusion? “A percentage point increase in the projected deficit-to-GDP ratio raises the 10-year bond rate expected to prevail five years into the future by 20 to 40 basis points. … Similarly, a percentage point increase in the projected debt-to-GDP ratio raises future interest rates by about 4 to 5 basis points.” In plain English, this means, as Congdon puts it, a “debt explosion.” Applying the 2003 paper’s calculations and assumptions to our debt and deficit numbers under Obama, Congdon sees the “horrifying” consequences of bank bailouts and increased public spending.
Third, billionaire/Obama supporter Warren Buffett warned of impending inflation caused by increased government spending.