Friday, July 15, 2011

Obama's News Conference July 15 Video

S&P warns of downgrade if a debt deal isn't reached, which could mean more expensive borrowing.
Full video (transcript):

The best part of this presser for me was when Obama said that progressives need to be concerned about debt and deficits too. For some odd reason, progs abdicate that to the conservatives, which makes them less credible. The Washington Post has a good explainer on debts and deficits.
The U.S. government took in about $7,000 in revenue for every man, woman and child in America last year. It spent more than $11,000. The gap between those numbers, about $4,000, is the deficit and it was covered by borrowing money. Some politicians speak as if high levels of government spending and a large budget deficit are the same thing. This isn’t so.
Our debt is accumulated deficits over time and the reality is it will take a looooong time to eliminate debt:
That level of debt has been accumulated over two centuries, rising rapidly in times of war and depression, rising slowly most of the time, and occasionally falling in times of prosperity and fiscal restraint.

But even if Congress and the Obama administration agreed to a budget for next year with zero deficit, the national debt would still be with us. It would take massive budget surpluses year after year to actually eliminate it. No one in public office has offered a plausible plan that would do that. Read the whole thing
There has to be tax increases (revenue) in order to spare the ravaging of Medicare and Social Security. Another oft misunderstood fact: The debts we're talking about are the debts that are already rung up.