Obama proposes spending our way out of recession

       President Obama and teleprompter (AP Photo/Susan Walsh)

In a speech at the Brookings Institution, President Obama said the nation must continue to "spend our way out of this recession.” He then laid out a series of new spending including additional highway projects, tax breaks for small business and tax incentives for clean energy. No price tag was offered.

In almost his next breath he said, “I'm still committed to halving the deficit we inherited by the end of my first term -- cutting it in half.” Which will be a pretty good trick since in less than one year, Obama has already more than doubled the deficit he inherited.

As of the end of the fiscal year, September 30th, the deficit stood in the neighborhood of $1.4 trillion – that's a mighty lofty neighborhood. President Obama would like you to believe that this huge deficit is all George Bush's problem. He said so - “the deficit had reached $1.3 trillion when we walked into the White House” - so it must be true. Except that it isn't.

$787 billion of that is the awesomely successful economic stimulus act which has managed to create new jobs at the meager price of $246,436 apiece, while at the same time the nation's unemployment rate has skyrocketed into double digits. (These are the administrations own figures: 640,329 jobs from spending $157.8 billion.) President Obama signed this monstrosity into law and claims that it is working. He also claims that he inherited the spending. Interesting how he wants to have it both ways.

Already in two months of this fiscal year, the United States government has spent $292 billion more than it took in in tax revenues. To meet Obama's lofty goal, the government will have to run in the black from sometime around the 15th of December to the end of the fiscal year in September. Don't hold your breath.

Of course, the government doesn't have to do that this year, it only has to do that in 2012 to meet Obama's forecast. Don't bet on that either. Certainly not when we are busy “spending our way out of the recession.”

Which will be pretty good trick if it happens, but we all know better. If you are having trouble making ends meet, does it make financial sense to max out your credit cards in order to buy a new car? Of course not. You keep the old one running, and try to cut other spending to ease your budget difficulties.

It's no different for government. This continued spending binge will ultimately harm the economy under a crushing debt load, or devalue the dollar resulting in major inflation, or both. No good can come of continui9ng to spend like drunken sailors – actually government spending makes drunken sailors look fiscally conservative.

You cannot reduce your debt by borrowing more money. You can't do it as an individual and the government can't do it either. Some time soon, this hell bent for leather spending will result in a train wreck.

When it does, you can be certain of one thing: it'll be George Bush's fault.

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