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Obama Deficit Speech: Lots of Flowery Talk About a Major Distraction

It was a classic Obama speech – reasonable, and seductive to a degree that one might forget that we're debating how fast we're going to put the brakes on this recovery.

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In tone, the speech was classic Obama – reasonable, informed and seductive to a degree that one might forget that we're debating to what degree we're going to put the brakes on this tenuous, jobless economic recovery. But that is what we're debating. Even the very moderate cuts agreed to last week will cost the economy about 400,000 jobs, according to models developed by Moody's chief economist Mark Zandi. Nobel laureate Joe Stiglitz called the Simpson Bowles recommendations – several of which Obama embraced in his speech – a “suicide pact.” He predicted that it would cost the economy millions of jobs.

“I understand these fears,” Obama said. “I say that if we truly believe in a progressive vision of our society, we have the obligation to prove that we can afford our commitments. If we believe that government can make a difference in people’s lives, we have the obligation to prove that it works – by making government smarter, leaner and more effective.”

The reality is that while our private profit-driven health-care system is unsustainably expensive, the U.S. spends less on the public sector than almost every other developed country. We're running large deficits because we're maintaining costly military operations in several countries and the federal government collected less tax revenue in 2010 than in any year since 1961.

Progressives will no doubt celebrate Obama's deft dissection of the GOP's budget gimmicks and his full-throated defense of the welfare state. But it was ultimately some thin political gruel with unemployment remaining at 9 percent and the foreclosure crisis continuing unabated. When Obama's on, as he was today, it's easy to forget that our biggest national debate is little more than a distraction from the real issues plaguing our economy.

 
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