Deficits do matter

Mr. Obama said today that his recovery plan will take precedence over the deficit--meaning that Mr. Obama intends to spend trillions that the government doesn't have and that he won't give a second thought as to where these trillions will come from. However, Mr. Obama did tell us that he will conduct a "page by page, line by line" review of the budget to make sure that we are not wasting money. He did not tell us how he would distinguish wasteful spending from good spending. We are to trust that he can tell the difference; that's part of the faith-based approach to government first tried by George W. Bush and which has now become the very essence of Mr. Obama's new administration.

Says Mr. Obama:

"As soon as the recovery is well under way, we need to set up a long-term plan to reduce the structural deficit and make sure we are not leaving a mountain of debt for the next generation."

Now for some facts: as of November 25, 2008 at 9:45:57 PM GMT the federal debt is $10,658,119,542,237.24. I'd say that's one big mountain of debt already. And this fiscal year's budget deficit will approach $2 trillion (current business media chatter places it around $1 trillion but simply adding up the actual and proposed bailout plans, the original deficit estimate when the budget was proposed, and the "off budget" spending for our two wars yields a figure of nearly $1.5 trillion and the current fiscal year is only two months old!). The optimistic Mr. Obama thinks he can let the deficit slide because we will have recovery first and that will take care of everything. A spoonful of recovery sugar will make the medicine of the deficit go down.

I want to know who will finance this deficit. Who will loan America $2 trillion and why? Since financing this colossal deficit is absolutely essential to Mr. Obama's spend-until-you-drop recovery plan, why does Mr. Obama think that he has the luxury of time to defer dealing with the deficit, particularly since he soon will lead a government that is technically insolvent? Will Mr. Obama, like Blanche DuBois, depend on the kindness of strangers--in this case the Chinese and the Japanese? Are we really supposed to put our futures and the future of our nation into the hands of Chinese and Japanese central bankers and hope that they'll keep shipping us money across the Pacific? Isn't this what Wall Street and Detroit are begging for--a bailout? Is Mr. Obama's "recovery" plan merely begging the world for an American bailout? Alms, alms for the poor!

Mr. Obama will soon discover the error of his ways when currency markets experience their first run on the dollar early in 2009. The dollar is fatally wounded as a currency precisely because deficits do matter, debt does matter, and high living on perpetually renewed loans is impossible. Mr. Obama is wrecking his administration and he hasn't even taken the oath of office yet!