Advancing a Free Society

Is the President in Recovery?

Friday, July 29, 2011

President Obama does not care much about deficits -- other than worrying that big debt might matter in his re-election campaign.

In his first three budgets, Obama borrowed nearly $5 trillion. Currently, the government is borrowing about 45 percent of everything that it spends. Obama's projected 10-year plan would add nearly $10 trillion to existing U.S. debt. This spring he proposed the largest annual deficit in U.S. peacetime history, which is why his $3.7 trillion budget for 2012 was rejected in the Senate by a 97-0 vote.

In other words, under Obama, the government during the last three years has borrowed on average about $4 billion each day. That staggering sum is far in excess of the $1.6 billion per day during the eight-year tenure of George W. Bush, who until Obama's presidency had borrowed more than any peacetime president.

Apparently in Obama's worldview there are advantages to deficits that explain his fondness for unprecedented borrowing. In Keynesian terms, massive government red ink is supposed to foster economic prosperity by creating goods and services that a purportedly less efficient private sector cannot.

The administration certainly has added an additional 100,000 federal jobs and expanded food stamps to nearly 50 million recipients -- and in the process enlarged the pool of potentially grateful constituents. This belief in the superior wisdom of the state explains why almost all the Cabinet secretaries in the Obama administration came out of state or federal government, not from private enterprise.

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