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dallasnews.com
The Dallas Morning News

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Editorial: Obama's economic credibility problem

05:15 PM CST on Thursday, December 10, 2009


In proposing to spend billions of dollars to create jobs while also insisting that he's committed to slicing the federal deficit, President Barack Obama has created a credibility problem on both fronts.

Unlike the near perfect pitch of his address in Norway yesterday, Obama seems tone deaf when it comes to the innate inability to achieve both economic goals – create jobs and reduce the deficit – at the same time. And right now, the nation's deficit challenges outweigh the need for additional stimulus.

We're not cold-hearted to the plight of millions of unemployed Americans and failing businesses, but there is only so much the government should spend to help the United States' economy grow. The government has already "stimulated" and "rescued" to the tune of trillions – some of it appropriate in our eyes.

Now those loans are being paid back faster than expected, unemployment has slowed and some parts of the housing market are stabilizing. No one knows when or how strongly the economy will rebound, or when the unemployment rate, now at 10 percent, will fall enough to persuade businesses to hire and consumers to spend. But we may be at the brink of a slow momentum shift.

An additional stimulus package at this time would further wed future generations to steep stacks of IOUs, an increasingly dangerous initiative.

Yet, in a speech Tuesday, the president outlined incentives for small businesses to hire more workers, urged additional federal spending on roads and other construction projects, and proposed rebates for homeowners to invest in energy-saving weatherization repairs. The president didn't put a price tag on these initiatives; he suggested the cost could be partially offset by some of the $200 billion left over from the bank rescue package.

It is indeed good news that some of the bailed-out banks are repaying the government faster and at higher rates than projected, putting taxpayers ahead of the game at this stage.

But other massive unpaid bills mount. The budget deficit exceeds $1.4 trillion. The national debt is at a whopping $12 trillion. Congressis poised to pass a package of costly health insurance reforms and to raise the debt ceiling another $1.8 trillion.

It's important to remember that a heavily indebted United States simply can't compete in a global economy by borrowing and spending its way out of this recession. Most of the emergency actions taken by the Bushand Obama administrations slowed the bleeding and bought time for the economy's vital signs to stabilize.

Now the administration should put its muscle behind efforts to create a bipartisan commission forcing lawmakers to make difficult reductions in federal entitlement programs.

Job creation depends on businesses finding their bearings and confidence. That won't occur until our leaders stop pretending that that they can pound a square peg into a round hole.

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-- Edited by Sanders on Saturday 26th of December 2009 05:42:14 PM