Obama Says U.S. Long-Term Debt Load ‘Unsustainable’

[True_Texan]

NO SHIT Sherlock....  


http://www.bloomberg.com/apps/news?pid=20601087&sid=aJsSb4qtILhg&refer=worldwide

By Roger Runningen and Hans Nichols

May 14 (Bloomberg) -- President Barack Obama, calling current deficit spending “unsustainable,” warned of skyrocketing interest rates for consumers if the U.S. continues to finance government by borrowing from other countries.

“We can’t keep on just borrowing from China,” Obama said at a town-hall meeting in Rio Rancho, New Mexico, outside Albuquerque. “We have to pay interest on that debt, and that means we are mortgaging our children’s future with more and more debt.”

Holders of U.S. debt will eventually “get tired” of buying it, causing interest rates on everything from auto loans to home mortgages to increase, Obama said. “It will have a dampening effect on our economy.”

Earlier this week, the Obama administration revised its own budget estimates and raised the projected deficit for this year to a record $1.84 trillion, up 5 percent from the February estimate. The revision for the 2010 fiscal year estimated the deficit at $1.26 trillion, up 7.4 percent from the February figure. The White House Office of Management and Budget also projected next year’s budget will end up at $3.59 trillion, compared with the $3.55 trillion it estimated previously.

Two weeks ago, the president proposed $17 billion in budget cuts, with plans to eliminate or reduce 121 federal programs. Republicans ridiculed the amount, saying that it represented one-half of 1 percent of the entire budget. They noted that Obama is seeking an $81 billion increase in other spending.

Entitlement Programs

In his New Mexico appearance, the president pledged to work with Congress to shore up entitlement programs such as Social Security and Medicare. He also said he was confident that the House and Senate would pass health-care overhaul bills by August.

“Most of what is driving us into debt is health care, so we have to drive down costs,” he said.

Obama prodded Congress to pass restrictions on credit-card issuers, saying consumers need “strong and reliable” protection from unfair practices and hidden fees.

“It’s time for reform that’s built on transparency, accountability, and mutual responsibility, values fundamental to the new foundation we seek to build for our economy,” the president said.

Obama called on Congress to send to him by May 25 a bill that would clamp down on what he says are sudden rate increases, unfair penalties and hidden fees. He also wants the measure to strengthen monitoring of credit-card companies.

House Bill

The U.S. House of Representatives passed the credit-card bill last month after adding a provision requiring banks to apply consumers’ payments to balances with the highest interest rates first. The bill also imposes limits on card interest rates and fees.

The Senate continued debating its version of the bill today. It would require credit-card companies to give 45 days’ notice before increasing an interest rate. It would prohibit retroactive rate increases on existing balances unless a consumer was 60 days late with a payment.

The president said Americans have been hooked on their credit cards and share some blame for the current system. “We have been complicit in these problems,” he said. “We have to change how we operate. These practices have only grown worse in the midst of this recession.”

The American Bankers Association, which represents card issuers, has warned lawmakers and the Obama administration against taking punitive action or setting requirements that are too stringent. Doing so, the lobby group says, would limit consumer credit and worsen a credit crunch.

Obama said that restrictions “shouldn’t diminish consumers’ access to credit.”

Uncollectible Debt

Uncollectible credit-card debt rose to 8.82 percent in February, the most in the 20 years that Moody’s Investors Service Inc. has kept records. Lawmakers have said they’re under increasing pressure from constituents to respond to rising interest rates and abrupt changes to consumers’ accounts.

Obama held a White House meeting last month with executives from the credit-card industry, including representatives from Bank of America Corp. and American Express Co. Afterward, he told reporters that credit-card issuers should be prohibited from imposing “unfair” rate increases on consumers and should offer the public credit terms that are easier to understand.

“The days of any time, any increase, anything goes -- rate hike, late fees -- that must end,” Obama said today at Rio Rancho High School. We’re going to require clarity and transparency from now on.”

He also said the steps he has taken to stimulate the economy and start the debate on overhauling the health-care system are beginning to take effect.

‘Beginning to Turn’

“We’ve got a long way to go before we put this recession behind us,” Obama said. “But we do know that the gears of our economy, our economic engine, are slowly beginning to turn.”

Taking questions from the audience, Obama repeated his stance that he wants legislation to overhaul the health-care system finished before the end of the year, saying it is vital to the economy.

Health-care costs are driving up the nation’s debt and burdening entitlement programs such as Medicare, the government- run insurance program for those 65 and older and the disabled.

The programs’ trustees reported May 13 that the Social Security trust fund will run out of assets in 2037, four years sooner than forecast, and Medicare’s hospital fund will run dry by 2017, two years earlier than predicted a year ago.

[Rastus]

Which is why I'm keeping my fixed rate mortgage.  The only reason our inflation isn't through the roof now is because Europe's economy is even worse than ours.  What a revelation about China...gee, you think.... we had a debt tender recently and the Chinese did not show up.....horrors.  Think about it...the commies are propping up our economy....we are the largest debtor nation on earth.  The emperor has no clothes........

OK...now do you know what comes next...........TAX INCREASE .

Here's the deal...printing dollars is all about the government being able to spend what it wants.  Printing dollars in excess....or any fiat currency results in inflation....all the hard-working people who saved their money now can't buy what they used to be able to because their money is not worth so much.  This is pretty plain...so now the more liberal posters here...can you understand now how a government that does not enforce fiscal restraint is actually taxing people on the money they've already been taxed on?  Is it more clear to you now....they aren't idiots in Washington...they may be selfish and greedy, but they aren't dumb.  They know that inflation supports their spending through an invisible tax called inflation.  Spending money, your money, is how they buy their power.

Now, what do government's do who are hooked on spending...they borrow.  For the double whammy, to be "responsible" and all, to impress their lendors so the "free money" keeps coming in...they raise taxes and borrow more. 

Print more money and support spending with inflation; tax more to get more money and to borrow more.

I think the above is a pretty clear explanation of how hard working people get screwed.  But hey, it's like I heard somewhere, for this administration it's pretty much lining up as "From each according to his ability, to each according to his need."

[PegLeg45]

NO SHIT Sherlock....  


http://www.bloomberg.com/apps/news?pid=20601087&sid=aJsSb4qtILhg&refer=worldwide

Friend, you took the words right outta my mouth.     

[mudman]

Bo Ho is unsustainable.

[tt11758]

Stupid sumbitch shoulda thought of that BEFORE signing the porkulous package.

I can FEEL my blood pressure rising here.

[Sponsor]

[ericire12]

Tax increase was the plan all along.... they know the masses really wont start grumbling until they cross that magical 51% mark.

[philw]

Bo Ho is unsustainable.

comment of the week  haha

[tt11758]

Tax increase was the plan all along.... they know the masses really wont start grumbling until they cross that magical 51% mark.

Maybe the masses won't, but the MASSIVE (I'm a large feller) are sure as hell grumbling already!!

[Pathfinder]

OK...now do you know what comes next...........TAX INCREASE .

Exactly my thought when I first read the article. Had to get to work, didn't have time to post, so thanks Rastus for saying what some of us thought.

[True_Texan]

Maybe the masses won't, but the MASSIVES (I'm a large feller) are sure as hell grumbling already!!

Right there with you.

It is truly mind boggling how stupid people can be. Common sense ain't all that common.