Obama warns on deficit

This is pretty incredible. A very unpopular Wall Street Bail out, a defocused and ineffective Stimulus and now warns on the deficit.

US President Barack Obama warned that the US economy could head into a “double-dip recession” unless urgent steps were taken to rein in mounting public debt.

The US president’s remarks – in an interview with Fox News in Beijing on Wednesday, towards the end of his eight-day tour of Asia – marked his strongest language yet on the necessity of putting public finances back on a sound footing.

“It is important though to recognise if we keep on adding to the debt, even in the midst of this recovery, that at some point, people could lose confidence in the US economy in a double-dip recession,” said Mr Obama.

Frankly first, they made it and second the focus has been dead wrong. We need jobs and we need jobs right now. If they want to tackle the deficit, they need to remember employed people pay taxes. A full economy pays taxes.

Obama has it wrong, the real threat to a double-dip recession is the unemployment rate and until they focus on jobs, jobs, jobs, even if that means more government spending odds are we will have a double dip.

Now Obama is talking about tax cuts (where have we heard this before) or tax incentives for small businesses to hire.

That's it? What about bringing back jobs from Federal and State contracts that have been offshore outsourced? What about a direct jobs program? How about some serious infrastructure projects? What about reforming trade?

I hope this was just placating the Fox News audience.

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He is not placating Faux News audience

This is what his economic advisers are probably telling him particularly Larry Summers.

If we get a second "jobs bill" it will laden with all kinds of "tax incentives" including a payroll tax credit.

But the thing I don't get and maybe someone can explain it to me:

If there is NO demand for a business' product how is that business will be able to hire anyone even with a payroll tax credit? There is a huge issue of cash flow (remember that). If there is no cash coming through the door in terms of sales then there definitely no cash to go out the door in terms of to pay workers.

Am I missing something?

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not you're not

and that's a huge reason to Stimulate an economy, to create demand.

Did you see Rep DeFazio call for the firing of Larry Summers and Tim Geithner?

It's pretty obvious to me, but I wrote about this in the first Stimulus, that they needed to target jobs by directly creating jobs.

Tax cuts obviously do not work. It's pretty nuts, when people do not have any money, a tax cut on zero means nothing.

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Yes. I saw Rep. DeFazio and I strongly concur

Geithner and Summers are certainly not CHANGE. There are from the same school of thought that got us into this mess.

What it comes down to is fear of pissing off the financial oligarchy? WH administrations believe in placating the financial oligarchy.

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Populist caucus

I wrote it up when they formed it...but it's possible they might get some bipartisan participation, which would be very nice to see (without some dribble compromise in common sense and sane policy).

So, let's see if they can build up a real voice and power..

lord knows we need it. Defazio, Kaptur need more Reps to come clean and join forces with them to get some real power.

While it's fantastic they speak out, the problem is Congressional leadership is clearly in the corporate agenda camp on a large range of issues...(those being anything with $$ in it). ;)

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Another thing: don't give us this bullsh*t

about reducing deficit until we pull troops out of Afghanistan AND drop this idea of extending TARP.

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