You can attack the author all you wish, but the fact and conclusions are true (and in fact are what I/We have been saying all along).
Happy trails "O"
What's Keeping Obama Up?By Dick Morris
The Rasmussen poll conducted over the weekend of May 30-31 asked a key question designed to give us perspective on Obama's current popularity. The question was whether the current problems "are due to the recession that began under the Bush administration or to the policies Obama has put in place since taking office." In other words, who's to blame, Bush or Obama?
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By 62-27, voters say Bush is still the culprit.
As long as this opinion remains prevalent, Obama will continue to enjoy high popularity. But when it changes, as it inevitably must, we will see him begin a long, long fall.
And this is the key measurement to watch.
The real recession - dating from the stock market collapse - began four months before Bush left office. And it is now four months since Obama was inaugurated. From this vantage, it still looks to voters like Bush's recession.
But it will become increasingly obvious that the large deficit Obama has incurred while pursuing his cure for the recession is, on its own, causing more problems than it solves. As high interest rates and, most likely, inflation, begin to set in - with no relief in unemployment - it will be obvious that Obamanomics isn't working and is, in fact, aggravating the economic trouble.
Obama, recognizing the danger, has recently begun to speak out - without even cracking a guilty smile - against the huge budget deficit he created. He is trying to blame the deficit, too, on Bush. But voters will not overlook the huge spending sprees of January and February, when Obama quadrupled the 2009 deficit. They will come to see that spending as a huge mistake and will shift their blame to the new president who proposed it.
Obama now faces a choice of poisons.
He can leave taxes as they are and take the poison of high interest rates, rapid inflation and a new recession, all caused by the massive borrowing he has forced on the Treasury. If the Treasury cannot sell enough bonds at a reasonable interest rate, it will, of course "monetize the deficit" - economics-speak for printing money so that there will be enough to buy the Treasury debt at moderate interest rates. But the process of so vastly expanding the money supply (or even just leaving the current expansion in place without trying to soak up the extra money) will cause its own runaway inflation.
Or Obama can break his pledge and raise taxes on everybody. His soak-the-rich approach will not be enough to cover the deficit. Especially when one factors in his healthcare proposals, big tax increases on the middle class become an increasing likelihood. And when we consider his cap-and-trade legislation, huge increases in utility rates also loom.
Either poison will make it clear that the economy is suffering from the medicine Obama administered, rather than the original disease that started under Bush.
And, of course, while we cannot predict precisely the start date of the Obama-generated misery, it's pretty clear that it will be a long-lasting pain. Neither inflation nor the pain of higher taxes is going to go away soon. And either approach will probably kindle a new recession.
Some economists think we will have an L-shaped recession from which we do not emerge for years and years. Others think it will be a W-shaped recession (not Bush's W) in which we emerge briefly and then go back down again. But a U-shaped recession, in which we go down and then come bouncing back, probably cannot happen with Obama's deficits now firmly in place. Then it will become clear that the cure was worse than the disease.
From the WSJ
Unless we demonstrate a strong commitment to fiscal sustainability in the longer run, we will have neither financial stability nor healthy economic growth," Mr. Bernanke said in prepared testimony to the House Budget Committee. (Read the full remarks.)
The White House estimates that the budget deficit will reach around $1.8 trillion this year and fall to about $900 billion by 2011. That, Mr. Bernanke said, will push the debt-to-GDP ratio from 40% before the financial crisis began to 70% by 2011, which would be the highest since after World War II.
"Certainly, our economy and financial markets face extraordinary near-term challenges, and strong and timely actions to respond to those challenges are necessary and appropriate," Mr. Bernanke told the House panel.
However, the retirement of the Baby Boom generation will place even more of a burden on entitlement programs like Social Security and Medicare, and "we will not be able to continue borrowing indefinitely to meet those demands," he said.
Mr. Bernanke suggested that fiscal concerns may already be having an effect in the markets. Yields on longer-term Treasury securities and fixed-rate mortgages have risen, he noted.
"These increases appear to reflect concerns about large federal deficits but also other causes, including greater optimism about the economic outlook, a reversal of flight-to-quality flows, and technical factors related to the hedging of mortgage holdings," he said.
Bush is still the culprit. Duh. He was handed a surplus and a nascent recession. He then threw out pay/go, cut taxes and doubled the national debt with nothing to show for it. He then handed Obama the greatest financial crisis and economic downturn since the Great Depression.
What should we have expected? If one runs massive deficits in times of growth, such as Bush, what happens when you hit a massive recession? You get huge deficits. Duh. Then, when you and your fellow travelers are tossed out of office like yesterday's fish, you can sit on the sidelines and complain about all the red ink.
So goes the days of our lives...
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