Obama Was Warned By His Economic Team That His Campaign Promises Would Create A Mountain Of Debt

TBI ^ | 1-23-2012 | Michael Brendan Dougherty

[blam]

Obama Was Warned By His Economic Team That His Campaign Promises Would Create A Mountain Of Debt

Michael Brendan Dougherty
Jan. 23, 2012, 8:57 AM

Ryan Lizza reports for the New Yorker that on December 15 2008, a few short weeks before his inauguration, president-elect Obama was presented with a 57-page memo on the depth of the economic crisis drafted by Lawrence Summers and other economic advisors.

The memo informed the president that if he enacted his campaign promises in the current environment, he would shoot a gigantic hole into the nation's budget.

“Since January 2007 the medium-term budget deficit has deteriorated by about $250 billion annually,” the memo said. “If your campaign promises were enacted then, based on accurate scoring, the deficit would rise by another $100 billion annually. The consequence would be the largest run-up in the debt since World War II.”

Lizza's reporting also mentions the huge divide between Peter Orzsag, the budget director who suggested the president scale back his agenda, lest he run up historic deficits, and Christina Romer, the incoming chairman of the Council of Economic Advisers who wanted to suggest stimulus plans as large as the $2 trillion hole in the economy.

But Summers argued against a stimulus that was too large.

He offered the President four illustrative stimulus plans: $550 billion, $665 billion, $810 billion, and $890 billion. Obama was never offered the option of a stimulus package commensurate with the size of the hole in the economy––known by economists as the “output gap”––which was estimated at two trillion dollars during 2009 and 2010. Summers advised the President that a larger stimulus could actually make things worse

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The full 57-page memo will be made public by the New Yorker later today.

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[WOBBLY BOB]

hasn’t Slck Willy made $85 million just doing speeches?

[blam]

If The U.S. Government Keeps Spending Money Like This We Are Doomed And If The U.S. Government Stops Spending Money Like This We Are Doomed

[Texas Eagle]

Exactly. The only difference between President Urkel and a septic full of crap is the septic tank.