A lose-lose proposition for Obama

July 8, 2009

My sometimes CNBC debating partner Noam Scheiber wonders at what point people totally start freaking out over the unemployment rate,  so much so that they don’t care about the deficit:

If you’re Obama, I guess the problem is that you want to prevent us from getting to that point. But, if you’re successful, then those pesky deficit concerns stick around. It’s not very comforting to know that you suddenly won’t have to worry about the deficit (politically) when unemployment is persistently in double-digits.

My spin: Actually, it’s much worse for that.  High unemployment will heighten the feeling that the all that red ink was completely wasted by the Obamacrats.

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Agree with your spin. Plus Noam Scheiber is generalizing that deficit spending by the gov. creates jobs, so you have to suffer one to improve the other. Completely false premise.

Deficit spending by the Fed’s for job creation is an exercise in ineffiency. It’s like going to a well to fill a bucket with water to take across a field to the seeds & thirsty, little green shoots. The hitch is that the “bucket” is Congress & it’s riddled with holes, & so the bulk of the water slips away to things that don’t count or help. Hey – it’s only water, could go back and fill the bucket again or just start borrowing from your neighbor.

Noam narrows ithe political problem to either/or — unemployment/deficits. Of more serious concern would be a coupling of food price inflation (it’s an El Nino year — droughts, anticipation of grain price increases) and unemployment. Or unemployment and a geopolitical event or some hacker messing with the electrical grid. Those would definately move those pesky deficit worries further down the list.

State Dept. Website Still Under Attack
http://www.bloomberg.com/apps/news?pid=2 0601087&sid=a.IwUiOEywSo

Posted by Siobhan Sack | Report as abusive