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Monday, July 11, 2011

Why Obama Has Not Passed a Budget in Over Two Years

We've heard it many times before, mostly from the President himself - he's making history. Unfortunately there are few people that think his political tactics regarding the budget is good history. But as of today, as Michael Graham from the Boston Herald points out, the democratically-controlled congress has not passed a budget in 800 days! Over two years. To put it into context:

..the last time Senate Democrats passed a budget, Ted Kennedy voted for it.

Last year Obama passed no budget. Why? It was an election year. My guess is that he voted present for two reasons: 1. If he voted to cut expenses, he figured his party would get crushed. 2. If he voted to increase expenses, he figured his party would get crushed. Well, at least Obama was right on one thing: his party got crushed.

But here we are one year later and now Obama is playing politics to help himself - this time to get him through the 2012 elections. Most helpful to Obama would be an extension of the debt ceiling so the Fed can continue printing money and so he has a chance at re-election.

It's true that increasing debt might give a short-term jolt to the economy. MIGHT. But might NOT as well. There's just as good a chance that the international community shuns Obama and tells the Fed to take a hike - meaning a hike in interest rates because of the increased risk associated with more debt. And regardless of the short term impact, the long term impact will certainly be a very big negative for years, and I fear, decades to come.

If the Republicans don't hold firm on this one, I fear the worst. Batten down the hatches.