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Obama Considers a Spending Freeze

It appears President Obama may be realizing that his deficit is becoming a huge problem. In light of many economists warning of the pending inflation risk and foreign creditors becoming nervous of buying U.S. debt, President Obama is eying a domestic spending freeze. According to the AP,

The Obama administration has alerted domestic agencies to plan for a freeze or even a 5 percent cut in their budgets, part of an election-year push to rein in record deficits that threaten the economy and Democrats’ political prospects next fall.

The deficit-cutting drive comes as President Barack Obama traveled to Asia where several nations, especially China, have expressed concerns about the size of U.S. deficits. China is the largest foreign holder of U.S. Treasury securities and policymakers worry that alarm over deficits could push foreigners into cutting back on their purchases of Treasury debt.

I seem to remember John McCain proposing a spending freeze during the campaign.  I also remember Obama criticizing such a plan.  From the J Post,

At the first presidential debate, Republican John McCain proposed a spending freeze on all federal government programs but defense, veterans affairs and entitlements such as social security pension payments and medicare insurance for the elderly.

Democrat Barack Obama said such a move would be using a hatchet on an ailing patient, the stumbling American economy, when the surgeon needed to be using a scalpel.

Maybe the elections in Virginia and New Jersey have made Obama realize that he is not invincible?  He may lose his majorities in Congress because many independent voters are becoming scared of the record deficit he is racking up.  Is this is purely a political move to try and win back some voters?  Is Obama is starting to understand that printing obscene amounts of money is not a good policy for our long term economic health? Maybe he just wants to keep China happy so they continue to finance his expansion of the federal government?  All of the above?

Related posts:

1. Obama is Cutting the Deficit by Spending More
2. Another Day, Another Promise Broken
3. Obama’s Method of Job Creation
4. Kids taught to Praise Obama in School! Warning, May Cause Vomiting

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