Obama Used ‘Invest’ or ‘Investment’ 18 Times in Press Conference to Describe Government Deficit Spending
March 24, 2009 - 11:35 PMIn his prime-time Tuesday press conference, President Barack Obama used the words "invest" or "investment" 18 different times to describe the deficit spending he wants the federal government to undertake in pursuit of his budget plan.
The idea is that investing money is something private individuals and businesses do on the calculation that they will get back more money than they put into a particular enterprise.
In his prime-time Tuesday press conference, however, President Barack Obama used the words “invest” or “investment” 18 different times to describe the deficit spending he wants the federal government to undertake in pursuit of his budget plan.
When the government engages in deficit spending it has to borrow money—part of it from foreign sources—and then charge future taxpayers to pay the interest on the borrowed money. As long as the government’s loans are not paid off, the taxpayers must continue paying interest on the debt year after year—just as an individual citizen would need to pay interest year after year on a credit card whose principal is never paid down.
The money that goes each year to pay the growing interest on the federal government’s credit card cannot be “invested” by private citizens and businesses to create jobs and grow the economy.
At different points in the press conference, Obama used forms of the words “invest” or “investment” to describe government spending on education, “renewable sources of energy,” health care reform, “health information technologies,” “American’s capacity for ingenuity and innovation,” science, technology and infrastructure. He referred to some of these items repeatedly as targets of the sort of government “investment” he wants to make.
Last Friday, the Congressional Budget Office (CBO) released an analysis of Obama’s budget proposal, concluding that it would result in an increase in the national debt that is unprecedented in the post-World War II era.
“CBO has also analyzed the policy proposals outlined in the President’s preliminary budget request,” said CBO’s report. “Under those policies, the deficit would total $1.8 trillion (13.1 percent of GDP) in 2009 and $1.4 trillion (9.6 percent of GDP) in 2010. The cumulative deficit over the 2010–2019 projection period would equal $9.3 trillion and would average 5.3 percent of GDP. Debt held by the public would rise from 57 percent of GDP in 2009 to 82 percent of GDP in 2019.”
The CBO analysis of Obama’s budget does not foresee any year in the next decade in which the government would run an actual surplus and thus be able to pay off a penny of the new debt Obama plans to incur. Each year, the national debt will grow as will the presumably permanent annual interest charges to the taxpayers.
Yet, at one point in his press conference—the fourth instance in which he used a form of the term "invest" to describe his borrow-and-spend budget plan—Obama said: “It’s the budget that leads to broad economic growth by moving from an era of borrow and spend to one where we can save and invest.”
At another point, he argued that if the government did not borrow and spend money on the “investments” he planned to make, then the U.S. economy would not grow and we would still have massive deficits.
“And so what we've said is, let's make the investments that ensure that we meet our growth targets that put us on a pathway to growth as opposed to a situation in which we're not making those investments and we still have trillion-dollar deficits,” he said.
Obama also suggested that if the government did as he planned, it would somehow simultaneously borrow and spend trillions and actually reduce the deficit by “a couple of trillion dollars.”
“And so what we're trying to emphasize is, let's make sure that we're making the investments that we need to grow to meet those growth targets, at the same time we're still reducing the deficit by a couple of trillion dollars,” he said.
This year, according to CBO, Obama will run a $1.845-trillion annual deficit. A decade from now in fiscal 2019, under the Obama plan, according to CBO, the federal government will run a $1.189-trillion annual deficit. At no time in the intervening years, according to CBO, will the annual federal budget deficit ever drop below $658 billion, which is the projected deficit for fiscal 2013.
The largest deficit President Bush ever ran before this year, according to the CBO, was $459 billion in fiscal 2008.
Here are the 18 times Obama used the words “invest” or “investment” to refer to government spending during his March 24 press conference. (The quotes are from the transcript of the press conference that CNN posted on Tuesday night.)
1. We invest in the renewable sources of energy that will lead to new jobs, new businesses and less dependence on foreign oil.
2. We invest in our schools and our teachers, so that our children have the skills they need to compete with any workers in the world.
3. We invest in reform that will bring down the cost of health care for families, businesses and our government.
4. It's with a budget that leads to broad economic growth by moving from an era of borrow and spend to one where we save and invest.
5. We’ve got to make some tough budgetary choices. What we can't do, though, is sacrifice long-term growth, investments that are critical to the future, and that's why my budget focuses on health care, energy, education, the kinds of things that can build a foundation for long-term economic growth, as opposed to the fleeting prosperity that we've seen over the last several years.
6. And what we have to do is invest in those things that will allow the American's capacity for ingenuity and innovation, their ability to take risks, but make sure that those risks are grounded in good products and good services that they believe they can market to the rest of the country, that those models of economic growth are what we're promoting, and that's what I think our budget does.
7. We've got to invest in education, K through 12 and beyond, to upgrade the skills of the American worker so we can compete in--in the international economy.
8. Here's what I do know: If we don't tackle energy, if we don't improve our education system, if we don't drive down the costs of health care, if we're not making serious investments in science and technology and our infrastructure, then we won't grow 2.6 percent, we won't grow 2.2 percent. We won't grow.
9 & 10. And so what we've said is, let's make the investments that ensure that we meet our growth targets that put us on a pathway to growth as opposed to a situation in which we're not making those investments and we still have trillion-dollar deficits.
11. And so what we're trying to emphasize is, let's make sure that we're making the investments that we need to grow to meet those growth targets, at the same time we're still reducing the deficit by a couple of trillion dollars, we are cutting out wasteful spending in areas like Medicare, we're changing procurement practices when it comes to the Pentagon budget, we are looking at social service programs and education programs that don't work and eliminate them.
12. But it is going to be an impossible task for us to balance our budget if we're not taking on rising health care costs, and it's going to be an impossible task to balance our budget or even approximate it if we are not boosting our growth rates. And that's why our budget focuses on the investments we need to make that happen.
13. Look, I'm not going to lie to you. It is tough. As I said, that's why the critics tend to criticize, but they don't offer an alternative budget. Because even if we were not doing health care, we were not doing energy, we were not doing education, they'd still have a whole bunch of problems in those out-years, according to CBO projections. The only difference is that we will not have invested in what's necessary to make this economy grow.
14. And so what we've said is, look, let's invest in health information technologies.
15. Let's invest in preventive care.
16. Let's invest in mechanisms that look at who's doing a better job controlling costs while producing good quality outcomes in various states and let's reimburse on the basis of improved quality, as opposed to simply how many procedures you're doing. Let's do a whole host of things, some of which cost money on the front end, but offer the prospect of reducing costs on the back end.
17. Now, the alternative is to stand pat and to simply say, "We are just going to not invest in health care."
18. And that's why the recovery package said, as a first priority, how are we going to save or create 3.5 million jobs? How can we prevent layoffs for teachers and police officers? How can we make sure that we are investing in the infrastructure for the future that can put people back to work right away?