Another $3.6 TRILLION is not the answer

Just got off a blogger conference call run by the House minority GOP leadership, this time focusing on the $3.6 TRILLION budget proposed by the Obama administration. Republicans are preparing an alternative budget even though without Democrat support they just don't have the votes. Yet the president had this to say today:

President Barack Obama said he won’t scale back his plans to revamp the health-care and education systems in his proposed $3.6 trillion budget and challenged Republican critics to do more than “just say no.”

Obama, gearing up for a fight in Congress over his fiscal 2010 spending blueprint, met privately with the chairmen of the House and Senate budget committees before issuing a public rebuttal to Republicans who have criticized his plan as including too much spending at a time when deficits are ballooning.

“‘Just say no’ is the right advice to give your teenagers about drugs. It is not an acceptable response” to economic policies “proposed by the other party,” Obama said at the White House with Senate Budget Committee Chairman Kent Conrad of North Dakota and House Budget Committee Chairman John Spratt of South Carolina at his side.

“The American people sent us here to get things done and at this moment of enormous challenge, they are watching and waiting for us to lead,” he said.

Republicans and some Democrats have questioned whether Obama’s budget is too ambitious at a time when the budget deficit is projected to hit $1.75 trillion this year and the U.S. is in the midst of deepest recession in decades.

Funny he was flanked by Sen. Kent Conrad, who last year said the Bush administration deficit deserved a medal for fiscal irresponsiblity--the Obama administration's projected deficit is more than three times that at $1. 75 TRILLION. This is with rosy assumptions (Tinkerbell Economics). And yes, Americans want leadership, but as the president said in his inaugural address, Americans want a government that works.

Is this budget a workable solution to the problems we face in the middle of a recession? Is it a good idea to raise taxes--the largest tax increase in American history-- making it that much harder for families and small businesses to make ends meet? Raise spending yet again, after just passing the TRILLION $$ porkulus bill and a $410 BILLION omnibus spending bill stuffed with porky earmarks? And effectively raise taxes on every working American through the expense of cap and trade?

Are we really considering burdening our children with such a crushing debt? Illinois Rep. Mark Kirk (R-10th) was on the call and told us he paid a visit to the Bureau of the Public Debt--you know, the place where they actually auction off our debt to the world 3 or 4 times a week. He's the first Congressman who's visited, at least in memory apparently. What he had to say was pretty sobering. While he was there they auctioned off $34 BILLION in 15 minutes. Piece of cake you think?

Congressman Kirk asked a few questions. There used to be 45 buyers of U.S. Treasuries, now there are 16. Our principal buyers are foreign, the biggest--the Bank of China. Many of us are aware of this, especially after China warned these last few days that our spending was on a perilous path. IBD:

Communist China's premier has joined the ranks of those scolding Washington for its spending binge. Does Wen Jiabao now understand a market economy better than U.S. policymakers?

"To be honest, I'm a little bit worried," the chairman of the State Council of the People's Republic of China told a press conference after Friday's close of his country's annual legislative session. With China holding a trillion dollars in U.S. government debt, what Wen is worried about is Uncle Sam's massive spending spree devaluing the U.S. dollar and threatening "the safety of our assets."

Should we be worried? Well, let's see, what else to think about. As of now, even without this new proposed borrowing burden we need to borrow $150 BILLION a week to service our existing debt. Three or four times a week the auction window is open a half an hour. Most bids come in in the last 90 seconds, kind of a cliffhanger you might say. When the Bureau has enough bids to cover what they need to borrow, they say cover. In January Germany had an auction that failed to cover their borrowing needs. It happened again in February. Again, unheard of in recent memory.

What would happen in the U.S.? If there are not buyers to cover, the Bureau of the Public Debt is required to report to the market within 90 seconds. Congressman Kirk asked if they had a hotline to the White House. The answer was no. Maybe our President Barack Obama needs this number on his blackberry list.

The backup plan is the Federal Reserve could buy the debt. This is not a good answer.

Apparently last year China bought $450 BILLION in our debt. This year they may only buy $150 BILLION.

Engaging in this risky strategy is not the kind of leadership we need. Go back to the drawing board on the budget, Mr. President. Another $3.6 TRILLION is not the right answer.

P.S. Sit down at the table, Mr. President. That's what we have to do in our daily lives to make things work. For the sake of your girls, Mr. President, sit down at the table.