As Obama’s advisors and Obama talking heads like Paul Krugman laugh at the idea that inflation can occur while in a recession, inflation is taking root. This proves two points. Everything Obama is doing right now is wrong and the laws of economics will not change simply because Obama is a gifted speaker.
While the left was busy offering Bush as the straw man for deficit woes, the stock market tumbled today because of increasing oil prices and a poor showing at a Treasury bond sale. Both of these issues are leading to the same looming problem, inflation. This was not unexpected. Neither is the fact that Obama plans to fight inflation with more inflationary spending.
Meanwhile, the Bush straw man argument does not hold much water. The reason the US government can carry any deficit has to do with foreign confidence in US currency. That confidence in the currency often translates into how the world views our nation’s ability to ensure a strong economy. The truth is that although Bush spent (and I’m not saying I agree that he should), the rest of the world had faith in Bush and that he would not push the economy into insolvency. Obama on the other hand came out of the gate like a teenager with their first credit card. He quickly quadrupled Bush’s deficit and made several half hearted attempts at being fiscally responsible. He is still doing it and has lost his credibility. Yet, I seem to recall the Republicans kicking and screaming for Obama to address the deficits for the last 5 months. By not addressing how he would realistically control the deficits caused by himself and Bush, Obama is solely responsible for what economic woes await us.
In the end, it doesn’t matter who outspent who. What matters is which President’s arrogance led to the lack of credibility. The answer is Obama. If you think it was Bush, tell me who is still pushing their spending agenda, Bush or Obama?