Excerpts from Obama

(HT to Karl Denninger from The Market Ticker)

SANTELLI: Mr. President. If I were to ask an investor would he invest in a company that for every dollar it spent it had to borrow 42 cents, I think that investor would think long and hard. Now if you look at the amount of money the government takes in and the amount of spending, those are pretty much the numbers for our government right now.

Does it bother you that 42 percent of our spending is borrowed even understanding that we have to deficit spend under tough times. How long can the U.S. continue to spend in that fashion without potentially hurting our long time financial health.

OBAMA: Well, it bothers me a lot. It bothered me when I was running for office and it bothered me when I arrived and I had a $1.3 trillion deficit wrapped in a bow and waiting for me in the Oval Office (editorial: note the blame falling to Republicans)

So, the answer to Rick's question is we've got to do something about it. And we have to do something about it fairly rapidly. The first thing you do is not dig it deeper (and that is why we passed a Health Care Bill to bring us further in debt). That's why this tax debate is important. We can't give $700 billion away (as if was your money to start with) to some of America's wealthiest people. We've got to make sure we're responsible for our budget, that's point #1....

The one thing I have to say to the public is that about 60 percent of our budget is entitlements, Social Security, Medicare and Medicaid. And a lot of the discretion I have is somewhat limited on these programs. (i.e. the President will not make changes to these programs as he has no control nor desire to make those tougher changes).

Now part of the reason health-care reform was so important is because the biggest driver of our long term budget deficits is Medicare. If our economy is growing at 2 or 3 or 4 percent, but health care costs are going up 6, or 7 or 8 percent, than the budget will blow up no matter how many cuts I make in other programs. (despite the fact that we are causing enormous pressure for a sustained economic recovery to take place)

---It seems very odd to me that as a nation, we are buying into the very problem that the housing market created over the last 20 years. The problem now is entitlements and no one wants to do anything about it until its too late, which is a way for elected officials then to blame previous administrations about who caused the problem rather than working diligently to fix it before it becomes one. This author is not very happy with the leaders of this country (for sure from an economic standpoint)...

Grace & Peace

PLW