Obama: Yes We Can Do Deficit Spending
RENO, Nev. — Deficit spending is back.
Obama spoke to Sec. Paulson about the bailout from Colorado yesterday. (Credit: Obama Flickr.)
If you listen to Sen. Barack Obama campaigning today, a government bailout of the U.S. financial system will not require drastic domestic spending cuts. Some of Obama’s ambitious proposals for increased spending on health care and energy may get kicked down the road, Obama said, but deficit spending is also part of economic recovery.
“People have asked whether the size of this [bailout] plan, together with the weakening economy, means that the next President will have to scale back his agenda and some of his proposals,” Obama said at a morning rally at the University of Nevada at Reno. “The answer is both yes and no.”
He conceded that, “With less money flowing into the Treasury, it is likely that some useful programs or policies that I’ve proposed on the campaign trail may need to be delayed. But there are certain investments in our future that we cannot delay precisely because our economy is in turmoil.
“You can always put off giving your house a new paint job or renovating your kitchen, but when your roof is crumbling or your heater goes, you realize that these are long-term investments you need to make right away,” he explained — using of one several folksy analogies to sell the bailout today.
The era of big deficits never ended, stress some observers, so Obama’s reliance on deficit spending would be no different from President Bush’s current approach. Yet Obama is clearly moving to rebut the emerging conventional wisdom — minted by Jim Lehrer’s dogged questioning about cutting spending in Friday’s first presidential debate — that a financial bailout or weakening economy requires scaling back on the domestic spending that Democratic administrations typically advocate.