With very little notice, the U.S. passed a major milestone in June. For the first time in history, foreign entities owned more than $6 trillion of America’s $17.7 trillion national debt. The largest share is, of course, held by China, with friends like Ireland and foes like Putin’s Russia holding smaller amounts.
Why does this matter? Well, “the more we depend on foreign nations to lend us money,” one U.S. Senator said in 2006 as he voted against raising the debt ceiling, “the more our economic security is tied to the whims of foreign leaders whose interests might not be aligned with ours. Increasing America’s debt weakens us domestically and internationally.”
That senator is now the President of the United States, and today he’s giving a speech about how America’s economic greatness fuels America’s leadership around the world. President Obama is right about that, but he’s also correct that his reckless spending and refusal to fix our debt problem has weakened America’s standing and made us less secure. Three years ago, the chairman of the Joint Chiefs of Staff at the time, Navy Admiral Mike Mullen, said, “I believe the single, biggest threat to our national security is our debt[.]” Today, the national debt is $3.1 trillion higher than it was then – and the world certainly isn’t getting any safer. “I don’t remember a time when there have been so many national-security issues on the front burner as there are today,” former Deputy Director of the CIA Michael Morell said in August 2013 when he warned about growing al Qaeda extremism in Syria.
The fiscal year ended just a couple days ago, and this year’s budget shortfall is expected to be more than $500 billion, an amount greater than any of President George W. Bush’s deficits. It’s amazing that President Obama actually brags about cutting the deficit, especially considering the fact that he has fiercely opposed nearly every Republican attempt to address the drivers of the government’s exploding debt: autopilot spending on “entitlements.” Again and again, the president has denounced Republican efforts to strengthen important programs like Medicare to help them avoid bankruptcy.
The truth is, this president has chosen to leave these issues for future generations to deal with, refusing to discuss even basic changes to entitlement programs unless Republicans agree to massive, job-destroying tax increases on families and small businesses.
It’s one thing to give a speech about the debt; it’s another to actually lead at crunch time when key decisions have to be made. And on those occasions during his presidency, President Obama has consistently fumbled the ball. Coupled with the failed “stimulus” spending binge that marked his first years in office, his confrontational, market-rattling rhetoric and demonization of even the most straightforward proposals for spending reform have plunged the nation far deeper into debt and left America at constant risk of downgrades to its credit rating. In fact, his administration’s fundamental public position for years has been that spending reforms actually threaten the economy and that the mere discussion of them puts America at risk. When Republicans have pressed for spending reforms to go along with his requested increases in the nation’s debt limit, President Obama has likened them to terrorists, accusing them of “holding the economy hostage,” “holding a gun to [his] head” and threatening to drop a “nuclear bomb” on the U.S. economy. (This is the same president who originally dismissed the threat to our nation from actual terrorists – the ones American military personnel are currently risking their lives fighting in the Middle East – as “jayvee.”)
With virtually no experience in the private sector and a barely-concealed disdain for small business entrepreneurial capitalism (“You didn’t build that!”), President Obama believes economic growth and job creation is generated by increases in government taxation and spending, not by the hard work of the American people. It’s little wonder job creation during his presidency has fallen woefully short of the levels his administration promised when he took office and left Americans asking: where are the jobs?
In contrast to this president’s dismal record, Republicans have worked tirelessly to trim spending, support private-sector job creation, and enact common-sense reforms, passing balanced budgets that have been blocked by President Obama and Senate Democrats. And while more progress is absolutely essential, Republicans did successfully work to cut $2.1 trillion in government spending over 10 years. Solving our spending and debt problem remains a top priority for Speaker Boehner. In fact, it’s one of his five points for resetting America’s economic foundation. “For what lies ahead, the world needs a strong America, and that means we need a strong economy,” he says.
If President Obama agrees, he should work with Republicans to rein in out-of-control spending, encourage entrepreneurship and small business job creation (instead of trying to tax it and punish it), and reduce the debt. Otherwise, his big speech in Chicago is just more empty bluster.