Spending disguised as investment

January 25, 2011

Over the weekend, President Obama released to his 2008 campaign supporters a preview of tonight’s State of the Union address. In the video, President Obama promises to improve the economy by investing in the American people.

But what does that really mean? Some commentators have panned the White House’s attempt to de-stigmatize new spending (and shift focus away from the nation’s yawning debt) by substituting words associated with economic growth — such as “investment” — for the politically toxic phrase “more spending.”

In Bloomberg, Council on Foreign Relations senior fellow Amity Shlaes says the shift means, “The president will pay lip service to the idea that the era of throwing cash at the economy is over” while insisting on new spending programs. Shlaes says, based on the evidence, these “investments” are unlikely to help the economy and are therefore hard to justify … hence the new terminology. Keith Koffler at WhiteHouseDossier.Com also thinks this clever rhetorical shift means President Obama will ultimately focus on new spending over deficit reduction.

With the national debt now topping $14 trillion, let’s hope Koffler and Shlaes are wrong. Instead President Obama should follow the advice of fellow Democrat and House Budget Committee Ranking Member Chris Van Hollen (MD) and make “a serious commitment to deficit and debt reduction.”

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