Daily Austerity Watch: What Obama Should Say At Facebook

Here at Daily Austerity Watch, we are going to take the bold step of offering President Barack Obama advice on how to convince people who spend every scrap of their spare time on Facebook on the need to reduce the deficit.  To make matters worse, Obama is making his speech at the headquarters of the social network, the first head of state to do so.

Most Americans have a vague idea that the country is in a debt crisis.  Two-thirds of them told Gallup that they were concerned about the issue.    Unfortunately,  people don’t think much about the ideas being proposed to tackle the problem except the Obama plan to raise taxes on the rich which Republicans consider to be a non-starter.

Obama has the unenviable though not impossible task of trying to persuade people worried about their own futures to think about where the country will be in the years and decades to come.   Young people are graduating college with an undergraduate degree with debt loads of more than $20,000, according to most estimates.  The figure for those with advanced degrees usually hits six figures.  Earning a high enough salary to repay their debt is difficult, which explains why many  members of the current generation have to live at home with their parents.

Many older people are still struggling to pay their bills even though unemployment is improving and the housing market is starting to rebound.  Trillions of dollars of corporate cash remains on the sidelines as businesses find it more profitable to buy other companies rather than hire workers.  Though the stock market has rebounded, the retirement savings of many Americans is in a state of disarray.

For Obama to reach this audience and the more than 500 million active users the website claims, he should make the following arguments:

1. The debt crisis is real.  Unlike global warming, n0 one disputes this notion though some quibble over how quickly we must act to resolve it.
2. America can’t continue to spend money that it doesn’t have.   It’s not really fair to the American people nor to our children and grandchildren.
3. My plan to cut the deficit offers the fairest approach and will generate $4 trillion in savings over 12 years,  about a  $1 trillion which comes from doing a way with tax breaks for the wealthy we could never afford anyway, along with $400 billion from the Pentagon’s budget.
4. Remember, the alternative plan proposed by the Republicans seeks $4.4 trillion in deficit reductions over 10 years by helping millionaires and billionaires at the expense of the middle class.

Obama, tough, will have plenty more explaining to do because under his plan, the country’s debt-to-GDP ratio would rise at a higher rate than it would have under the recommendations of the Bowles-Simpson Deficit COmmission.

“There’s nothing necessarily wrong with putting deficit reduction on a shallower glide path than Bowles-Simpson recommends,” writes William A. Galston of the Brookings Institution.  “But rebuilding the public’s confidence requires all parties to the negotiations to be as transparent as possible about the consequences of their plans.”

Good point

–Jonathan Berr