October 17th, 2009
07:49 AM ET

Dear President Obama #271: Deficit straight ahead!

Reporter's Note: The President is like the Captain of our economic ship. And that makes me like the guy who mops the deck, and longs for the day we set sail for home. Hence, all the letters…

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Tom Foreman | BIO
AC360° Correspondent

Dear Mr. President,

So the deficit has hit a new modern high, eh? Biggest since 1945! Well, congratulations on that. It may not be a record that you wanted, but it’s yours now anyway, so I suppose we should all try to make the best of it. And as much as I can tell from the screeching and chattering of the financial experts as they scale the sides of Treasury Building, making the best of a deficit means primarily making it short-lived.

I am sure you are well versed in the facts-of-deficit life. Like personal debt (or say, the child of a Colorado balloon enthusiast) a deficit left unattended can get into trouble. It can play havoc with inflation, upset the behavior of financial markets, and in short, start monkeying with the entire economy of the country.

By the same token, it’s long been an accepted economic theory that the right kind of targeted, limited debt can be just the ticket for bailing out a troubled economy. When money stops moving, and everyone start battening down the hatches, sometimes a big burst of cash from Uncle Sam, at least in theory, can make it look like happy days are here again, then everyone else starts spending, and Bob’s-your-uncle we have a recovery. Or something like that. I realize that is sort of the School House Rock version.

The secret seems to be all in the timing; knowing when the economy is solid enough to start pulling the deficit back down, without upsetting the forward momentum of the economy overall. Kind of like pouring a bunch of money into the opening of a new restaurant. Yes, you’ll be facing a deficit for a while, but at some point you have to balance out the bills with the burrito sales.

Anyway, I think you are going to be hearing an awful lot of questions about your deficit reduction plans, and I’m sure you’ll be talking about them a lot too. Just remember this: When it comes to something as big as our economy these days, it’s a bit like steering a ship. You’ll probably have to set your course well before the shoals are in sight, and then as Captain, you’ll have to confidently say “We are headed the right way,” and maintain your course, even as oceans of amateur navigators ask repeatedly, “Are you sure we’re supposed to turn here?”

Call if you can, but for heaven’s sake not during the Saints-Giants game!


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Find more of the Foreman Letters here.

soundoff (One Response)
  1. Sherri

    And yet people are trying to convince us the recession is over? I'm certainly not an economist....but this doesn't look good yet, nor does it feel like we are on a course of true recovery yet. But, I'm like you, Tom, I'm not the captain of the ship...maybe just the cook in the galley.

    October 17, 2009 at 3:31 pm |