Unformatted text preview: Obama Eyes Domestic Spending F reeze The Obama administration has notified the domestic agencies to put a freeze on spending and or to cut back about 5 percent. China is the largest holder of U.S. t reasury securities and they have expressed a concern about the U.S. deficits. This has made the U.S. policy makers worry that foreigners will cut back on their purchases of Treasury debt. As a result, President Obama will visit China as part of his tour in Asia. White House budget director said that is it very important to start watching the f low of spending so that the economy can start recovering without raising interests rates. He would like to make it a balancing act, because he claims that acting too fast can interfere with repairing the economy. Although specifics of the budget were not stated, they will be revealed in February r ight after Obama's State of the Union speech. The government has reported that the federal deficit has hit a record high in October, totaling nearly $177 billion, higher than the $150 billion that the economist had expected. The deficit for 2009 that ended in September, also hit an all t ime high of $1.42 t r i llion. As far as tax raising deficit deals, that did not have a positive effect in the past. For deals made in 1990 and 1993, this caused George H.W. Bush to lose his re-election. I t is hard to really judge how the U.S. is doing exactly with all the debt that is mostly financed in foreign count ries such as China. I feel that if spending is not cut back, then getting out of this debt is going to be nearly impossible. Yet, how can spending be cut back, if we are still spending on the war in I raq. I really don't feel any American really has an idea of what is t ruly occur ring in their count ry. On the brighter side, at least the Obama administration is taking steps towards possible solutions to the deficit. ...
View Full Document
- President of the United States, United States public debt, Eyes Domestic Spending