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Flashback: Obama Tells C-Span 'We've Run Out Of Money'

Video - Obama on C-Span discussing health care & GM - May 23, 2009

The pink elephant gets some love as Obama admits:

  • "Well, we're out of money now..."



In a sobering holiday interview with C-SPAN, President Obama boldly told Americans: “We are out of money.”

C-SPAN host Steve Scully broke from a meek Washington press corps with probing questions for the new president.

SCULLY: You know the numbers, $1.7 trillion debt, a national deficit of $11 trillion. At what point do we run out of money?

OBAMA:  Well, we are out of money now.  We are operating in deep deficits, not caused by any decisions we’ve made on health care so far.  This is a consequence of the crisis that we’ve seen and in fact our failure to make some good decisions on health care over the last several decades.

So we’ve got a short-term problem, which is we had to spend a lot of money to salvage our financial system, we had to deal with the auto companies, a huge recession which drains tax revenue at the same time it’s putting more pressure on governments to provide unemployment insurance or make sure that food stamps are available for people who have been laid off.

So we have a short-term problem and we also have a long-term problem. The short-term problem is dwarfed by the long-term problem. And the long-term problem is Medicaid and Medicare. If we don’t reduce long-term health care inflation substantially, we can’t get control of the deficit.

So, one option is just to do nothing. We say, well, it’s too expensive for us to make some short-term investments in health care. We can’t afford it. We’ve got this big deficit. Let’s just keep the health care system that we’ve got now.

Along that trajectory, we will see health care cost as an overall share of our federal spending grow and grow and grow and grow until essentially it consumes everything…

SCULLY: When you see GM though as “Government Motors,” you’re reaction?

OBAMA: Well, you know – look we are trying to help an auto industry that is going through a combination of bad decision making over many years and an unprecedented crisis or at least a crisis we haven’t seen since the 1930’s. And you know the economy is going to bounce back and we want to get out of the business of helping auto companies as quickly as we can. I have got more enough to do without that. In the same way that I want to get out of the business of helping banks, but we have to make some strategic decisions about strategic industries…

SCULLY: States like California in desperate financial situation, will you be forced to bail out the states?

OBAMA: No. I think that what you’re seeing in states is that anytime you got a severe recession like this, as I said before, their demands on services are higher. So, they are sending more money out. At the same time, they’re bringing less tax revenue in. And that’s a painful adjustment, what we’re going end up seeing is lot of states making very difficult choices there…

SCULLY: William Howard Taft served on the court after his presidency, would you have any interest in being on the Supreme Court?

OBAMA: You know, I am not sure that I could get through Senate confirmation…


Since Obama wants to talk health care...

Video:  Paul Ryan vs. Obama

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Reader Comments (7)


« IT'S OFFICIAL: Deficit Obama Signs Law To Raise Public Debt Limit To $14.3 Trillion »

Jan 12, 2011 at 5:59 AM | Registered CommenterDailyBail
Bailout By The Numbers: Total Fed Committments Now Total $13.9 Trillion...All Of Which Must Be Borrowed

Now that we have allocated a potential $13.9 trillion for the solution (roughly 7 years of total federal tax receipts OR 100% of GDP---you choose the metric that makes you the least angry), it's nice to hear that the problem is solved, that the banking and credit crisis has run its course.

Excuse my language, but that's $13.9 trillion FUCKING dollars. That's a hell of a special committment given that we are flat broke and every single, solitary buck must be borrowed.

Jan 12, 2011 at 6:01 AM | Registered CommenterDailyBail
Land Of The Free And Home Of The Broke: The United States Of Insolvency

I have been waiting to do this piece for awhile. As a 21 year-old rookie at still fledgling CNN Washington in the summer of 1987, I got to know one of our senior producers while I rotated through the graveyard shift. Charlie covered the overnight from Washington and never had anything to do because Atlanta was in charge from our Larry King sign-off at 10 pm until they tossed back at 7 am the next morning. (This was the summer of Oliver North and the Iran Contra hearings and Atlanta wanted someone on stand-by in DC just in case.) Mostly, Charlie just read to pass the time and talked.

Jan 12, 2011 at 6:02 AM | Registered CommenterDailyBail
« Bailout News Stimulus Edition: Generational Rape With A Trillion Dollar Shovel »

Also missing from the debate is the concern for our children and the unconscionable debt burden we are leaving them. Keynesians, what value are you adding? Your insane belief in the power of government spending is painful entertainment for the rest of us who can smell the bull the minute you hit town. Where is the grand vision? Where is the vital infrastrucure? Why do these projects merit the borrowing of $1 trillion more from our children's increasingly dim futures? We're still waiting to hear how each project will further our national interest.

So stop wasting our time with your useless theory on how this giveaway will substantially boost the economy. We're not buying it. It didn't work in the 1930s and it's not going to work now. Are you listening, Krugman.

Jan 12, 2011 at 6:04 AM | Registered CommenterDailyBail
« Hillary Clinton Fires The First Shot For 2012: "Rising National Debt Is A Threat To National Security" (VIDEO) »

Jan 12, 2011 at 6:06 AM | Registered CommenterDailyBail
The student loan debt bubble



The two largest holders of student loans are SLM Corp (SLM) and Student Loan Corp (STU), a subsidiary of Citigroup. SLM -Sallie Mae- was originated as a Government Sponsored Enterprise (GSE) in 1972. The idea was to prime it for eventual privatization. In 2002 Sallie Mae shed the its GSE status and became a subsidiary of the Delaware-chartered publicly traded holding company SLM Holding Corporation. Finally, in 2004 the company officially terminated its ties to the federal government.

As the nation's largest single private provider of student loan funding, SLM has to date lent to more than 31 million students. In 2009 it lent approximately $6.3 billion in private loans and between $5.5 billion and $6 billion in 2010.

In the 1990s, well before its full privatization, Sallie's operations were increasingly swept into the financialization of the economy. It jumped whole hog onto the securitization bandwagon, lumping together and repackaging a large portion of its loans and selling them as bonds to investors. SLM created and marketed its own species of asset-backed securitized student loans, Student Loan Asset Backed Securities (SLABS). When derivatives trading went through the roof following the 1998 repeal of Glass-Steagal, increasingly diverse tranches of Sallie-Mae-backed SLABS entered the market. The company is now also buying and selling the obligations of state and nonprofit educational-loan agencies.

Student loans were included in the same securities that are blamed for the triggering of the financial crisis, and financial products containing these same student loans continue to be traded to this day. The health of these tranches and securities is, as we have seen, highly suspect.
Jan 12, 2011 at 11:23 AM | Unregistered Commenterjohn
nice link john...
Jan 12, 2011 at 4:11 PM | Registered CommenterDailyBail

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