Saudi Arabia and India agree to study feasibility of establishing power grid    Saudi Awwal Bank records SR5.9 billion net profit after Zakat and Income Tax for YTD Q3    Economy minister emphasizes global partnerships to address pressing challenges Private investments in non-oil sector soar 70%    Saudi Arabia's GDP grows 2.8% in Q3, driven by non-oil sectors    PIF, HKMA sign MoU to establish $1 billion investment fund    Israeli soldiers forced Palestinian men to take off clothes as they evacuated war-torn Jabalya    North Korea fires suspected intercontinental missile    India celebrates Diwali, the festival of lights    'It was like a tsunami': Spaniards recount horror of deadly floods    Bahrain Crown Prince receives Saudi Interior Minister    In-person classes will remain suspended in Jeddah, Rabigh and Khulais schools on Thursday    HR Ministry takes penal action against 568 violators of Domestic Workers' Regulation    Derby Week makes its debut in the Roshn Saudi League    Al Nassr eliminated from King's Cup after a defeat to Al Taawoun    Teri Garr, Young Frankenstein and Tootsie star, dies at 79    Othman Al Omeir receives Legacy of Change Medal at the UK Parliament for advocacy in media    Neymar joins Saudi fashion trend, donning traditional attire at Al Hilal match    Indonesia Days event celebrates cultural diversity at Al Suwaidi Park    Saudi Football Federation reappoints Hervé Renard to lead national team    Tarzan star Ron Ely dies aged 86    India puts blockbuster Pakistani film on hold    The Vikings and the Islamic world    Filipino pilgrim's incredible evolution from an enemy of Islam to its staunch advocate    Muted Eid celebrations for millions of Nigerian Muslims    Exotic Taif Roses Simulation Performed at Taif Rose Festival    Asian shares mixed Tuesday    Weather Forecast for Tuesday    Saudi Tourism Authority Participates in Arabian Travel Market Exhibition in Dubai    Minister of Industry Announces 50 Investment Opportunities Worth over SAR 96 Billion in Machinery, Equipment Sector    HRH Crown Prince Offers Condolences to Crown Prince of Kuwait on Death of Sheikh Fawaz Salman Abdullah Al-Ali Al-Malek Al-Sabah    HRH Crown Prince Congratulates Santiago Peña on Winning Presidential Election in Paraguay    SDAIA Launches 1st Phase of 'Elevate Program' to Train 1,000 Women on Data, AI    41 Saudi Citizens and 171 Others from Brotherly and Friendly Countries Arrive in Saudi Arabia from Sudan    Saudi Arabia Hosts 1st Meeting of Arab Authorities Controlling Medicines    General Directorate of Narcotics Control Foils Attempt to Smuggle over 5 Million Amphetamine Pills    NAVI Javelins Crowned as Champions of Women's Counter-Strike: Global Offensive (CS:GO) Competitions    Saudi Karate Team Wins Four Medals in World Youth League Championship    Third Edition of FIFA Forward Program Kicks off in Riyadh    Evacuated from Sudan, 187 Nationals from Several Countries Arrive in Jeddah    SPA Documents Thajjud Prayer at Prophet's Mosque in Madinah    SFDA Recommends to Test Blood Sugar at Home Two or Three Hours after Meals    SFDA Offers Various Recommendations for Safe Food Frying    SFDA Provides Five Tips for Using Home Blood Pressure Monitor    SFDA: Instant Soup Contains Large Amounts of Salt    Mawani: New shipping service to connect Jubail Commercial Port to 11 global ports    Custodian of the Two Holy Mosques Delivers Speech to Pilgrims, Citizens, Residents and Muslims around the World    Sheikh Al-Issa in Arafah's Sermon: Allaah Blessed You by Making It Easy for You to Carry out This Obligation. Thus, Ensure Following the Guidance of Your Prophet    Custodian of the Two Holy Mosques addresses citizens and all Muslims on the occasion of the Holy month of Ramadan    







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Deficit pledge haunts Obama
Published in The Saudi Gazette on 20 - 02 - 2012


David Lawder
Reuters
One month after taking office, President Barack Obama summoned the nation's top lawmakers and budget experts to the White House for a summit to figure out how to tame huge federal deficits.
Standing at a podium in the elegant East Room, the Democratic president wasted no time in reminding his audience, which included Republican congressional leaders, that he had just inherited a $1.3 trillion deficit in the midst of “an economic crisis unlike any we have seen in generations.”
He gave a finger-waving talk on fiscal responsibility and boldly pledged to halve the deficit in four years.
There was no hint in his remarks of the behind-the-scenes debate that had taken place among his advisers over whether such an ambitious promise could be kept. And as the economic recovery failed to take off, he stuck with it for the next two years.
On Monday, three years after first making that pledge, Obama conceded that he would not be able to keep it. The pledge casts light on how Obama's administration, in its attempt to articulate a bold vision for a nation in crisis, made a politically risky bet based on rosy assumptions that were later wrecked by an economy that did not play ball.
“If there was a mistake here, it was in making a pledge that was going to be a function of variables you couldn't foresee,” said Jared Bernstein, Vice President Joe Biden's former chief economist.
Republicans, aiming to make Obama a one-term president in November, have jumped on the broken pledge with glee, trying to turn up the heat on the leader even as a stronger economy threatens to undermine their argument for voting him out.
While his opponents seek to make political hay over the issue, analysts say voters are likely to judge Obama on his broader handling of the economy when they vote in November.
Obama played down the broken promise this week, blaming economic events beyond his control. The recession was much deeper than anyone had realized when he made the pledge on Feb. 23, 2009, he told an Atlanta broadcoaster on Tuesday.
“A lot of us didn't understand at that point how bad it was going to get,” he said.
That is true, budget experts agree. But they say the promise was still overly ambitious and left little room for surprises that could, and did, knock the economic recovery off course.
While it became frighteningly clear that the recession had been extraordinarily severe and the recovery lackluster, Obama reiterated his promise, even as late as February of last year.
“They made a dumb commitment,” said David Walker, a former U.S. comptroller general who took part in Obama's 2009 summit.
Obama's plan was based on the idea that the economy would post a quick recovery, much like it had after other recent recessions. It was supported by White House economic forecasts that were more optimistic than those of many private economists.
Many experts expected the financial crisis to do more lasting damage to the economy. Only months earlier, the nation's banking system had nearly seized up as panic gripped Wall Street following the bursting of a housing bubble.
“They had to know in so many ways with regard to housing and credit and jobs that they were in a problematic situation for economic recovery,” said Ethan Siegal, a fiscal policy expert who advises investors on Washington politics.
Still, Siegal said it was expected that a president would strike an optimistic tone during a crisis, helping him to project leadership. “Part of politics is rolling the dice.”
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