SCULLY: You know the numbers, $1.7 trillion debt, a national deficit of $11 trillion. At what point do we run out of money?There's The Won's obligatory plug for health care reform. Does he realize what a non sequitur that is? Perhaps he actually believes that reforming health care will save the economy.
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.
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.Actually, Medicare is a medium term problem. It'll become insolvent in 2017, two years earlier thanks to the current administration's bloated spending this year. Presumably, another year of record spending will shave another year or three off Medicare's projected insolvency date.
The long-term problem is the other American Ponzi scheme: Social Security. It will be depleted in 2037, four years sooner thanks again to reckless government spending this year.
SCULLY: When you see GM though as “Government Motors,” you're reaction?GM and Chrysler are zombie companies. While the undead may be animated for a time with large infusions of tax payer money, they are still dead. The government can "get out of the business of helping auto companies" anytime by sending GM and Chrysler to a bankruptcy court to have their functioning organs cutout and auctioned off. Since the government avoided that option, Obama is being disingenuous when he suggests that they're moving "quickly".
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?I wish reporters would ask questions in a way that prevents wiggle room. The question should have been: "will you bailout the states?" or "will you bailout California?" If you were to ask Obama: "were you forced to bailout the auto industry?" The answer would be "no." If you asked him: "were you forced to support TARP?" Again, the answer would be "no."
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...
We are talking to state treasurers across the country, including California, to figure out are there some creative ways that we can just help them get through some of these difficult times...
Megan McArdle has some interesting posts about Federal bailouts of California and municipalities.
Update: Gateway Pundit has the video.
Update 2: Glenn Reynolds agrees in colorful terms:
So we’re out of money because we don’t have national health care? Bogus. I think, instead, that it has something to do with the fact that Obama has been pouring money down a crony-statist rathole at absolutely astronomical and unprecedented rates.