President Obama does not care much about deficits -- other than worrying that big debt might matter in his re-election campaign.
In his first three budgets, Obama borrowed nearly $5 trillion. Currently, the government is borrowing about 45 percent of everything that it spends. Obama's projected 10-year plan would add nearly $10 trillion to existing U.S. debt. This spring he proposed the largest annual deficit in U.S. peacetime history, which is why his $3.7 trillion budget for 2012 was rejected in the Senate by a 97-0 vote.
In other words, under Obama, the government during the last three years has borrowed on average about $4 billion each day. That staggering sum is far in excess of the $1.6 billion per day during the eight-year tenure of George W. Bush, who until Obama's presidency had borrowed more than any peacetime president.
Apparently in Obama's worldview there are advantages to deficits that explain his fondness for unprecedented borrowing. In Keynesian terms, massive government red ink is supposed to foster economic prosperity by creating goods and services that a purportedly less efficient private sector cannot.
The administration certainly has added an additional 100,000 federal jobs and expanded food stamps to nearly 50 million recipients -- and in the process enlarged the pool of potentially grateful constituents. This belief in the superior wisdom of the state explains why almost all the Cabinet secretaries in the Obama administration came out of state or federal government, not from private enterprise.
Massive deficits not only empower more federal hiring and entitlements, but at some point lead to higher taxes. This gorge-the-beast notion is the flip-side of the Reagan-era idea of "starving the beast" of big government by cutting federal revenue through reduced tax rates
Higher taxes to Obama are not necessarily bad if they serve to redistribute income from the affluent to the less well off -- a sort of "spread the wealth" government way of addressing the supposedly inherent unfairness of private-sector compensation.
So why, then, has Obama suddenly turned to deficit reduction?
In a word, politics: The downside of massive borrowing finally outweighed the upside of bigger government. The Tea Party-inspired midterm election brought Republicans to power in the House of Representatives and scared congressional Democrats silly. That's why Democrats in the Senate voted unanimously to reject Obama's record-deficit 2012 budget -- the sort of intervention that is the fiscal equivalent of a concerned family forcing a binging relative into rehab.