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Obama Says U.S. Long-Term Debt Load �Unsustainable� (Update1)
By Roger Runningen and Hans Nichols
May 14 (Bloomberg) -- President Barack Obama, calling current deficit spending �unsustainable,� warned of skyrocketing interest rates for consumers if the U.S. continues to finance government by borrowing from other countries.
�We can�t keep on just borrowing from China,� Obama said at a town-hall meeting in Rio Rancho, New Mexico, outside Albuquerque. �We have to pay interest on that debt, and that means we are mortgaging our children�s future with more and more debt.�
Holders of U.S. debt will eventually �get tired� of buying it, causing interest rates on everything from auto loans to home mortgages to increase, Obama said. �It will have a dampening effect on our economy.�
The president pledged to work with Congress to shore up entitlement programs such as Social Security and Medicare and said he was confident that the House and Senate would pass health-care overhaul bills by August.
�Most of what is driving us into debt is health care, so we have to drive down costs,� he said.
Credit-Card Fees
Obama also prodded Congress to pass restrictions on credit- card issuers, saying consumers need �strong and reliable� protection from unfair practices and hidden fees.
�It�s time for reform that�s built on transparency, accountability, and mutual responsibility, values fundamental to the new foundation we seek to build for our economy,� the president said.
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