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BEIJING, Nov 18 (Reuters) - President Barack Obama gave his sternest warning yet about the need to contain rising U.S. deficits, saying on Wednesday that if government debt were to pile up too much, it could lead to a double-dip recession.
With the U.S. unemployment rate at 10.2 percent, Obama told Fox News his administration faces a delicate balance of trying to boost the economy and spur job creation while putting the economy on a path toward long-term deficit reduction.
His administration was considering ways to accelerate economic growth, with tax measures among the options to give companies incentives to hire, Obama said in the interview with Fox conducted in Beijing during his nine-day trip to Asia.
"It is important though to recognize if we keep on adding to the debt, even in the midst of this recovery, that at some point, people could lose confidence in the U.S. economy in a way that could actually lead to a double-dip recession," he said.
I've noticed, Obama does a lot of double talk. In one breathe he says the debt is out of control and we can't sustain the debt, but in the next breathe he wants to borrow and spend to push his ideology.
+++Federal Accounting Standards revision 167, effective Jan. 1, 2010. In essence, it’s a new accounting rule that will force financials to bring bad, off-balance sheet assets onto their books+++
“This coming consolidation of VIEs is likely one reason that banks have been hoarding cash and jacking rates on business credit cards -- for creditworthy customers -- up to 30% with no advance warning.
“This ultimately means slower formation of new credit, and in many cases -- i.e., Citigroup -- the outright shrinking of its balance sheet to a degree that starves a credit-addicted U.S. economy.”