The first questioner in the White House’s “Twitter Town Hall” asked President Barack Obama about the mistakes he had made while in office, and he promptly volunteered his government’s inability to reverse the steep decline in housing prices and to meet the public’s expectation of a quick economic recovery.
Most of the time, however, President Barack Obama used today’s event to repeat his campaign themes, debt ceiling pitch, and proposals to cut defense spending.
One thing he would have “done differently,” Obama said, “would have been to explain to the American people that it was going to take a while for us to get out of this” recession. “Even I did not realize the magnitude — because most economists didn’t realize the magnitude — of the recession … [and so] people were not prepared for how long this would take.”
“I take responsibility for that because setting people’s expectations is part of how you end up being able to respond well,” he said.
Republicans say Obama’s policies have slowed the recovery from the recession. Businesses are reluctant to expand production or to hire staff for fear that new government regulations, such as health care rules, would increase their costs faster than their revenues could rise, say Republicans and business lobbyists.
“The other area is housing,” he said. “The continuing decline in the housing market hasn’t bottomed out as quickly as we expected … that has probably been the most stubborn of problems.”
The decline in housing prices came after the massive government-driven bubble in housing prices seen during the last 10 years. That bubble was spurred by government policies dating back to the 1980s and 1990s, and it burst when many low-income people were unable to afford their large mortgages.
The collapsed real estate market wrecked balance sheets on Wall Street and collapsed many complex financial deals. (White House uses Twitter to bully critics)
Since his inauguration, Obama has said he has revamped government policy to offset the property collapse, and to keep people in their houses.
Whenever house values shrink below mortgage values, “that obviously burdens a lot of folks … they don’t feel like they have any assets,” and so they’re less likely to spend, Obama said. Administration officials “are working with mortgage issuers and service companies [and] homeowners who are trying to do the right thing, to see if they can modify the loans to make their payments lower … or even to reduce the [mortgage] principal, so they don’t walk away,” he said. The housing collapse, he said, is a “big drag” on the economy.
When pitching his campaign themes and his debt ceiling preferences, Obama called for federal “investment” programs, for tax increases, and for defense cuts.
Tax increases on “millionaires and billionaires,” he said, “would raise hundreds of billions of dollars … [and] we could solve our deficit and debt problems” with some additional spending cuts, he said. “This is not something that requires radical solutions. … And that’s what I’ve proposed,” he said.
Defense spending can be cut gradually, Obama said, because it includes unneeded programs. “The nice thing about the defense budget,” he said, is that “a one percent reduction is the equivalent to the education budget.”
“It is not,” Obama immediately added. “I’m exaggerating, but it is so big that you can make relatively modest changes in defense … to fund things like basic research or student loans,” he said.
In April 2011, the federal Department of Education was given $69 billion for the fiscal year. The Department of Defense’s budget amounted to $534 billion.
However, Obama made clear that he did not want any spending cuts in welfare programs. “There are some [welfare] programs that can always be improved, and if there are some programs that don’t work, we should have the courage to eliminate them and put that money into programs that do work,” he said.
Throughout the event, Obama touted his campaign themes of government support for education and research, for federal spending on “green” energy projects, and for government health sector spending.
But the questions approved by the eight Twitter-approved gatekeepers largely ignored controversies like Obamacare and foreign policy, as well as social issues, such as marriage, abortion or gay rights.
The gatekeepers selected questions that allowed Obama to endorse government intervention in the economy, to promote his pending priorities, and to lay out his stance in the debt ceiling controversy.
When asked about welfare, for example, Obama called for a shift in government spending from welfare programs deemed failures towards programs deemed successful. “Some welfare programs of the past were not well designed, and in some case did encourage dependency,” he said. “I’ve seen it, where people weren’t encouraged to work, to upgrade their skills, [and] were just getting paid a check … and over time, their motivations started to diminish,” he said.
Government aid to manufacturing is needed, he said, because “manufacturing jobs end up having higher wages, and they also have bigger multiplier effects … one manufacturing jobs can support a range of other jobs,” such as suppliers and restaurants, he said. “It would be nice if we were making the iPods and iPads in the United States,” he added.