Jack Welch, the revered former chief executive of General Electric, says that while he admires President Obama, White House budgets are profligate and extremely dangerous.
He joins other chief executive luminaries, including retiring Intel Chairman Craig Barrett, in warning that the government’s growing role in the economy, and the trillion-plus deficits that will bring, is a serious risk to the economy.
“The guy is such a magnificent communicator,” Welch tells Bloomberg TV. “His personal magnetism makes him a heck of a leader in terms of being able to communicate, put a vision together and deliver.”
But that doesn’t mean Welch approves of the president’s budget.
“He’s building the America he wants with enormous spending, betting on a budget that has growth of 4 percent over the decade,” Welch says.
“We haven’t had 4 percent in a decade in the last … 50 years. He’s creating the thing he needs at this moment. To get the money he needs, he has to have a fake budget.”
“He’s fooling people about how we’re going to have the top line support, the programs in the middle without enormous taxes,” Welch says.
Welch warns that massive deficits are more likely than success under Obama’s apparent plan.
Intel Chairman Barrett recently had similar warnings for The Arizona Republic newspaper.
“The thing I'd be most concerned about right now is deficits. What we're doing for short-term stimulus is cool and necessary, and I think everybody buys into that. It's what we're doing longer term . . . government infrastructure, government costs we're putting in place.
“Personally I'm frightened to death of the trillion-dollar deficits everybody's looking at years two through 10 of the next decade. I don't see how those are sustainable,” Barrett said.
“It means a lot for people like Americans because when we start to get up with a deficit which is approaching 100 percent of GDP then … the Chinese are going to wake up some day and say, 'I don't want your IOUs anymore,'” Barrett continued.
“All the sudden the dollar's going to be worth 50 percent of what it was worth the day before, which means the standard of living of every U.S. citizen crashes, and the government can't print money to make up for that.”
Economists, too, are warning of significant problems ahead.
"I think deficits of 5 percent [of GDP] are unsupportable," Mark Zandi of Economy.com tells the Associated Press.
"It will lead to higher interest rates to the point where it will force policymakers to make changes."
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