Obama to freeze spending?

Politico report:

President Obama plans to announce a three-year freeze on discretionary, “non-security” spending in the lead-up Wednesday’s State of the Union address, Hill Democratic sources familiar with the plan tell POLITICO.

The move, intended to blunt the populist backlash against Obama’s $787 billion stimulus and an era of trillion-dollar deficits — and to quell Democratic anxiety over last Tuesday’s Massachusetts Senate election — is projected to save $250 billion, the Democrats said.

This is a massive move to the centre, if true. It would also be a very good thing economically.

So in the UK Labour are talking spending cuts. In the US, Obama is talking a spending freeze. But in NZ, Labour’s only response to every issue is to demand more spending and more borrowing.

I’ve been saying for months and months that NZ Labour do not realise the world has changed. People understand that with huge deficits, there can’t be massive spending increases, big pay increases for public servants etc.

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