« | »

Obamas Lived Way Above Their Means

Somehow this very interesting bit of information almost slipped by us.

Buried in the ‘Opinions’ section of the May 2, 2009 edition of the Daily News:

President Obama’s troubling mantra: In debt, we trust

President Obama’s troubling mantra: In debt, we trust

By Richard Henry Lee   

Saturday, May 2nd 2009

It is no surprise that President Obama supports unprecedented spending and borrowing in the federal budget since he has never suffered any consequences from the excessive spending and borrowing in his private life.

And I’m not just talking about the First Lady’s $540 sneakers.

A close examination of their finances shows that the Obamas were living off lines of credit along with other income for several years until 2005, when Obama’s book royalties came through and Michelle received her 260% pay raise at the University of Chicago. This was also the year Obama started serving in the U.S. Senate.

During the presidential primary campaign, Michelle Obama complained how tough it was to make ends meet. During a stop in Ohio, she said, "I know we’re spending – I added it up for the first time – we spend between the two kids, on extracurriculars outside the classroom, we’re spending about $10,000 a year on piano and dance and sports supplements and so on and so forth."

Let’s examine how tough things were for this couple using various public records.

In April 1999, they purchased a Chicago condo and obtained a mortgage for $159,250. In May 1999, they took out a line of credit for $20,750. Then, in 2002, they refinanced the condo with a $210,000 mortgage, which means they took out about $50,000 in equity. Finally, in 2004, they took out another line of credit for $100,000 on top of the mortgage.

Tax returns for 2004 reveal $14,395 in mortgage deductions. If we assume an effective interest rate of 6%, then they owed about $240,000 on a home they purchased for about $159,250.

This means they spent perhaps $80,000 beyond their income from 1999 to 2004.

The Obamas’ adjusted gross income averaged $257,000 from 2000 to 2004. This is above the threshold of $250,000 which Obama initially used as the definition of being "rich" for taxation purposes during last year’s election campaign.

The Obama family apparently had little or no savings during this period since there was virtually no taxable interest shown on their tax returns.

In 2003, they reported almost $24,000 in child care expenses and, in 2004, about $23,000. They also paid about $3,400 in household employment taxes each year. And as Michelle stated, they spent $10,000 a year on "extracurriculars" for the children.

These numbers clearly show the Obamas were living beyond their means and they might have suffered financially during the decline in housing prices had they relied on taking ever larger amounts of equity from their home to pay the bills.

But in 2005, Obama’s book sales soared and the royalties poured in. Michelle explained, "It was like Jack and his magic beans."

Without those magic beans, the Obama family would have eventually suffered the consequences of too much debt.

Obama’s penchant for borrowing in his private life carries over to his public life.

He gave the Congress virtually free rein in writing the huge stimulus bill. He had no reservations whatsoever about the country assuming so much debt. Other Presidents have tried to work out compromises on spending measures since it is ultimately the President who takes responsibility for the consequences.

Obama did make a feeble attempt to control spending when he announced that his cabinet had found ways to reduce federal spending by $100 million. But this is laughable. Compared to an estimated $3.6 trillion federal budget, it is a minuscule 0.0028%.

To put this into the context of the Obamas’ income for 2004 of $207,647, this savings works out to $5.77, or about the price of an arugula salad.

President Obama has never faced consequences in his private life when it comes to managing money. He always had enough money simply by borrowing more and more. And just when things got tight, those magic beans came along to save the day.

But as a nation, we cannot base our future on the hope that some day Jack and those magic beans will also save the rest of us.

Mr. Lee, whom the Daily News informs us is a California official writing under a pseudonym, is really on to something here.

As is the twig bent, so is the man.

Isn’t it funny how none of this came up during the campaign. Everyday we learn something new about this man.

If only we had a watchdog media to vet our candidates.

  Update!

Well, it turns out that the pseudonymous Richard Henry Lee originally wrote this for the (great) American Thinker, back in April 10, 2009.

Indeed, the New York Daily News thought so highly of the piece they commissioned him to write it as an editorial for them – which is what we posted above.

In any case, it is certainly worthy of a reprint.

(Thanks to Proreason for the heads up.)

This article was posted by Steve Gilbert on Sunday, May 17th, 2009. Comments are currently closed.

35 Responses to “Obamas Lived Way Above Their Means”

  1. proreason

    Revealed. Why Obamy has no worries about bankrupting the country. We somehow missed this a few weeks ago in the Daily News:

    President Obama’s troubling mantra: In debt, we trust

    It is no surprise that President Obama supports unprecedented spending and borrowing in the federal budget since he has never suffered any consequences from the excessive spending and borrowing in his private life.

    And I’m not just talking about the First Lady’s $540 sneakers…
    But in 2005, Obama’s book sales soared and the royalties poured in. Michelle explained, “It was like Jack and his magic beans.”

    http://www.nydailynews.com/opi.....trust.html

    When you have lived a life of total irresponsibility coupled with “luck”, it’s just a small step to force the same upon the country.

    The “magic beans” discussed in the article were the payoff from The Moron’s self-serving auto-“biography” / “fantasy”. Curiously, that payoff didn’t arrive until 10 years after he wrote his first edition at the ripe old age of 34, but just about the time George Soros started pouring money into his campaign coffers.

    Maybe the genius plans to write a 3rd edition to fund the debt that otherwise will cripple our kids, their kids, and their kids for decades, or more likely, forever.

    In his mind, his life story must be worth trillions.

  2. Rusty Shackleford

    I kinda figured this was the case.

    You know, I had toyed with this idea in my head and wonder further if this will be the first rags to riches to rags president we see. Not unlike an NFL lineman who has 5 good years in the league, makes a couple of million and then can’t pay his bills when the “career” is over. It is easy to get used to…that high-dollar lifestyle. I’ve never heard a person say, “You know, the hardest thing for me was whether to buy the Versace , or the Christian Dior; The Aston Martin or the Ferrari.”

    So when the book royalties stop rolling in, and they will. When the public largely forgets that this “magic negro” was ever president, and they will, except for it being on PBS every freakin’ minute of every day for the next 20 years….they will largely find themselves without a parachute. No net, no paddle, etc.

    Unless, unless, they have set themselves up for the future (which doesn’t sound like what they know how to do).

    Another guess is this may be the first president who will take monies, big heaping piles of (public) monies and stuff it in places that are hard to find and live off that after he’s done wrecking our economy.

    Many factors will certainly weigh in here and the future is a blank canvas, always. But part of me sees the obvious ego-strut that so many have, and I wonder if, like so many have, he will find himself in relative financial obscurity in the long run. He’s not a “long run” kind of person, as indicated by his quick-flops and ‘catch-phrase-of-the-day’ type of rhetoric.

    In the end, it may just be a pipe-dream for me to see him in financial ruin, addicted to heroin and living on the street.

    • heykev

      While it comes as no big suprise that BHO spends his own like water. I do not believe he will be hurting for cash after he leaves office in 2012.

      There are always liberals who will pay for BHO’s self-serving memoirs, listen to what his Teleprompter has to say about events that are taking place (similar to Bill Clinton). Here’s hoping he will be the next Jimmy Carter…one term President and then into the sunset. . .forever.

    • Liberals Make Great Speedbumps

      Hey Rusty,

      Ever heard of the term “ni**er rich”? I don’t mean to be crass but it sums up what you’ve described perfectly.

    • Lurkin_no_mo

      Sometime in the near future, I hope to spot a deralict on the street with a sign saying “Ex-POTUS, will werk for fud”.

  3. Kilmeny

    There’s a big surprise.

  4. pagar

    When the public largely forgets

    Has the public forgotten Fidel Castro or Hugo Chavez? My guess is Obama has no plans for any ” after his presidency”, Just like his heroes.

  5. U NO HOO

    “Obama’s penchant for borrowing in his private life carries over to his public life.”

    That is the whole problem with Obama’s “stimulus and recovery” plan.

    He may spend his money however he wants, but don’t spend my future money, or my grandchildren’s future money recklessly, please.

  6. 1sttofight

    Why does no one in the picture look happy?

    • MinnesotaRush

      Good observation, flight (and welcome back – haven’t seen you on here in a while).

      It would seem that the o-blah-blah girls may be thinkin’, “.. does he EVER just shut up ..”.

      Hell .. even the dog is on the run with his tail in the air (probably thinkin’ .. “this guy is just so full of crap himself .. ‘.

  7. Confucius

    Do As I Say, Not As I Did

    It wouldn’t suprise me if Obama issued an executive order banning black presidents after him.

  8. U NO HOO

    Who bought Obama’s books and did they pay with plastic?

  9. This is a great article. For me, it conjurs up 2 thoughts:

    1) Barry is a reincarnation of the despotic Soviet commisars who secretly kept beautiful summer homes and other treasures while inflicting the socialist nightmare on the Russian masses that weren’t sent to the gulags or executed;

    2) The smug self-righteous quality of all liberals who insist on YOUR kids being sent to public schools while they grace their own kids with private education. His sickening personality is on display here: http://www.youtube.com/watch?v=XXIvmJ8xenc

  10. Here is how it works in politics:

    You borrow $100,000 on your house at 6% and lend it to your campaign at 15%. The campaign holds fundraisers to pay campaign debt. You make sure that your loan is always current with respect to interest but is the last paid in full. A campaign fund can carry such debt for decades. So you use the repayments from the campaign to retire the debt on the mortgage early and the rest is cash in your pocket. Lending money to your own campaign is the most lucrative racket around for politicians. Particularly for politicians that remain in office for many years.

    Anyone seen the Obamas’ tax return? How much is claimed for “interest income”? If you are a politician, borrowing to the hilt is actually a money maker as long as you lend it back to your campaign and charge the campaign more interest than you are paying. It is the mechanism by which politicians siphon money out of their campaign funds into their own pockets.

  11. jrmcdonald

    Another democrat funding his life by shady means. This is news?

  12. sheehanjihad

    Hot Air has this post featured front page, just so you know we run with the big dogs….

  13. canary

    This child-care deduction may not be legit. If Obama’s reported statement that his girls went to the University Chicago Labs School, as he claims since he claims convience teaching at the University. The school gives approx 50% discount, no more than 500 dollars a month. Of course 5 years ago, was probably less that 500 dollars a month per child. may have been A Private School from nursery age to 12th grade,
    Non-taxable school. Then, I dont’ see how Obama paid this child-care expensives, because at first glance, I thought this daychild care amount seemed hire than private schools costs. Also, grandmother helping out. Now this school did have extra fees for all the arts and sports. A very hands on private school. But, of course the 10,000 on piano lessons, dance, sports, etc. is not tax-deductable either.

    But, then if Tim Giethner’s claimed overnight camp on his children, who didn’t need an accountant to tell him this, and even after accountant told him he couldn’t deduct this camp, failed to amend his returns. Forgiven as an honest error?

    several links and news claims Obama’s girls went to this private school, associated with the University that Obama taught at. It is not a child/day care service, so I’m assuming this may be correct?

    http://wiki.answers.com/Q/Do_B.....blic_schoo

    http://hr.uchicago.edu/benefit.....P303_22700

    In 2003, they reported almost $24,000 in child care expenses and, in 2004, about $23,000.

    • canary

      They sold the house for approx 400,000. To the public as he played the poor
      act, he called it a 3 bedroom condo, but, actually it had 4 bedrooms in the description, over 2000 feet. I’m guessing one of the 4 bedrooms, they used an office. However that condo had the least information that all the other houses had, to include ownershtip and regular accessor information. These condo’s were former fraternity addition. A lot of prestigous people once owned them.

  14. Child care for my kids is about $1000/month during the school year and about double that during summer vacation. When my children aged 3 and 4, I had them in local private pre-school. My daughter went to a Lutheran pre-school and my son went to a Methodist pre-school. Costs were about $1K/month per child for preschool/daycare. I was able to go to work later in the morning so I dropped them off at 9am for school and the on-site daycare took over from after lunch until 5pm. Obama’s rates are not unreasonable figuring that 24,000 amounts to $1,000 a month for the two kids. That is about average in most major metros. In fact, that is kinda cheap considering that my expenses are something close to $27,000 a year for child care for two elementary aged kids. I am a single sole parent living in an expensive area, I am pretty sensitive to child care costs.

    • canary

      I do not think you understand the difference between day/child care at a private
      church or day care is taxtable. But, his children went to a private school.

      The school says it’s not taxable. Today is 50% discount if the parent teaches at the univeristy, but no more than 500 dollaras a month. So, since he taught at the school, which he did teac at the Univesity, than it would under 1000 a month. The piano, sporsts, and all cost more. Now in NY, CA where prices are outragous for day care, private. I’ve not heard of public day care. There is head start for some children. I know some women, who the state has aided because, many that make only 1000 a month on min wage, couldn’t possibly afford daycare. The state paid the private daycares.
      But, my oldest chidren when to private school, and day care afterwards. The day care was deductable, but the private school was not tax-deductable.

      http://wiki.answers.com/Q/What.....in_Chicago

      The girls went to Chicago Lab School, just minutes away from their Chicago home. Barrack Obama taught there and wanted the kids to go to this private school.

      What Is Covered
      What Is Covered

      The University pays 50% of the tuition at the University of Chicago Laboratory Schools for Dependent Children. For University Laboratory School teachers, other than full-time assistant teachers, the University pays all but $500 of your child’s tuition bill for the school year.

  15. curvyred

    I remember something about student loans just being paid off a few years ago – (MO speech at CMU)

    • canary

      Curvyred, your’re correct. Obama said this many times while running, which is why he wants free school from birth to college. He also mentioned scholarhips which are often given to minorities inspite of grade, also, he got free pelgram granst. I imagine it was Harvard that prehaps he took some loans, as he never has mentioned, or written what kind of grades he made. Apparently, he milked paying the government back, feeling all education should be free, and as far as his compliaining of the cost of the loans being expensive doing to bank interest, if he and his wife had paid the loans off early, intead of stretching them out till a few years ago, maybe he’d have saved on interest.

    • 1sttofight

      Funny that Bam went to Occidental College(his first school on the mainland) on a Fulbright Scholarship which is only given to foreign students to study in the USA.
      Makes you go Hmmmmmmmm…

    • Rmy-mac-was-here

      Not only does that raise questions, but several other items in his past cause me concern over his CiC qualifications. What passport did he travel to Pakistan way back in the early 80s (as I recall it was a no US travel zone then), those pakistani friends that he they lived together with in NY, Exactly who and where are they now, he experimented with recreational drugs with with what friends? why did he not release the long form of his birth certificate? And this bozo will send our sons and daughters to some of the worst armpits of the world. This guy learned his political trade from the best democrat President. He has got moves that slick willy is drooling over.

  16. ptat

    Like Bill Clinton, Al Gore, etc. Obama is set for life. There is no doubt he will reap many millions in speeches and books after one or two terms. There is a ready made audience out there for this mindless crap. BTW, does anyone know anyone that actually read Bill Clinton’s memoirs? Many bought, but it appears to me few read it. Symbolism, you know?

  17. catie

    I can’t add more than what you all already have but I’m not surprised either. Why in the heck does this clown think he knows more than us. This “spending our way out of recession” now makes sense but we don’t have any “magic beans”.

    • Liberals Demise

      There were never any magic beans at all…………but O’blowmy talks a mean “beanstalk!!”

    • Rmy-mac-was-here

      Catie, I hate to say this but President Reagan also spent our way out of something…. A lot of money went into the military budget, but it worked, and it paid huge dividends later on. Much of the technology we take for granted on the battlefield was developed during the 80s and 90s (I figure Reagan and Bush 41 were the same platform). Since that time we have fought 3 solid wars all succesfully with few casualties (I know casualties sounds blasie but try looking up casualty figures for vietnam and korea: you will soon conclude that these last three wars were extrememly cheap in terms of blood) and had several regional actions of either peacekeeping or humanitarian nature.
      However, I dont see how any of this economic stimulous is going to pay ANY dividends. I mean trade is still capitalism, each country wants to do better than the others. I just hope they look at bringing more energy sources on line. The cheaper electricity is the more viable other aspects of electricity usage for the economy. My small town gives breaks to electrical use in the Industrial park and also has learned to lower the tax rates for that area. Keeps the businesses from moving to Mexifornia.

  18. Reality Bytes

    Saw some canine ads in the Dupont Registry. Would you pay 50 grand for a dog? I wonder how much the Obamas paid for theirs. More imporant: I wonder WHO paid for it.

    • heykev

      Here’s what I found out about this: “The dog is a gift from Sen. Edward M. Kennedy, D-Mass., who owns several Portuguese water dogs himself.” A bit of irony there with Kennedy owning a water dog.

  19. Right of the People

    Well, this certainly explains a lot!

  20. proreason

    Obamy forgives his credit-card lifestyle in arrears. From Townhall:

    Credit card reforms up for Senate vote
    http://townhall.com/news/polit.....enate_vote

    “, the credit card industry would be required within nine months to change the way it does business: Lenders would have to post their credit card agreements on the Internet, let customers pay their bills online or by phone for free and give customers 45 days notice and an explanation before interest rates are increased.

    In a key provision addressing a concept called “universal default,” a customer would have to be more than 60 days behind on a payment before seeing his rate on an existing balance increase. Even then, the credit card company would be required to restore the previous, lower rate after six months if the consumer pays the minimum balance on time.”

    The net effect of this, of course, is that it will be even harder for people to get credit.

    And since the credit card companies costs will increase, they will charge higher interest.

    No matter what it is, if The Moron does it, it’s the wrong thing to do.

    • proreason

      And from the Slimes:

      “It will be a different business,” said Edward L. Yingling, the chief executive of the American Bankers Association, which has been lobbying Congress for more lenient legislation on behalf of the nation’s biggest banks. “Those that manage their credit well will in some degree subsidize those that have credit problems

      Ain’t that great.

      I woke up today hoping for a new way to subsize deadbeats. Now my dream is about to come true.


« Front Page | To Top
« | »