“Nobody knew the economy was in such bad shape” … oh, yeah?

Soon after taking office, President Barack Obama crowed that  he’d cut the deficit in half by the end of his first term.

He made the pledge not as a candidate but as president.

It came in the East Room of the White House at the opening of his Fiscal Responsibility Summit on Feb. 23, 2009.

I want to be very clear: We cannot, and will not, sustain deficits like these without end.

Contrary to the prevailing wisdom in Washington these past few years, we cannot simply spend as we please and defer the consequences to the next budget, the next administration, or the next generation.

We are paying the price for these deficits right now.

In 2008 alone, we paid $250 billion in interest on our debt — one in every 10 taxpayer dollars. That is more than three times what we spent on education that year; more than seven times what we spent on VA health care.

So if we confront this crisis without also confronting the deficits that helped cause it, we risk sinking into another crisis down the road as our interest payments rise, our obligations come due, confidence in our economy erodes, and our children and our grandchildren are unable to pursue their dreams because they’re saddled with our debts.

And that’s why today I’m pledging to cut the deficit we inherited in half by the end of my first term in office.

Now, the President and his shills are hitting the talk shows asking for a pass on the pledge, saying that “nobody knew how deep the economic crisis was”.

Say, what?

Well, except for the Federal Reserve Board … as reported in their annual report … before Obama made the pledge.

click to see the whole report

Here’s the essence of the report:

The unemployment rate has risen to its highest level since the early 1990s, and other measures of labor market conditions—for example, the number of persons working part-time because full-time jobs are not available—have worsened noticeably.

The deteriorating job market, along with the sizable losses of equity and housing wealth and the tightening of credit conditions, has depressed consumer sentiment and spending; these factors have also contributed to the continued steep decline in housing activity.

In addition, businesses have instituted widespread cutbacks in capital spending in response to the weakening outlook for sales and production as well as the difficult credit environment.

In all, real gross domestic product (GDP) in the United States dropped at an annual rate of 3-3⁄4 percent in the fourth quarter; real GDP seems headed for another considerable decrease  2009.

Hmmm.  Sounds like the Fed knew.

If you don’t like the Fed, see the Kiplinger Report “They Called It Right (Predictions for 2009)”

Here’s a sampling:

ROBERT SHILLER, professor at Yale University: ” The present situation has many similarities to the Great Depression.”

PETER SCHIFF, president of Euro Pacific Capital: “”We’re going to be in a depressionary environment. Our economy will be a mess for years and years to come. ”

NOURIEL ROUBINI, chairman of RGE Monitor and professor at New York University: ” I expect that the recession will be very severe and that it won’t be over before the end of 2009.”

BOB RODRIGUEZ & TOM ATTEBERRY, chief executive officer and partner, respectively, First Pacific Advisors: “Projections of economic growth have been far too optimistic. This is a multiple-year problem.”

DAVID TICE, chief equity strategist for , Federated Investors: “This will be a longer-term decline — you’ll see fits and starts …   it’s likely going to take four to five to ten years (to recover). 

Maybe Obama’s crack economic team didn’t know, but it looks like way more than “nobody”  knew.

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