Sunday, July 31, 2011

Hedge Fund Manager Loeb: Obama Fueling Class Warfare

President Barack Obama is fueling class warfare with scare tactics over the debt-ceiling and other issues, says hedge fund manager Dan Loeb.

"The budget is not the only thing in deficit today, as a paucity of leadership has left the country without a stable framework in which businesses can conduct business, investors can invest, and consumers can consume without a high degree of uncertainty and fear," Loeb writes in a letter to his clients at Third Point, according to Dealbreaker.

The government is approaching its $14.3 trillion debt ceiling, and unless Congress approves an increase to that limit by Aug. 2, the country could default.

President Barack Obama
(Getty Images photo)
Obama has proposed tax hikes as part of his plan to narrow deficits in exchange for congressional approval to lift the ceiling, although he has been scaring people on what might happen if he doesn't get his way.

"Scaring senior citizens about the possibility of not receiving their Social Security and Medicare checks, lambasting the corporate jet industry, and calling for higher taxes on managers of private partnerships is not a constructive approach to handling a multi-trillion dollar problem that will have a multi-generational impact," Loeb says.

"It's increasingly difficult to avoid that conclusion that while Washington burns, President Obama is fiddling away by insisting that the only solution to the nation's problems — whether unemployment, the debt ceiling or deficit reductions — lies in redistribution of wealth."

Treasury Secretary Tim Geithner, who first warned of the problem back in January, says the situation is getting urgent.

"It's taken us seven months to get to the place where we are now," Geithner tells CNN. "We're almost out of runway."

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