Wednesday, January 27, 2010

Economic Alchemy

Obama is trying to move back to the center on his message --- it's jobs, the economy, and kitchen table issues. Don't be surprised if Obama's State of the Union speech is a re-load of his campaign rhetoric, "blame Bush." Bush and the Republicans did have some blame for the situation. By 2008 the Federal debt grew to $5.8 trillion and Democrats pointed out that we had entered a period of unparalleled fiscal recklessness. In 2006 the Democrats took control of the House of Representatives and the Senate. In 2008 the Democrats took control of the White House and had super majorities in both the House and the Senate. Instead of combating the debt with the principles of fiscal responsibility, the Democrats went on a borrowing binge and added another trillion dollars to the debt. The logic was to stimulate the economy, create jobs, and fund a new, semi-nationalized health care system. None of this worked because the economy is not stimulated by increasing debt; private sector jobs are not created when new taxes are required to pay for public stimulus money, and the health reform bill is a nightmare scenario of a slippery slope to a nationalized health care system with rationing and price control. None of these scenarios created consumer confidence, and as a result, Obama's party lost Gubernatorial races in Virginia, New Jersey, and a special election in Massachusetts to replace Ted Kennedy.
The Congressional Budget Office has also reported that the outlook of all this spending is no better. And keep in mind, that Congress, by law, directs the CBO to calculate these projections in a vacuum ignoring several real world factors. CBO estimates that by 2020 $16.3 trillion will be added to the national debt. That's another $130,000 to each tax paying house hold on top of the already huge tax burden that Americans owe over the course of their lives.
In response to the national outrage on out of control spending, Obama has chosen to plagiarise John McCain's idea on a government spending freeze. An idea that he sneered at a mere 14 months ago. Obama, like many liberals, is convinced that more spending and more taxes will lead to a stabilizing effect of the middle class. This is not the case. Obama came into power preaching spending and his party will continue to do so. Discussions of passing health reform are not over and the coming shortfalls in medicare, medicaid, and social security have not been met with any other answer except, raise taxes. We do need change in Washington, and that is a change in philosophy. Government is not the best choice to getting our economy moving again. In fact, it is probably the worst.

No comments:

Post a Comment