OBAMA FLUNKS HIS OWN TEST
In 2009, President Obama promised that he would cut the deficit in half by the end of his first term. Instead, he has added over a half again to the deficit. Having accurately described George W. Bush’s management of the budget as a disgrace, his own management, by comparison, must now be described as an abomination, even worse than George W’s.
This past week, the Bureau of Economic Analysis announced that the Gross Domestic Product through the third quarter of 2011 was $15.17 trillion. The national debt now tops (with the President’s impending call for yet another increase in the debt ceiling) $15.23 trillion. In short, the national debt exceeds the GDP. Economists have frequently described that point as one of the strongest indicators of impending economic collapse. On the way to economic oblivion, we have just crossed the Rubicon.
The GDP to debt comparison does not take into account the $62 trillion in entitlement commitments of the nation. Truth be told, the United States Congress mortgaged America’s future long ago. The magnitude of the crisis is just now becoming unmistakably clear, however, for almost all Americans.
By every reasonable measure, the President—who came into office with an already abysmal $9 trillion national debt—has distinguished himself by the speed with which he has added $6 trillion to that tally. Far from exercising fiscal restraint and responsibility, Obama has opened the floodgates to spending in grandiose ways that vastly expand the size and scope of the government. The federal government today is the largest state in the Western world, the cost of which alone can absorb everything we produce every year far into the future. With each movement of this government comes a new cost and a new foothold that, itself, compels a future expenditure of funds.
By Obama’s own admission, there has been no more important problem for his administration to tackle than the dire economy. It was Obama’s job one. By every measure, he has not only failed to resolve that problem, he has exacerbated it—taking America from a dire situation to one now so critical that economic implosion, comparable to that facing Greece, is, absent drastic cuts in spending undertaken immediately, a few short years away. There is no EU bail-out possible for a bankrupt United States, and creditor countries like China will be loath to give more in what will appear to be a dead end investment. If we do not put our fiscal house in order, America’s creditor nations will exercise their economic advantage to make the American president a captive of their desires. We face the very real prospect of a blackmail scenario in our future, coming from one or more major U.S. creditor nation.
Obama appears helpless against the mounting odds against the nation. He is caught in a political vice grip created by his own inability to lead decisively. On the one hand, his party faithful expect him to keep alive all of the grandiose, costly federal programs that define the welfare state. On the other hand, the reality of all consuming debt has reached Main Street and is giving the typical American the jitters. Far from leading Americans to harbor a sense of confidence in his abilities and vision and a sense of optimism about the future, he has caused Americans to experience a profound sense of distrust in his presidency and zero faith that he even has a coherent vision. There is pervasive pessimism about the future of America, to which Obama has added over the last three years.
To achieve re-election, Obama must do something quite uncharacteristic of him. He has to translate his bold rhetoric into realistic achievements that alter the basic frame of reference Americans now have. Having failed to keep his promises, Obama cannot offer platitudes about a better tomorrow and be believed. He has to convince Americans that he is a new man, not the one who spent the last three years failing to keep essential promises and doing precious little beyond massively aggravating the debt crisis. He has to convince them that he understands the folly of his prior course, rejects that course, and is undertaking specific new initiatives calculated to so reduce the debt as to ensure a national apotheosis. That requires specific, bold actions. He has never been so bold. He has been particularly indecisive in confronting our economic nightmare. He has refused to let the titans of Wall Street responsible for the subprime mortgage crisis suffer the fate of economic destruction that the market would have imposed on them and prosecution for the fraud they perpetrated, choosing instead to fully embrace the “too big to fail” folly of government bail-outs. He has refused to deregulate meaningfully to allow the economy to be reborn, choosing instead to populate agencies with aggressive regulators who have added considerably to the stultifying web of regulation debilitating the economy. He has refused to propose serious changes to entitlements to cut federal spending and, instead, has lamely promised that entitlements will be kept intact. He has done nothing that reveals great courage.
If history is our guide, President Obama’s forthcoming budget will include more fence straddling. He will not move in the direction of budget cuts serious enough to save the nation from drowning in debt. He will stoke the flames of class conflict by arguing for greater taxes on the wealthy, albeit the amount raised from even significant tax increases on the wealthy will do little to reduce the cost of an ever expanding government but will do much to increase unemployment and suppress business innovation and expansion.
Whoever he faces in the general election will have a treasure trove of economic data to prove the utter failure of Obama’s presidency. Pressing the economic numbers, the reality of our dire circumstances, and the utter failure of this President to offer any real solutions will receive much popular acceptance. But the voters will rightfully expect more from Obama’s opponent. They will demand a clear plan for restoring the country to fiscal soundness and economic opportunity. Any strong, resolute, and clear plan that can work to reduce dramatically the cost of the government without depending on any tax increases will receive much popular support.
Americans appreciate that they are in a crisis of extraordinary proportions. This is not the time for a smiling face, a promise of a few new government programs, and a hope for tax increases to help pay a small portion of the burgeoning debt. This is the time for a strong leader to explain in detail a roadmap to economic recovery and to promise that if we accept the need to cut the government down in size and scope the America to come will be one of great economic prosperity, dependent on a newly freed private sector. The trust that Obama places in his economic planners needs to be contrasted with the trust his opponent places in the free will and enterprise of the American people.
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If Obama continues to fail to inspire confidence and appears as weak and indecisive during the general election campaign as he now does, voters will be anxious to send him packing. His opponent must seize the initiative by exuding that strength and decisiveness Obama lacks. His opponent must also demonstrate the courage Obama lacks, a willingness to present a clear, detailed plan to eliminate the debt and free the market, and a resolute defense of that plan and vision for a free and prosperous America against all of the media and political pundit naysayers. To Obama’s Neville Chamberlain, we sorely need a Winston Churchill.
© 2012 Jonathan W. Emord - All Rights Reserved