February 25th 2009
Promises, Promises
“T
here is, of course, another responsibility we have to our children,” intoned the Prez last night in what I guess was a warm-up to his State of the Union speech. “And that is the responsibility to ensure that we do not pass on to them a debt they cannot pay.”
Elsewhere in the speech, he worried that “schools … aren’t preparing our children and the mountain of debt they stand to inherit,” which sounds to me like he thinks there is going to be a massive debt on our kids that they’re going to have a bunch of trouble dealing with, so shame on the speechwriters for letting a little honesty into this “promises, promises” speech.
In any case, I thought it would be instructive to break the speech down into a simple analysis of how much of Obama’s commitment is to spending and how much is to paying for that spending. He outlined the following spending plans in the speech:
- Help with college tuition, including a $2,500 tax credit
- Extending unemployment benefits
- Extending health insurance benefits
- Establishing a new lending fund (Yes it presumably pays back – unless there’s a future bail-out – but that’s later. Now it’s just spending.)
- Housing/mortgage program
- Double renewable energy
- Energy research funding
- Thousands of miles of power lines (good luck getting the Greenies to not fight them!)
- Energy efficiency programs
- $15 billion for alternative fuels
- Auto company bail-out
- Bank bail-out
- Expanded health insurance for children (SCHIP)
- Electronic health records
- “Downpayment” on health care reform
- Expanded childhood education
- Money to stop teacher layoffs
- Incentives for teachers to perform (isn’t that called either “a paycheck” or “pride?”)
- Rewards for teacher success
- New programs for high schools
- More support for charter schools
Against this list of 21 spending programs, Obama spoke generally of $2 trillion in identified cuts over the next decade ($200 billion a year … unfortunately, a pittance), and identified just six specific areas to be cut:
- Education programs that don’t work (to be more than offset by the cost of new education programs that we’ll find later didn’t work either)
- End direct payments to agribusiness
- End Iraq no-bid contracts (not really many savings here, since presumably DOD won’t be issuing new contracts with the August 2010 pull-out)
- End Cold War weapons programs
- Stop Medicare waste and fraud (while increasing Medicare funding)
- End the Iraq war
To pay for all this while honoring the responsibility to ensure that we do not pass on to our children a debt they cannot pay, Obama identified three new funding sources:
- A carbon pollution cap program
- Ending tax breaks to companies that ship their jobs overseas (thereby ensuring the demise of global competitiveness for American businesses)
- Increasing taxes on the wealthiest two percent of Americans.
These tax increases will be offset by tax cuts for 95 percent of Americans – everyone making less than $250,000. Just one question here: If 95 percent get tax cuts and the top two percent get tax increases … what about the lost three percent between them? What happens to them?
Somehow, these numbers just don’t add up and I fear greatly for our children and grandchildren, who will have to struggle against a hugely dysfunctional federal government that is sucking in money like a governmental black hole.
As for the road to socialism, here’s what Obama said about banks:
And when we learn that a major bank has serious problems, we will hold accountable those responsible, force the necessary adjustments, provide the support to clean up their balance sheets, and assure the continuity of a strong, viable institution that can serve our people and our economy.
“Hold accountable” – does that mean it will become a federal crime to lose money, while the feds are forcing you to once again loosen your lending policies? And while they’re losing money hand over fist? “Force” – we know what that means: The fiscal incompetents in DC are going to tell bankers how to manage their finances. “Provide the Support,” as in “we’re from the federal government and we’re here to help you.” God save us.
Finally, let’s visit the president’s sheer lunacy. Speaking of clean energy, he said,
And yet, it is China that has launched the largest effort in history to make their economy energy efficient.
Really? It is the Chinese who refuse international pressure to clean up their energy and their atmosphere, creating smog that not only destroys the health of the Chinese people, but also impacts global air quality:
My suspicions are confirmed: He’s just making all this stuff up.
Posted in Economic Policy, Obama | 5 Comments » | |
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Comments
February 25th, 2009 at 9:01 am
Great commentary, Laer. All I could think of while Obama spoke last night is that he’s such a blatant liar. All this concern about passing on debt after pushing and rushing the largest expansion of government spending in history?! It’s absurd! Thank goodness his ridiculousness has finally pushed a hefty chunk of people out of complacency to fight against Prez O.There’s a “Chicago Tea Party” protest Friday morning in San Diego – wish I could join in the fight, but I have a client meeting. Spread the word, though! http://www.officialchicagoteaparty.com/
February 25th, 2009 at 11:45 am
I watched in horror last night with my 84 year old grandfather visiting from Indiana. Veteran. Farmer. Small town physician. Saved his whole life and now enjoys the role of retired millionaire. He watched and listened intently and then said, “What – does this guy think he’s Jesus or something?” Then, he said this. “Look, I lived through the depression and you would have thought we’d learn from history. What an idiot!”
February 25th, 2009 at 1:01 pm
Wow, those Bush tax cuts sure worked. And what about that free market solution to our failing economy? 70 percent of Americans support this president and believe he will lead us out of this financial and economic mess he inheireted from President Bush.As for history’s sake, even Abraham Lincoln believed when the fre markets fail, it was the duty of government to respond.
February 25th, 2009 at 5:17 pm
I hate to say it, Dan, but you’re believing polls and you KNOW how manipulatable polls are (especially those run by MSN outlets). I hope you’re right, but I have a sick feeling that you’re dead wrong and your “70 percent of Americans” are going to be dreadfully disappointed.
You seem to forget that Bush inherited a recession from Clinton (along with the ticking Fannie/Freddy time bomb he got from Carter), and the tax cuts lifted us out of that and into a period of prosperity. They also worked great for JFK, who I suppose you count as one of yours.
The free market solution to the failing economy is to let banks that screwed up fail. Banks that didn’t screw up and entrepreneurs will quickly fill the void. Let auto makers that can’t survive fail. Those that can will pick up extra sales and be strengthend, hiring some of the skilled workers from the failed enterprises. Government can incentivize with tax breaks and research dollars, but its role should go no further. Of course, if you prefer socialism, you can go the Obama route and start having the government own the tools of finance and production.
February 25th, 2009 at 6:22 pm
Well, if energy efficiency is the Gold Standard measure, watch me lop the catalytic converter off my truck. It will be 8% more energy effecient in a Beijing minute.