The PJ Tatler

Economically Challenged

The State of the Union has come and gone. It was the same old progressive drivel the president has been articulating since 2008.  Ezra Klein of the Washington Post’s WonkBlog called it an “ambitious agenda.”

Imagine, for a moment, that President Obama managed to pass every policy he proposed tonight. Within a couple of years, every four-year-old would have access to preschool. The federal minimum wage would be at $9 — higher than it’s been, after adjusting for inflation, since 1981. There’d be a cap-and-trade program limiting our carbon emissions and a vast infrastructure investment to upgrade our roads and bridges. Taxes would be higher, guns would be harder to come by, and undocumented immigrants would have a path to citizenship. America would be a noticeably different country.

Well, Obama’s presidency has already changed the country for the worse.  We have a new trillion dollar health care entitlement that will – admittedly –  become a permanent part of our socioeconomic fabric.  It seems history was against us on this one.  Republican Alf Landon ran against Social Security in 1936, but got pummeled by FDR.  Social Security was here to stay.

What’s so frustrating about Obama is that he’s transformative and soporific all in one.  He animated the youth, got them excited about politics, and mobilized them to be his army for change.  Sadly, he’s about to screw them over with Obamacare, just as he screwed women over by not picking any to serve in his inner circle.  Yet, he’s as boring as any liberal you would come across in everyday life.  He likes big government, thinks the expansion – or multiplicity – of social programs are good, and loves high taxes. He’s the same cookie cutter liberal politician who chooses the slices of the electorate he needs to win, and discards the rest.  If he isn’t a bizarre mix of soporific and transformative, he definitely pulls off being Machiavelli and Lincoln without anyone noticing.

Investors Business Daily posted an editorial on February 12 noting the gross inaccuracies about the president’s plan to reduce the debt and deficit – or lack thereof.

President Obama now says the deficit problem is all but fixed, so we can stop all this unpleasant talk about spending cuts and get on with government spending. Maybe this is good politics, but it’s reckless policy. In the run-up to his State of the Union speech, Obama was running around telling everyone how we’ve already “cut our deficit by more than $2.5 trillion,” and are now “more than halfway towards the $4 trillion in deficit reduction that economists . .. say we need to stabilize our debt.” Clearly Obama wants all the dreary talk of deficits off the table. That way he can attack Republicans who try to impose deeper spending cuts, and push for more federal “investments” to help grow the economy.

But there are just two problems with Obama’s claim. First, despite what Obama says, the debt crisis is nowhere near fixed — as anyone who’s looked at the report from Obama’s own debt commission would know.

That report opened with this stark statement: “Our nation is on an unsustainable fiscal path.” Left unchecked, it said, the rising debt “will put America at risk,” and that “continued inaction is not a viable option.” The panel also made it clear that stabilizing the debt would require a huge, long-term commitment to spending restraint at every level of government, as well as an overhaul of out-of-control entitlement programs.

When the commission filed its report in 2010, the national debt was $9 trillion, or about 63% of the nation’s GDP. The national debt today is over $12 trillion, and has already surpassed 76% of GDP. Had the debt commission’s plan been adopted, the deficit this year would be $646 billion, and on its way down to $279 billion by 2020. And the debt would be holding steady at about 65% of GDP.

Instead, this year’s deficit will be $845 billion — even after the alleged $2.5 trillion in savings that Obama touts — and will start climbing again in three years, reaching back up to $1 trillion by 2023, according to the latest forecast from the Congressional Budget Office. The national debt, meanwhile, never drops below 73% of GDP, according to the CBO, and starts climbing after 2018, reaching 77% of GDP by 2023.

However, as Investors indicated, these projections are based on the assumption that we’re not going into another recession in the near future, and Obamacare’s costs are controlled.

On jobs, the irony was palpable.  He creates a Jobs Council, which hadn’t met in over a year, and was dissolved last month.  Reportedly, Obama was unhappy with the council’s recommendations to relax regulations, instead of offering new ones.  Jennifer Rubin of the Washington Post wrote last night that:

…he [Obama] insisted, “ to attract more jobs to our shores” and “equip our people with the skills needed to do those jobs.” At least he was candid that it was recycled. (“A year and a half ago, I put forward an American Jobs Act that independent economists said would create more than one million new jobs.”)

Rather than encourage energy development, he launched into a job killing climate change initiative, something which a Democratic House and Democratic Senate refused to pass in the first term. This is another non-starter, merely a bone thrown to the left. It has nothing to do with growing the economy and creating jobs; quite the opposite. And if that were not enough, he proposed to hike minimum wage, an idea his onetime economic adviser Larry Summers rightly labeled as a job killer. This is a president with no clue how to encourage the private sector. As for the one move that actually would create jobs, he was silent on approval of the Keystone pipeline.

Despite his promise to make sure any “additional proposals that are fully paid” and that he wanted only “smarter government” his proposals all consisted of new expansions of government and new spending. A new energy fund! Universal pre-school! More college loans! Redesigned high schools! Manufacturing hubs!

There was nothing he wanted to cut, eliminate or send to the states.

On entitlements, like Medicare, which has a $40 trillion dollar unfunded liability, the president suggested means-testing it (again).  Although, Philip Klein at the Washington Examiner wrote that Medicare is already a “heavily means-tested” program.

So, though there may be some savings to be had by further means-testing of premiums, given that the program is already heavily means-tested, the savings would be nowhere near what’s needed to make the program sustainable over the long haul.

So, he proposes policies that’ll kill jobs, stunt economic growth, and drive up our deficit.  Obama was adamant that we need to invest in the best ideas for innovation and our economic future.  The best way to do that is for government to get out of the way.  Allow entrepreneurs to breathe, and gut Dodd-Frank since that’s the reason most Americans can’t refinance their homes.

The job for conservatives is to convince Americans that Obama runs our economy, the way Col. Klink runs Stalag 13.