Our president is proudly, willfully ignorant of economics at even the most basic level.
President Obama’s self-congratulatory “economic recovery” is way too little, way too late. By historical standards for the American economy, we should be in the second year now of a booming economic recovery. Instead the economy is still struggling to get off the ground, and what is booming instead is prices and inflation.
If you listen to what President Obama is saying in his reelection campaign, which is already underway in his town hall tour across America, the reason for this is clear. President Obama does not understand the basics of economics. What he says repeatedly is that increased government spending is the foundation of economic recovery and growth. But the economic reality is that incentives for increased production are the foundation for recovery and booming growth.
As a result, what we are witnessing is a historical reenactment of the 1970s, if not the 1930s, with the same throwback economic policies that caused the dismal economic downward spiral of those years. But this is not all that President Obama doesn’t understand. He also doesn’t understand the budget, taxes, business, the energy and oil markets, and even health care.
Consequently, the American people will continue to suffer high unemployment, rising inflation, soaring gas prices, falling real wages and incomes, record poverty, and ultimately worse. That is until this tragically unqualified President who has spent his entire life cloistered in the fever swamps of the far left is replaced by new leadership that will restore the American Dream.
On April 20, President Obama took his reelection campaign to a town hall at the corporate headquarters of Facebook in Palo Alto. Facebook founder Mark Zuckerberg began with a question on the budget, asking “what specifically do you think we can cut…?”
Obama responded by saying first let me explain why the problem is Bush’s fault. (Get the transcript if you don’t believe me.) This from the President whose own 2012 budget projects that after just one term of office he will have run up more national debt in four years than all prior Presidents combined, from George Washington to George Bush. A President who in that same budget proposed a fourth straight budget deficit of over a trillion dollars, including a record deficit for this year of $1,645 billion, when the highest previously in American history was $458 billion.
If President Obama didn’t want those deficits, he could have proposed spending cuts 2 years ago. Instead he enacted an utterly failed, trillion dollar, government spending stimulus package. And despite his misdirection rhetoric, he continues to oppose any serious spending cuts to this day. The real cause of the record deficits and debt is that President Obama increased federal spending by 28% in his first two years alone. And in his 2012 budget he proposed to increase federal spending by another 57% by 2021.
Professor Obama told the Facebook audience that the deficits arose because “we had a massive tax cut that wasn’t offset by cuts in spending.” But from 2001 when the first round of the Bush tax cuts were adopted until 2007, federal revenues increased by almost 30%. From 2003 when the Bush tax cuts were completed until 2007, federal revenues soared by 44%.
Obama’s excuse for his runaway spending is that it was necessary to counter the recession. So he is both blaming Bush for the deficits and taking credit for them in promoting recovery. At the Facebook town hall, Obama further advanced his theory that government spending is the foundation for economic growth and recovery, saying, “If all we’re doing is spending cuts and we’re not discriminating about it, if we’re using a machete rather than a scalpel and we’re cutting things that create jobs, then the deficit could actually get worse because we could slip back into a recession.”
But it is obvious to everyone but Obama and his hypnotized true believers, party apologists, and bought and paid for special interests that his government spending has failed to produce a timely and robust recovery. That is because President Obama’s Keynesian theory that increased government spending and deficits promote economic recovery and growth was proven fully and finally wrong to everyone who was awake over 30 years ago.
President Obama persisted at the Facebook town hall, however, explaining that his spending spree will promote recovery and growth because then “we can still…invest in high speed rail” and, “We can still invest in something called ARPA-E, which is like DARPA except just focused on energy, so that we can figure out what are the next breakthrough technologies that can help to reduce our reliance on fossil fuels.”
Spoken like a true central planning neo-socialist, for it is not the government’s role, nor does the government even have the capability, to figure out what the next breakthrough technology is to reduce our reliance on fossil fuels. America has always enjoyed the world’s highest standard of living precisely because we leave decisions like that to the competitive marketplace, not government bureaucrats. And no we are not going to create a booming recovery by wasting still more tens of billions of taxpayer funds on “high speed rail,” which is a souped-up version of the mass transit boondoggles that have long proven so adept at wasting taxpayer funds without advancing any economic growth.
President Obama then thoroughly mischaracterized the differences between him and House Budget Committee Chairman Paul Ryan over the budget and taxes. Obama told the Facebook audience, “So what his budget proposal does is not only hold income tax flat, he actually wants to further reduce taxes for the wealthy, further reduce taxes for corporations, not pay for those, and in order to make the numbers work, cut 70 percent of our clean energy budget, cut 25 percent out of our education budget, cut transportation budgets by a third.”
There he goes again with his idea that increased government spending on “clean energy” would enhance economic growth. But saddling the economy with high cost, unreliable energy, and burdening it with an entire energy industry that can survive only on corporate welfare, is only going to tank the economy rather than promote recovery and growth.
A man of faith in a godless age is hitting Americans where it hurts.
Mr. and Mrs. American Spectator Reader, let P.J. O’Rourke talk sense to your kids.
In Britain, defending your property can get you life.
The debacle of this president’s administration is both a cause and a symptom of the decline of American values. Unless Congress impeaches him, that decline will go on unchecked. An eminent jurist surveys the damage and assesses the chances for the recovery of our culture.
It won’t take long for conservatives to scratch this presidential wannabe off their 2008 scorecard.
The American Christmas, like the songs that celebrate it, makes room for everybody under the rainbow. Is that why so many people seem to be hostile to it?
Was the President done in by the economy, or by the politics of the economy?