If you closed your eyes during the State of the Union address (and you allowed for the difference in voices), much of it could have been the words of Ronald Reagan. Gone was Mr. Obama’s usually peevish tone, replaced by upbeat, can-do, let’s-win-the-future words and tone.
The purpose of this was to charm independent voters. Apparently it did, according to early polls. His “favorable” rating went up. Will the charm extend to policies that promote real economic growth? Unless you ignore his lifelong training, education and actions in three public offices, don’t count on it. For him, the government is the only engine of growth and the only institution to be trusted.
Despite paeans to capitalism and individual freedom, his remarks, at the core, were for more government spending. He spoke, of making “investments” in education, infrastructure and that old chestnut, “green energy jobs.”
Investments require capital. The federal government does not have any capital. Anything it spends must be paid for in one of three ways: (1) taxes; (2) borrowing (China comes to mind as a lender) or (3) printing more money (which leads to inflation). Despite his insistence, the spending he has in mind cannot be called investments, though he will doubtless continue to describe it that way. It is, in fact, an extension of his reviled “stimulus” program. (Remember the “Shovel-ready” projects that he later admitted never existed?)
He called for a five-year “freeze” on discretionary domestic spending. This category affects only 16 percent of federal spending. His grand claim is to “save” $400 billion over 10 years. “Freezing” any spending saves exactly nothing. His “savings” are as illusory as those promised under Obamacare.
The day after the speech, the Congressional Budget Office released a new report projecting that the national debt would rise to nearly $15 trillion by the September close of the current fiscal year. The president was 80 percent of the way into his speech before he mentioned, in passing, the fact that we have a serious national debt problem. Interest on that debt soaks up 40 cents of every federal dollar spent (there’s China again).
He glossed over the two 800-pound gorillas in the room, Social Security and Medicare, which are rapidly moving toward bankruptcy. He used his familiar straw-man device. He said any reform must not touch benefits for those retired or especially vulnerable — as if anyone had done that.
Ignored completely were the findings — many of them bracing — of his own Deficit Reduction Commission, as if it had never existed.
Obama may continue to add the gloss of happy talk to his stump speeches, but they will remain, like this one, speeches dedicated to selling ever bigger government solutions to problems which require less spending, debt reduction, pro-growth tax policies and smaller government.