I know, I’m a little late to the Obama budget speech bashing party. Suffice it to say that yesterday’s speech was one of the most pedantic and uninspiring Presidential performances in recent memory. Not even the Vice President could stay awake through its entirety.
I’m a pretty straightforward and practical person. I enjoy debate, but I have a very low tolerance for hyperpartisan rhetoric, political shibboleths, and weaselly snake oil sales pitches. I prefer to deal objectively with facts. So it is with a great deal of apprehension that I look toward the upcoming Congressional fiscal battles. I’m willing to bet that over the upcoming weeks and months, very few people in Washington DC will have the guts to seriously discuss what I see to be an increasing number of negative economic trends:
- Real inflation in the cost of consumable goods, primarily food and gasoline (and consequently transportation, which will eventually affect the cost of pretty much everything else) is on the rise. If you calculate inflation in the cost of consumable goods using the same methodologies in place during the Carter years, real inflation right now is nearly 10%.
- Government policies are trending toward limiting domestic fossil fuel exploration and extraction, and toward tougher emissions and pollution requirements for fossil fuel refining facilities and industrial facilities that burn a large amount of fossil fuels, such as electrical power plants. Both of these trends will necessarily result in higher energy costs.
- There is a significant overall decrease in the size of America’s private work force. And unemployment is now disproportionately affecting middle-age men and young people under the age of 25.
- Many workers (particularly public employees) are opting for early retirement, thus putting an extra financial strain on Social Security, Medicare, and state pension systems. This is on top of the extra strain that will be placed on these systems as a result of high unemployment and the collapse of the stock and real estate markets, and the corresponding massive loss of private wealth (approximately $17.5 trillion, the equivalent of over one year of GDP) that these situations have created.
- Today, almost twice as many people, nationwide, work for the government as work for all manufacturing sectors combined. And this ratio is growing, not shrinking.
- Government spending, as a percentage of annual GDP, has skyrocketed from a long-time average of 19% to 20%, to over 25% in the last two years.
- The total net worth of the “Forbes 400” was approximately $1.3 trillion in 2009, which is less than our current annual Federal budget deficit. In 2007 (the most current year for which data is available) the richest 1% of Americans owned 33.8% of the nation’s total privately-held wealth, which was estimated to be $54.2 trillion in 2009. Doing the math, the “richest 1%” of Americans currently hold approximately $18.3 trillion, an amount roughly equal to our projected national debt in 2014.
Folks, this is where we are right now. Pretty ugly isn’t it? There is no way we can pay down our debt or balance the Federal budget by taking more money from “the rich” — they simply don’t have enough. And the wealth creating sectors of our economy are stagnant, if not shrinking.
Yet progressive socialists like President Obama see this situation as the perfect opportunity for even more government control. They argue that if the government would have had tighter control of the economy and more power to oversee the fair distribution of wealth, then there would never have been a “great recession” in the first place. Bigger, benevolent government is always the solution, its methods and motives beyond reproach. Its expansion must be allowed to continue, even if the bureaucrats who plan its growth have absolutely no clue about how to stoke the almost magical levels of economic recovery necessary to generate the money to pay for it all.
Unfortunately, regardless of how big anyone’s dreams for justice and
equality may be, they are still subject to reality and its supreme
constraint — the price tag.
President Obama and the Democrats have put us on a path that is financially unsustainable. A majority of the American people now know this. And I think that deep down, a significant number of people within his Administration know it too.
The real question is, what are we going to do about it?