Tag Archives: deficit

What Comes After Trillion?

In recent weeks and in an effort to curb growing outrage and voter disaffection, President Obama has shown up everywhere, save  the guest judge chair on ‘American Idol’. From town halls to prayer breakfasts, on prompter and off, the President has been seen pimping his budget and defending his prescription for the U.S. economy, which is predictably focused on government, not business, creating jobs.

He’s also appeared a bit touchy in recent days. In his State of the Union, he denied that his healthcare plan is a result of some ‘Bolshevik plot,’ and sought to blunt nasty ‘communist’ or ‘socialist’ aspersions cast by those evil tea-partiers.  It’s easy to see why he’d want to avoid such labels, however true they might be. Forget economic output comparisons between old Europe and the United States over the last thirty years and just examine last week’s market reaction to Spain and Portugal’s budgetary crises. Spending and raising debt ceilings hasn’t helped their respective economies. Add Greece to that mix as they are trying to get spending under control. 

Obama has repeatedly pledged to restore fiscal discipline to Washington, yet his budget would more than double the current debt, increasing it to $26 trillion over the next decade. Forty cents on every dollar spent in the budget is borrowed. And while it would be nice if maybe our loan shark was Canada or Britain, China continues to invest in our debt. With each security sold or Wall St investment made, Beijing wields more influence and hinders further criticism of their monetary, trade, or human-rights policies.

What can Americans expect from these borrowed Chinese dollars? How will the President use this debt to catapult the U.S. economy into prosperity? 

His budget spells it out.

Under the ‘Reviving job creation and laying a foundation for economic growth’ section Obama outlines his recipe to grow jobs. ‘Investments’, spending, are programmed for education, clean energy and infrastructure to lay a foundation for long term job growth. He provides high-speed rail with $5 billion over five years, $1 billion in this year’s budget. Just how will hi-speed rail create jobs and sharpen America’s competitive edge?  

Adopting this particular European idea is folly on so many levels. European cities are much closer together and their highways are radically inferior; there just isn’t enough room for road expansion. Another reason for a viable European railway—weather. Many businessmen from Milan take the train to Turin or Venice to avoid fog which, in the winter, can create hours of delays. In addition, gas is more expensive. Choosing between spending 80€ to fill up your tank or 20$ to take a train, is a no-brainer. And when Europeans visit America, they rent cars; they don’t purchase Amtrak tickets.

In addition to the ‘I wanna be like Europe’ nonsense, the President fails to understand that multi-nationals aren’t flocking to China and India for their infrastructure; it’s their cheap labor and lower taxes. Cutting-edge is not a herd of cows meandering about the roadway unimpeded, it’s I-95 from Miami to New York.  

Another bedrock of the new Obamaconomy is clean energy. Not only does the new budget allow for $54.5 billion in ‘green’ loans, it encourages “new nuclear facilities and a range of renewable energy projects that reduce greenhouse gases and pollutants, while simultaneously creating jobs and contributing to long-term economic growth.” Energy efficiency is a critical component, but perhaps it would be better to fund those programs when the economy is on solid footing.

Another baffling mention in a growing economy subsection is the $1 billion Michelle Obama childhood obesity project. It would be altogether different if this $1 billion were to feed starving American children, but as it stands, we are going to be borrowing from the Chinese to better nourish overweight children. 

The budget also lays out plans to bring grocery stores and other ‘healthy’ food retailers to ‘food desert’ communities.

Where to start…Shouldn’t Publix or Whole Foods decide where to put their stores? And what exactly is a ‘food desert’ community? Inner cities? Maybe if bag boys weren’t scared to push Grandma Edith’s cart to her car, Whole Foods might consider the idea. Government doesn’t need to help businesses decide how to expand profits. That job falls to management and their expertise.

 As Americans watch their friends and family lose jobs with no end in sight, they see a President more interested in remaking the nation than strengthening the economy. Since their own wealth hasn’t been enhanced through second mortgages and house flippers, they aren’t apt to believe that borrowing from China will result in an economic renaissance.

 If fiscal conservatives don’t win in November and get a handle on these trillion dollar deficits, Americans better familiarize themselves with a new term—quadrillion.