No Debt or Deficit?
President Obama finally took the spotlight from the Republican debates with his third State of the Union address to the nation last night. Once again he proved that he is a master of the teleprompter and his Harvard delivery is intact.
Our often time ethereal president softened his political attacks for the moment and changed his rhetoric about the decline and fall of our empire. Seems his aides have finally figured out Jimmy Carter negativism does not help one get re-elected.
On the other hand, the vision he outlined for
was not real clear. One thing about politics and politicians, there is a fine line between working up a head of steam and being lost in a fog. On the surface they look almost the same but in truth they are opposites. It is often hard to determine which role Obama plays. America
As I predicted, his economic plan was based on the Buffett principle, not proven economic strategies or techniques. I was a little disappointed Obama had Warren Buffett's secretary in the President's box and not Warren Buffett himself but rumor has it he was busy playing his ukulele in China.
After three years in office and with little to say in terms of accomplishments on the issues of most concern to Americans, like protecting Social Security and Medicare, slashing the $15 trillion national debt, cutting the trillion dollar annual deficit, or reducing the high unemployment rate, one must embrace the ethereal to avoid the real.
There were no new or even old proposals to address any of these issues but he did offer an unusual assessment of how he had turned around all our economic problems in what must be some
secret code because I did not understand it. Obama said: Harvard Business School
"In the six months before I took office, we lost nearly four million jobs. And we lost another four million before our policies were in full effect.
Those are the facts. But so are these. In the last 22 months, businesses have created more than three million jobs."
Now I realize my handicap in being from the Midwest yet I still have not figured out how losing 8 million jobs as he said, then gaining 3 million jobs as he said, which leaves us 5 million short of where we started, is a sign we have recovered from our economic problems.
He also offered some curious proposal on how he would help the millions of people who are in housing foreclose because they could not afford what they bought because of fraud in the first place, or they lost their jobs. Some unfortunate folks have lived in homes up to two years or more without making payments.
Rather than help them move to homes they can afford, he wants Uncle Sugar to pay billions of dollars to keep them in the homes they can't afford. Well, that means those that have made their payments and met their obligations will have to fork over even more money to subsidize those living beyond their means.
I thought the people subsidizing those who lived beyond their means was a discussion of the difference between taxpayers and politicians like the president and congress. So I guess since we have done such a good job of subsidizing the runaway national debt of our politicians we now must pay off the mortgages for those who can't afford the homes to begin with. I think these are the types of proposals that cause polarization.
One thing did change in his speech. He used to define the rich at first as those making $200,000 a year, then $250,000 a year, then $1 million a year, and now it is not clear if he says the enemy are millionaires or billionaires. We only know it is not Warren Buffett's secretary.
The fuzzy math of the White House policy was apparent also in terms of defense spending and cuts. In his speech he said:
"That's why, working with our military leaders, I have proposed a new defense strategy that ensures we maintain the finest military in the world, while saving nearly half a trillion dollars in our budget."
And he said:
"Take the money we're no longer spending at war, use half of it to pay down our debt, and use the rest to do some nation-building right here at home."
Now that sounds great but does it really mean what he said? The failure of Congress to pass any kind of deficit reduction plan last November automatically triggered a forced budget reduction calling for cutting $1.2 trillion over the next ten years, 2013 through 2022. Of that, about $492 billion must come from the defense department.
Wait, Obama said he and his generals worked out a half a trillion dollars in defense savings. What he forgot to say was he had no choice. The failure of congress and the president to pass a budget or address the deficit and debt automatically triggered the cuts, no matter what Obama and the generals had to say about it.
That is not all. The Obama deficit is now running over $1.3 trillion a year. Our total defense budget is about $1 trillion a year. Does that mean we are cutting 50% of our defense budget to lower the deficit, as he seems to suggest in the speech, without sacrificing our defense capability? That would be great but is not true.
The half a trillion in defense cuts he proudly exclaimed are over ten years, not one. That means a cut of $50 billion a year in defense, not half a trillion. But even that is based on a foundation of quicksand. What it really means is the government will reduce future increases in defense spending by $50 billion a year so our actual defense budget will go up while we are cutting half a trillion dollars.
Remember, he also said half of the cuts will go to reduce the deficit. That means $25 billion a year will go to deficit or budget reductions. Our annual deficit is now $1.3 trillion. It does not even make a small dent in the annual deficit. More than that, we still have the national debt of $15 trillion. Did he forget what got us into this mess in the first place?
If that is modern math Pythagoras would be turning over in his grave and declaring it is time for an end to the American Empire because we are so caught up in our falsehoods, misrepresentations and distortions we can no longer tell the difference between having a head of steam or being lost in the fog.
Will someone out there please help the people strengthen Social Security and Medicare, reduce the national debt, cut the annual budget deficit, get people back to work, and then get out of our lives thank you very much.