The real State of the Union

The national debt, now stands at $12,300,000,000,000 and change, and it’s growing by the second.  That’s about $40,000 for every American.  More important, it represents $113,000 for each and every taxpayer.

The federal deficit in 2009, the amount we added to the nation’s credit card, was a record $1.4 trillion, which was our largest, as a share of our Gross Domestic Product, since the end of World War II.

The Congressional Budget Office predicts the deficit for 2010 will be $1.35 trillion and drop to $980 billion in 2011, which is based on the assumption that the Bush tax cuts, which ended the last recession, will be allowed to expire.  In other words, taxes will be raised on almost everyone.

When this happens, it, most certainly, will have a depressing effect on the overall economy and will discourage job creation.

Nevertheless, based on the current numbers, the CBO is predicting that economic growth this year will be an anemic 2 percent with  unemployment remaining in the 10.1 percent rage, easing slightly to 9.5 percent the following year.  Loosely translated:  more pain; little gain.

In his State of the Union speech last night,  President Obama proposed a three-year freeze on domestic agency budgets.  Bear in mind, this is after the 10 percent raise he gave them this year.   It’s like shutting the door just after you’ve raided the refrigerator.

It is also important to understand that this freeze only affects the $477 billion of discretionary spending that must be approved by Congress each and every year.  In reality, it represents only a tiny portion of the federal budget because Congress routinely creates “entitlements” for the things members consider to be important.

Now, when “we the people” hear the word “entitlement,” we immediately think about Social Security and Medicare, programs that we have paid into and we feel  “entitled” to have returned.  Nothing could be further from the truth.  Although Social Security and Medicare are two of the largest entitlements, most entitlements simply represent the whims of the various members of Congress.  New entitlement programs are set up each and every year.  They are like individual spaceships that are put on automatic pilot and launched into the spending stratosphere.

The proposed freeze by President Obama is tantamount to taking a teaspoon of water out of the Atlantic Ocean.  CBO Director Douglas Elmendorf put it this way.

“U.S. fiscal policy is on an unsustainable path to an extent that cannot be solved by minor tinkering.”

Under current law, if everything remains the same, the CBO’s new estimate states that the Treasury will need to borrow another $6 trillion between 2011 and 2020, and, believe it or not, that’s the really good news.  Once the baseline is scrubbed of several unrealistic assumptions that Congress demands CBO use, the deficit returns to $1.4 trillion in 2010 and balloons to $1.9 trillion by 2020.   Brian Riedl of the Heritage Foundation ran the numbers for us and came up with another $7 trillion in debt over the next decade or an additional  $13 trillion in new red ink.

Last night, in his report to Congress, Obama threw out a few fig leafs to the middle class, promising easier repayment terms for student loans,  tax credits for families who pay for day care or care for elderly relatives and, of course, more government programs to create jobs, jobs, jobs.

Meanwhile, the public seems to understand that the first $787 billion stimulus resulted in a net job loss and most of the jobs that were saved or created were government jobs.   Bigger government will not save us, never has and never will.

Last night, Obama accepted responsibility for failing to deliver swiftly on some of the changes he promised a year ago, but he never admitted that his priorities are out of step with the nation’s and have been counterproductive.   For starters, the president needs a new cabinet, one with a lot of real-world private sector business experience.

Despite all the lofty rhetoric we just heard from the president, Barack Obama is viewed as a weak leader here and abroad.   On Tuesday, the Democrat-controlled Senate voted down his proposal to create a bipartisan commission to reign in those out of control entitlement programs, even though the measure had more than enough Republicans on board to break a filibuster and get down to the question.

Internationally, the president had little success with his “apology tour.”   However, the American people are forgiving.  He could get the country back on the right track and save his presidency if he simply could admit he has been wrong and apologize to the people here at home.

8 thoughts on “The real State of the Union

  1. Ummm…I think you may need to clarify some things:

    “Most entitlements simply represent the whims of the various members of Congress. New entitlement programs are set up each and every year.”

    Name some of these entitlement programs, and show me how cutting those would affect the deficit, when more than 60% of all federal spending is Medicare/Medicaid, Social Security, and Defense.

    “Meanwhile, the public seems to understand that the first $787 billion stimulus resulted in a net job lost and most of the jobs that were saved or created were government jobs.”

    Not quite. The CBO estimated the stimulus saved/created nearly 2 million jobs. There was a net loss, but that net loss would have been 2 MILLION higher if there hadn’t been a stimulus package. The conservative American Enterprise Institute also supports the results of the stimulus package, saying it was necessary to prevent unemployment of 15% or more.

    “Internationally, the president had little success with his ‘apology tour.'”

    Do you have any facts/figures to back that up? Last time I checked his international engagements boosted world public perception of America by double digits in most countries, especially in the Arab world. Add to that the fact the US is on the verge of signing a nuclear treaty with Russia that will be the 21st century equivalent of Reagan’s START treaty, along with the fact he has ordered the killing/capture of more Al Qaeda HVIs than in the preceeding 2 years and expanded the war effort to include strikes against the Pakistani Taliban, Haqqani Network, and AQAP.

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  2. Our president only made a passing reference to the real problem(s) we are facing as a nation when he said the American people have been suffering for not just one year, but for 10 years.

    Let me think for just a minute…. Who was the President for most of those 10 years that caused all of our problems???? (I’ll give you a clue. His middle initial is W.)

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  3. Great writing! cycles run thru economies and are quite predictable. the roaring 20s, lead to a depression, the roaring 80s and 90s will also lead to a greater depression. this has been the case since shortly after jerico(8000bc). obama just delayed our next depression by about 6mos. this country has to deflate thru the bancrupcy process, allowing the unhealthy to shut down, making room for healthy innovative companies. Obama and company are in denial and boderline inept.

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  4. Jane, there is no hope for Obama – not even if he tried, he could not save himself from being known in the future as the worst US president ever.

    Unfortunately for this nation’s residents, we face massive taxation and a depression that will make the last one look like a mere bump in the road by comparison.

    May God help us, because we won’t get any help from the lawless government that has grown up around us.

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  5. Jane,
    Apologies alone will not do it.
    Action speaks louder than words.
    He reminds me of my ex husband who after he abused me would apologize just to turn right around and abuse me again.
    I left him because his words ment nothing to me. It was his actions that proved to me that he was never going to change his ways.
    The American people feel the same about Obama. As far as I am concerned the man should be impeached at most not elected to a second term at least.
    Annette
    And Jim Dean Democrats were in control of Congress part of the time W was President. This whole debacle with the housing industry goes right back to the Dems forcing Banks to give loans to people who clearly did not qualify.
    Bush was a lousy President but he was not the Marxist Obama is.

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  6. Please see Lynden LaRouche webcast today [Jan 30, 2010]. It reveals generally unknown info not available on the media==plus a whole lot of history around how world oontrol has moved. You will find it unquestionably intriguing. rej

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  7. To Andrew regarding entitlements. What about the many programs for the arts, foreign aid, welfare, prok projects such as museums, etc. There are hundreds of programs and though they may only take a billion here and a billion there pretty soon you are talking real money.

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