So much time, so little honesty
I have a few different points to make in this essay. I’d love you to read them all but I’ll list them here and you can decide. If you’re left-leaning I encourage you to at least scroll to the “The spending issue.”
- History shows a lot can change in 15 months – don’t count Obama out yet.
- Facts are stubborn things.
- The best defense is a good offense.
- The spending issue or why my boss and banker are terrorists.
There are just under 15 months before the election. Anyone who thinks Barack Obama has locked up 2012 for the Republican challenger needs to think again.
At this point in 1991 most thought H.W. Bush was pretty much guaranteed a second term. I recall a conversation with my brother in the summer of ’91 saying if HWB thought the popularity of the Kuwaiti liberation was going to lockup the ’92 election for him he screwed up. Had that been his plan he would have delayed that military action until spring of ’92. Americans, if nothing else, have very short memories, especially among young voters.
A quick economic lesson
If that was true in 1992, it is exponentially true in 2012. We live in an ADHD generation and it is one of Obama’s biggest challenges. He needs to keep reminding us that the “recession,” (I think it is a mild Depression), began in 2008, under Bush’s presidency. That is becoming increasingly difficult.
Any kid struggling to get his or her first job and finding himself trapped under Mom and Dad’s roof might well decide the current President bears the blame. So it is important that Obama pin this on the Republicans in the House. No matter that the Senate and the White House are controlled, no, ruled by the Democrats.
An economic rule that generally holds true is that governmental monetary policy and taxation take about 18 months to completely act upon the economy as a whole. Barring extreme external factors the state of the economy is completely owned by the current Administration by 18 months and absolutely by 24 months. Money borrowed, spent, new minimum wages, tax rules, and regulations passed between January 2009 and February 2010 are now fully effecting the economy.
If Obama’s policies were going to improve the economy they would have been evident by now. Instead we see the beginnings of a double-dip. Why? Because market forces want to recover but government policies are smothering those efforts. Uncertainty in 2010 about new tax rates and the missing Federal budget are still rippling through the economy. How? Because businesses budget spending for the fiscal year in advance.
Last year Democrats for political reasons refused to pass a budget before the year ended. In spite of holding historic majorities in both houses of Congress and the Presidency, somehow Democrats blamed the smallest minority party in history for holding up their budget. This was a Congress who could have passed anything without a single Republican vote and could have and sometimes did, silence the minority filibuster only having to convince a single Republican in the Senate.
Open-your-mind means take-my-position
If you are young and this is your first election, you must open your mind to all arguments not just one side. That’s advice my liberal professors and friends used to give me. Keep in mind that when someone says open your mind it is because they want you to take their side, not because they want you to consider all points of view.
I learned this many years ago. Every time a Democrat friend asked me to open my mind they never returned the favor. Oddly, the more I opened my mind and listened to what they had to say, then compared their theory of what should be right to what has historically happened I had to oppose them.
Facts are stubborn things
John Adams once said, “facts are stubborn things,” but only to people who care about facts. I’m hoping if you’ve read this far you care. I’m going to compare a few facts to theory. I’ll do so in bullet-points to keep them simple.
- Obama promised “change” in regard to the wars in Iraq and Afghanistan. Perhaps that meant fighting wars without goals only arbitrary timetables.
- Obama promised that unemployment would not exceed 8% if Congress passed an $800 billion spending spree. Unemployment was at 7.8% then, it peaked officially at 10.1 and has not fallen below 8.8% since passed.
- Obama promised stimulus spending would go into “shovel-ready” jobs. Government restrictions and red-tape stopped nearly all these projects before they began. Even Obama joked about the myth of “shovel-ready” jobs without offering any remedy. Red-tape and restrictions are a hallmark of Democrat-led government.
- Democrat stimulus plan created very few jobs, mostly inside government. The Administration claims to have “saved or created” 2.4 million jobs at a cost of $277,500 each. Those jobs may or may not have been “saved” as there is no credible method of ascertaining saved jobs, but lets give them those numbers, Those jobs do not pay that much, that is what it cost to “save” them. Had we simply cut checks for $50,000 per unemployed household we could have provided a living for 13.32 million people. Currently there are 13.93 million unemployed, 96% of these people could have been given a year of decent pay, but instead we threw that money away.
- Candidate Obama complained bitterly about the Bush deficit. In 8 years the Bush Administration added a ridiculous $4.858 trillion to the national debt. To date, Obama has added $3.996 trillion to the national debt. (That is according to the Treasury department not left-wing bloggers who use magic tricks to lower that number to $1.4 trillion.) Please note it took GWB 8 years and we are just halfway through BHO’s first 4 years – for those who can’t do math, that’s 2.7 years. Using that as an average spending rate, Obama will leave a second term having increased the national debt by $11.84 trillion – from a starting point of $10.7 – that would mean the national debt could well be around $22.54 trillion. At 100% taxation of every man. woman and child this could not be paid off for decades.
- Green-jobs were supposed to be the future job-growth explosion, the next Internet, remember. The Green jobs Initiative has been pouring money into this fledgling sector and sources such as treehugger.com claim 1 million green jobs have been created. However, the BLS, broadly defines a green job and the industries that get counted seem questionable to me. If those numbers are to be believed then nearly all of the stimulus jobs created would have been green, since the stimulus counts far more than double the number of created jobs by including “saved” jobs.
- Government investment into green jobs was to create “good” paying jobs. In Seattle last year, the mayor and the U.S. Vice-President announced they would spend $20 million in that city to create 2,000 green jobs and reduce Seattle’s energy usage. More than a year later we learn only 14 mostly administrative jobs were created and 3 homes were made “greener,” that according to the Seattle PI. They have 2 more years in the program but at their current rate it is unlikely many more jobs will be created. If they add just 14 additional jobs per year the cost per job will be $476,190. Again, why note simply write checks to the low-income families you planned on insulating. Those people could have insulated their own homes for roughly $2,000 per home and the demand on local installers would have actually created jobs. Heck you could have paid them a premium, allowing them to keep the difference as an incentive to take advantage of the program and you would have further stimulated the economy by increasing discretionary income in low-income neighborhoods. The problem is ideology. Democrats are derived from a socialist economic philosophy that believes individuals are too greedy to properly make social and economic decisions and thus require government control and intervention. Conservatives hold to purely capitalistic principles that maintain that individuals have a right to the money they earn and as the rightful owners can direct the use or saving of that money.
So when Obama defends his economic policies he must do so offensively. By that I mean he cannot defend his record by pointing to successes or improving trends, rather he must find demons to blame. Honestly, sure he was handed a tough hand but he approached it from a socialist pov and rather than solutions he has only provided ineffective and inhibiting policies.
He’ll use his tried and true excuse saying the problem was worse than he could have imagined when he was handed the reigns. (I predicted this one within days of his election in 2008.) He’ll point to the tea party and say they conspired to harm the economy by opposing his plans. He’ll try to blame Republicans in Congress.
All-the-while ignoring the fact that in 2 years Democrats controlled the House of Representatives they failed to pass a budget – even when they held a majority capable of passing one without Republican aid.
The spending issue
When I talk to Democrats about the debt issue they seem to have forgotten what it means. Before 2009, they were fired up about the debt.
One friend used to leaving the debt clock running on his computer and loved to show it to conservatives as a way of attacking GWB. “He’s robbing my grandkids” was one of his favorite things to say.
Today you can’t find the debt clock on his computer. If you bring it up somehow we end up talking about how this was Bush’s fault and that Obama is trapped into spending exponentially more in some perverse way of fixing the debt problem.
That’s IF you can get him to talk about it at all.
Government (in total-fed, state, and local) spending is not comprehensible to the human mind. This is why we argue about it. If you can’t understand the numbers you can defend the continuance current spending.
Currently, total government spending is nearly 41% of GDP. That is 41% of the total income of all the people and businesses in the entire nation. For most of GWB’s presidency that level was at 35%.
My boss and my banker are terrorists
I was trying to figure out a nice illustration to make the issue understandable. This is what I came up with.
Scenario: For easy numbers we’ll assume I make $100,000 per year. My company (from which I derive my income) makes $333,000 before expenses and taxes (in total government in the US collects nearly 1/3 of GDP in gross receipts – see data360.com and usgovernmentspending.com. I know, a ridiculous idea that I should make nearly as much as the entire company but that’s an accurate analogy between the government and GDP.)
Obviously it’s impossible for me to make more than the company, (assuming it is my sole source of income,) furthermore doing so would kill the company. Already I’m consuming 1/3 of my company’s total income with my paycheck.
However, I’m one greedy guy and that $100k paycheck isn’t enough. I need to spend more.
In fact, I’m committed to spending $136,550 – nearly all of it is non-negotiable spending. Plus each year I need to increase my spending 7.5% but the company’s total income is only rising by 1%.
Naturally, I’m begging for a raise. Not just a 1% raise, no I need a 7-10% raise. When my boss complains I’m already getting nearly 1/3 of the company’s total receipts and that I must cut my spending, I get indignant. Furthermore, the bank is indicating they don’t want to increase my credit card limits.
I’m carrying $356,000 in credit card debt* and I need that limit increased so I can spend an additional $36,550 more than I make next year.
My boss and the banker are terrorists. They are holding me hostage. If I freeze my spending levels won’t the bank and my neighbors see that as a negative? Don’t I need to spend more in order to get out of this hole I’m in?