Obama's Lack of Leadership And Our National March To Bankruptcy Continues

According to a NY Times article from July 23, 2010 by Helene Cooper, the Obama administration trimmed its estimate of the Federal budget deficit for this year (the good news) but said the continuing weakness in the economy will lead to an increased deficit next year (the bad news). Details of the announcement include the following:

• The expected deficit was trimmed $84 billion to $1.47 TRILLION, or only about 5.4%.
• This new deficit is still a record in dollar terms.
• This new number still represents about 10% of the nation's total economic output, more than three times the level generally accepted to be safe from an insolvency perspective.
• For 2011, the expected deficit estimate has been raised to $1.42 TRILLION, up $150 billion from the previous estimate and 9.2% of the economy's size next year. This is an increase of almost 12%, wiping out the measly 5.4% decrease listed above.
• Expected unemployment is only expected to drop to 9% from its current level of 9.5%.

Let's do some simple math based on these latest estimates:

• In the past two years. this administration has run up budget deficits exceeding $2.8 TRILLION. This equates to every American household kicking in an additional $8,800 over the past two years just to cover the deficit.
• If next year's deficit estimate is right, than that $8,800 becomes about $13,200 to cover the budget deficits that have been put in place since Obama became President.
• The Federal government is now spending about $168 million an hour that it does not have revenue to cover or about $2.8 million a minute that it does not have.

Whichever number you take, $8,800 or $13,200, that is how much money that the American consumer cannot plow back into the economy to spur growth and decrease unemployment. The numbers are mind boggling and will take decades to pay off.

And what does the political class do in light of these horrid budget results? As usual, nothing constructive. Democrats claim that deficit spending and stimulus programs are needed to get the economy going even though we have shown in this blog several times that, using Obama's own numbers, the cost of creating or saving a job under the stimulus program easily exceeded $200,000. You cannot cure unemployment by paying over $200,000 to create or save a job that is likely to pay far less than that.

Obama claims that he is waiting for the recommendations from his national deficit commission. However, that just delays the eventual confrontation with reality and puts off the hard decisions that the political class loves to put off, particularity in an election year. While the commission meets, billions of dollars a day are added to the national debt. In past posts to this blog we have listed out short term, relatively painless things that the political class could do ahead of the commission to start the long journey back to fiscal responsibility including:

• Bring home our troops from Iraq, which is what Obama the campaigner promised but Obama the President did not do.
• Bring home our hundreds of thousands of troops from Japan, South Korea, Germany, England, Italy, and elsewhere, troops that were deployed for another era and which no longer serve any purpose, and in many ways are counterproductive to American foreign policy.
• Freeze all military recruitment immediately, the hundreds of thousands of troops coming home should fulfill any military manpower requirements.
• Freeze all Federal salaries since recent reports have shown that 80% of Federal job titles and position now pay better than the private sector, most Federal employees are better off than the private employers who support them via taxes. This freeze extends to all members of Congress and the administration.
• Immediately freeze all government hiring at the Federal level and allow the expected high level of attrition to whittle down the size of the Federal work force over the next few years to their historic levels.
• Immediately terminate the Federal pension program as it applies to new hires. Since most new hires in the private sector no longer can get a traditional pension, that perk should be phased out for new Federal government hires once hiring resumes.
• Do an immediate ground up, zero based review of all government functions and programs, as outlined in Step 1 of "Love my Country, Loathe My Government," looking to terminate those that no longer serve a substantial portion of the American public and combine and economize the remaining ones into a more effective management structure even if it means shutting down and consolidating Cabinet organizations. Check out the great work in this area that the Cato Institute is doing in this area.
• Eliminate the entire practice of earmarks immediately, saving around $20 billion a year according to the Citizens Against Government Waste.
• Eliminate the $100 billion a year the Obama administration freely admits is paid out fraudulently from government programs.

If I can come up with this short list, I am sure politicians could come up with a longer list if they had the courage to do so. If you look at this list, it could start saving hundreds of billions of dollars right away without putting undo strain on Social Security, Medicare, unemployment benefits and other people-related government programs. And I am not just talking about the Democrats, deficits ran wild under the Republicans also. But nobody wants to take the hard actions to fix the problem.

One of the big problems that still exists is the focus of the American public. Go to just about any blog or chat room and you see frenzied arguments being put forth on who is to blame regarding the national debt, Obama vs. Bush, Democrats vs. Republicans. the arguments and venom go back and forth and solve absolutely nothing. An NFL football coach once said: "You are what your record is." That also applies to the national debt. We are what our budget is and that is dreadful, regardless of who is to blame. By trying to pin the historic blame on the "other side," we play right into the hands of the political class. They use this anger to keep getting themselves elected and the the problem of the budget and the other major issues never get solved since we keep fighting ourselves.

This is what we are talking about when we talk about "tribes" in "Love My Country, Loathe My Government." The politicians want us to beat each other up, kind of like the gladiators in Roman times. The elite sit up in their boxes and party and the gladiators kill each other off for the bemusement of the politicians. The fact is we are in deep trouble regarding our nation's fiscal solvency. How we got here and who to blame is relatively unimportant. The more important factor is who can assume a position of leadership to get us out of the mess we are in. Winning the argument of whether or not it is the fault of the Bush administration or the Obama administration as far as our national debt is concerned is meaningless if the country goes bankrupt.

Regarding leadership and courage, however, I do not see it coming from Obama, at least in the budget arena. His delay in acting until the national deficit commission gives him some air cover is unacceptable, we do not have the leisure of time to start getting our economic house in order. But I guess I should not have expected anything more. Obama is just like any other politician regarding courage, a word that does not appear on the resume of most members of our political class

Our new book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at www.loathemygovernment.com. It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Also visit the following sites for freedom:

http://www.cato.org/
http://www.reason.com/
http://www.robertringer.com/
http://www.realpolichick.blogspot.com/
http://www.flipcongress2010.com/