"The Great O Has Spoken!"
By Robert Romano
“The American people are watching. They did not send us here to get bogged down with the same old delay, the same old distractions, the same talking points, the same cable chatter. You know… aren't you all tired of that stuff? They did not vote for the false theories of the past, and they didn't vote for phony arguments, and paid politics. They didn't vote for the status quo. They sent us here to bring change.”—President Barack Obama, Remarks to House Democrats, February 5th, 2009.
“The Great O has spoken!”
President Barack Obama is getting angry about his “stimulus” package, now stalled in the Senate. Like the Great and Powerful Oz when faced with a courageous Dorothy, he is not taking well to criticism of his leadership, and he does not want critical eyes peering to see the man behind the curtain.
This is a President who is watching his mandate to govern—alongside his vaunted trillion dollar “stimulus” plan—evaporate quicker than a drop of water on Venus. He says the point of a stimulus plan is to spend.
And apparently, in his eyes, to spend as much as it takes, no matter the cost. Since its passage in the House last week, the bill has grown from $819 billion, before interest, to $920 billion. After interest, in either form, the figure will rise to well over $1 trillion.
And, the longer Congress negotiates the terms of America's bankruptcy, the larger the figure appears to get. According to Mr. Obama, “If we do not move swiftly to sign the American Recovery and Reinvestment Act into law, an economy that is already in crisis will be faced with catastrophe.”
“The Great O has spoken!”
Or, perhaps, Mr. Obama, if Congress moves too swiftly to ratify his trillion dollar spending bill this week, and another trillion dollar bank bailout bill next week, the nation will be bankrupt by month's end.
The nation has never seen spending on this order so quickly into a new Administration. It is as unprecedented as its ultimate consequences will be unconscionable. The speed at which Mr. Obama is insisting that this legislation be passed must give Senators great pause to consider what is going into the plan. And why.
The Administration is essentially attempting to create “stimulus” out of thin air. Pump a trillion dollars into the economy and, the theory goes, that will “stimulate” economic activity. What is actually occurring, since global markets have become deleveraged in the wake of the financial meltdown, is that national economies the world over cannot meet their financial obligations.
Pensions and 401(k)'s have been hit hard, as an example. Home values hit. Other assets are hurting, too. But not because of a lack of value, but because they were overvalued in the first place. In other words, they were inflated. It was a bubble that has now popped.
The first “stimulus” in 2008, subsequent bailouts of investment firms, insurance companies, and banks, have all been designed to shore up liquidity in a market that once depended upon overleveraging to finance the global economy. And now, in what turns out to have been a horrible gamble, governments the world over are trying to make up for that mistake by simply flooding the economy by pumping up the monetary base.
Mr. Obama would have the nation go ever and even further through fiscal “stimulus” by simply spending money on particular special interests handouts, kickbacks, and outright giveaways. Which, of course, will not really stimulate the economy at all.
As noted by a joint letter sent by 18 limited government and free market leaders to the Senate, “The irresponsible expansion of the budget to bail out state governments from their own budget deficits, expand Medicaid, boost education spending, food stamps and unemployment benefits, build federal buildings, provide more for public housing, construct climate change supercomputers, erect trade barriers overseas, create refundable tax credits, and make special interest payouts will not stimulate sustainable economic growth.”
Indeed, they will only add to the debt, which ultimately will lead to higher taxes, higher interest rates, and inflation.
Those are not phony arguments, Mr. Obama. They are factual statements, and instead of addressing those statements in vague generalities, you might try actually refuting them with an eye toward proving some sort of hypothesis.
You promised to bring change, Mr. Obama. To cut out wasteful spending. To reduce the debt. Instead, you have proposed the quickest expansion of debt in history, and there is more waste in this bill than any landfill in New York City. This is not change, it's a sham!
“If you were really great and powerful, you'd keep your promises!”
Robert Romano is the Editor of ALG News Bureau.