Sunday, April 11, 2010
Obama Hits the Wall
By Alan Caruba
We all know our own profession or industry better than others because that’s where we earn our living.
So when my old friend Jack O’Dwyer, the publisher of his namesake Public Relations News, reported that “Eight of the ten largest O’Dwyer-ranked independent PR firms were in the minus column for 2009”, adding that “15 of the top 25 and 32 of the top 50” firms reported “negative years”, it merely confirmed what I already knew.
I have been a PR counselor since the 1970s which means I have seen good times and bad. What this has taught me is that when the economy begins to fail, public relations is one of the early indicators because cutting back on PR or eliminating it from the budget is always among the first choices of corporations, trade groups, and non-profit enterprises.
I read the business and financial news because I need to know what industries are thriving, which ones are encountering losses, and, of course, what the various gurus have to say about the state of the economy. The one thing I have learned, however, is that the business press will be reporting “signs of recovery” right up to the day the whole house of cards collapses.
Barack Obama may think he’s on top of the world right now. He forced the Democrats in Congress to pass Obamacare. He signed a non-proliferation treaty with Russia. Earlier he picked up a Nobel Peace Prize. But. There’s always a “but.”
On April 8, Doug Elmendorf, the head of the Congressional Budget Office, added his voice to a growing chorus of economic experts saying that if political leaders don’t scale back spending, increase taxes or both, the U.S. will be even more broke than it already is. All the taxes collected will cover defense and “entitlement” programs. All other funds will have to be borrowed at a rate of about one billion every single day.
To be precise, that would mean increasing taxes on the fifty percent of earners that pay income taxes. Nearly half do not. Add to them the increasing numbers of unemployed who are not earning anything these days. Not exactly a fair “re-distribution” of wealth.
In a time of economic crisis, most economists will tell you it is essential to ensure that more people can keep more of their earnings than turning them over to the same government that has been wasting them. When people buy real things, the economy hums along. When they stop, it stops.
Elmendorf is worried about the increase in public debt from $7.5 trillion at the end of 2009 to $20.4 trillion at the end of 2020 if Obama’s fiscal 2011 budget is implemented as written. “As a percentage of gross domestic product, the debt would rise from 53 percent to 90 percent, CBO forecasted.”
Whoa! Ninety percent of the entire output of the U.S. economy! The last time that happened was right after World War Two!
Ben Bernanke, the chairman of the Federal Reserve, recently said that government must cut entitlements or raise taxes. I cannot think of a single reason why government, i.e., politicians, would ever cut entitlements. All they have done since the 1930s has been to create new entitlements, Social Security, Medicare and Medicaid, while at the same time dipping into the funds that were supposed to be set aside to pay them and spending them.
Just how greedy is Congress and just how stupid do they think Americans are?
Well, consider this. Obamacare not only intends to slash a half trillion dollars out of Medicare funding, but also add several millions to its rolls.
Healthcare, we’re told, is “a right.” I checked the U.S. Constitution and could not find anything in there that specifically cites healthcare. Moreover, it is unconstitutional for the government to require you to purchase anything such as healthcare insurance if you don’t want to. A comparable state healthcare program in Massachusetts is already broke and, if you live there, you cannot buy an alternative insurance policy.
When Medicare was enacted in 1965, Americans were told that it would cost $9 billion in 25 years (1990). It cost $67 billion, fully seven and a half times more.
Obama is about to hit the wall. It is called reality. It will be a miracle if the villagers are not in the streets with pitchforks and torches.
It is worth pausing to remind you that wherever communism/socialism has been applied, it has failed. As an oppressive political system, it works, but as an economic system it failed the former Soviet Union and has been abandoned by the Peoples Republic of China. It has failed Cuba and is failing Venezuela.
As for Obamacare, there’s the unconstitutionality of this hideous, socialist healthcare “reform” (states are signing up to challenge it in the Supreme Court) and there is an economy that will not produce new jobs despite the inflated reports that include thousands of temporary census takers. It was a failure the moment Obama signed it.
In November’s mid-term elections, all 435 members of the House of Representatives are up for re-election. One third of the Senate, 33 members, will also stand for reelection. All of them, Democrats and Republicans alike, need to be replaced. Your town dog catcher could do a better job of running the country.
At the very least, do not vote for anyone standing for election who will not take a pledge on the Bible to cut spending, to cut taxes, and to repeal Obamacare.
© Alan Caruba, 2010