Realists are forced to wonder how economic ignorance passes for knowledge among Barack Obama and his policy advisors.
If you asked me to pick an economic plan for this country that assures a deeper plunge into the abyss, I would choose Obama’s financial strategy and budget. It’s the quickest route to more debt, bigger government, higher federal spending, harsher penalties on citizen savings, higher unemployment and more housing loans to those with weak credit. Obama’s current proposals trigger all of the above. Here’s how:
Higher federal spending: Obama’s federal budget, released Wednesday, doesn’t balance the budget, now or in the future. His dinky initial cuts are quickly overwhelmed by federal spending that is projected to total $29 trillion in the next 10 years. Entitlements and interest on the federal debt account for half of all federal spending. Obamacare alone will increase costs by over $1 trillion, and the Health & Human Services Department now says setting up health insurance exchanges will cost double what Obama previously estimated. Compare that to Obama’s campaign pledge that his “health care reforms would save the average family $2,500,” as Newsmax suggests. The feds are spending $1.40 for every $1 of tax revenue; we must borrow the difference.
More debt: The nation’s debt now approaches $17 trillion. That is because Obama spearheaded doubling the U.S. debt since 2008. Our government’s unfunded liability obligations, including future retirement benefits for federal workers, top $87 trillion. Now Obama wants to repeal the sequester caps on discretionary spending, which are the only restraints we have. Even then, the feds will spend more money this year — despite sequester — than last year.
Bigger government: Under Obama’s Taxmagedden budget, government will grow, because spending will mushroom 60 percent between last year and 2023. Very few government programs will be eliminated or downsized. Worse, the president wants the private sector to foot the bill with taxes that will more than double (a 113 percent increase). Obama’s auto-pilot budget requires Congress to balloon the federal debt limit to over $25 trillion. As the Wall Street Journal reported, “The U.S. government is already the biggest spending and borrowing machine the world has ever seen.”
Harsher penalties on citizen savings: Obama’s budget proposes to cap the dollar amounts citizens can save in their 401(k) and IRA plans. New contributions would be outlawed when the saver hits the cap. Americans who delay today’s gratifications to build a retirement nest egg so they won’t burden their kids, or taxpayers, will no longer have that incentive. Why is Obama doing this? Primarily to collect more tax money. You will pay higher taxes if you cannot deduct contributions to your retirement plan on your tax returns. The second reason is to further the administration’s push to make citizens more dependent on the state to take care of them in later years. That is why the political left has never liked tax-advantaged savings plans.
Higher unemployment: The real unemployment rate in America, known as U-6, is still over 14 percent. That includes people who have given up looking for jobs, underemployed part-time workers who want full-time jobs, and people in school because they can’t find jobs. One culprit is the huge expansion of government payments for food stamps (47 million people), disability, jobless insurance and Medicaid — all of which give millions a reason not to get a job.
Housing loans to people with weak credit: The Washington Post reported last week that Obama’s administration is making a big push to “make more home loans available to people with weaker credit.” Obama’s bureaucrats are pressuring banks to push borrowers to enter into Federal Housing Administration guarantees and use federal subsidies to make home mortgage loans. It’s a reckless policy that encourages housing purchases by financially unqualified people, the cause of the boom and bust a few years ago. The federal government’s taxpayers end up being on the hook for losses.
This country continues roaring down an eight-lane highway toward socialism and serfdom, thanks to Obama’s “progressive” ideology that smothers America’s vitality, aided and abetted by half of Congress.
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