Drowning In Obama’s Sea of Debt
- 14 August 2011 by Author 0 Comments
Drowning In Obama’s Sea of Debt
By Richard Larsen
Published – Idaho State Journal, 08/14/11
Usually good humor works because it’s based on a modicum of truth. Sometimes attempts at humor are funny because they’re so far removed from the truth. Such was the case with the Journal’s editorial cartoon in the Friday paper. It depicted Barack Obama attempting to resuscitate a persona labeled “Economy” extricated from waters where it was apparently on the verge of drowning, while the GOP sat comfortably on a lounge sipping a beverage of undisclosed composition. The cartoon was obviously drawn either by an Obama ideologue (one of those believers in the elusive “hope and change” mantra) or someone just ignorant to fact and oblivious to history.
Put in accurate contemporary perspective, the cartoon may have needed several frames. The first, starting with Obama’s election, would have had him dunking the economy in the water (sea of debt) with his first round of spending increases (modified bailout). The second frame would have had him nearly drowning the economy with a failed trillion dollar (with interest payments) “stimulus,” that was more political payback than it was economic stimulus.
The next few frames would have been repeated attempts at drowning the economy in the sea of debt with FinReg, ObamaCare, significantly expanded EPA job-destroying regulations, “Cash for Clunkers,” and another 608 regulations imposed in July alone by the administration. All the while, the Pelosi and Reid congress was helping him dunk the economy, attempting to hold it under the sea of debt, and cheering Obama on from the bank.
For accuracy, the cartoon should’ve shown congressional conservatives attempting to save the economy by preventing Obama from dunking it again, and striving to find the drain plug to the sea of debt, and looking for buckets to lower the debt level.
Every policy, initiative, and regulation that I can think of instigated by this administration has been a threat to the economy they claim to be helping. The only exception, one that gave the economy another gasp of air between Obama’s dunks, was agreeing to retain the Bush tax cuts. And yet, instead of accepting responsibility for his actions, he ascribes blame for the nearly drowned economy to the “Tea Partiers” in congress who were trying to save it! Somehow we’re to believe that more debt and more taxes are going to save the economy and create jobs? It’s never worked before, why should we expect a different outcome just because “The One” is doing it?
I was impressed this past week with Art Cashlin of UBS when CNBC interviewed him on the floor of the New York Stock Exchange. He cited Albert Einstein’s definition of insanity of doing the same thing over and over again while expecting a different outcome in reference to the possibility of the Federal Reserve printing more money to monetize the debt through a “QE3,” or a third phase of Quantitative Easing. The same principle should be applied to Obama’s economic solutions: more spending is not the solution, either to stimulating an economy and job growth, or to reducing the deficit and the national debt. More of the same exacerbates the problem, not solving it.
These issues have been brought more to light this past week since Standard and Poor’s downgraded the nation’s sea of debt. As S&P stated, “Elected officials remain wary of tackling the structural issues required to effectively address the rising U.S. public debt burden in a manner consistent with a ‘AAA’ rating,” and further indicated that the recent effort at addressing the national spending addiction through the debt ceiling debate did nothing in “putting the U.S.’s finances on a sustainable footing.”
S&P added that the nation’s credit rating could be lowered even further if serious attempts to reduce the debt and deficit are not successful. They further asserted that $4 trillion in spending reduction would be a good start towards rebuilding our credit rating, yet the only proposal that even came close to that figure was instigated by conservatives in Congress. Obama and congressional Democrats’ only solution was to increase the debt limit and keep on dunking.
According to Investor’s Business Daily, the downgrade of U.S. debt will likely add another $100 to $150 billion to the deficit in higher interest costs as new issues of our sovereign debt (bonds, notes, and bills) will have to promise higher rates to reflect the increased risk represented by the downgrade.
It’s difficult to think of any policies and regulation that would be more destructive to our economy and our national fiscal condition than what Obama and his facilitators in Congress have wreaked on the nation the past few years. Was this by design to destroy the nation so he could “fundamentally transform” it, or was it through sheer ignorance of the laws of economics? That’s the $14 trillion, actually, now the $17 trillion question.
AP award winning columnist Richard Larsen is President of Larsen Financial, a brokerage and financial planning firm in Pocatello, and is a graduate of Idaho State University with a BA in Political Science and History and former member of the Idaho State Journal Editorial Board. He can be reached at firstname.lastname@example.org.