21 Jan Is Obama Intentionally Collapsing our Economy
Seeing complex issues in the revealing light of logical simplicity is like a sobering fist that brings us back to our senses. Thomas Sowell, an American social, political, and economic commentator, now at Stanford University, famously said (long before our recent health care wranglings): “It is amazing that people who think we cannot afford to pay for doctors, hospitals, and medication somehow think that we can afford to pay for doctors, hospitals, medication and a government bureaucracy to administer it.” A look at the economic crisis through this lens of simple rationality has to make us stop and wonder: Is Obama intentionally collapsing our economy?
As we cannot search men’s souls for their motives, we are left with trying to deduce their intent from their actions, and the pattern that an overview of their actions will reveal to us. Nevertheless, there are only so many explanations for some political decisions. When those decisions, time after time, fly in the face of rationality and common sense, one is forced to return one of only three possible conclusions: The policies and those making them can only be crazy, stupid, or evil. What other explanation could there be for wrongheaded, destructive policy-making? The decision makers are either deluded by ideological zealotry into believing that the impossible is possible, or they are inept and incompetent. Or, most disturbingly, they know full well what they are doing and what the chilling consequences will be.
The United States has an amazing $15 trillion dollar economy—and a $13 trillion dollar national debt, with trillion-dollar deficits queued up to be added on year after year after year. Greece got into trouble when its debt caught up to its GDP, and so did California. Economists know the result of that kind of crushing, languishing debt that can never be paid off. We are seeing what happens when debt becomes unserviceable—in households, in enterprise, and in nations.
The government collects $3 trillion in tax revenues in a year. According to the Heritage Foundation, the budgetary expenditure is $1.42 for every dollar collected. In another year or two, the total debt will be about five times the income of the government. And they are adding a trillion-dollar health care entitlement to a trillion-dollar stimulus package after a trillion dollar bailout. Let’s look at how this would relate to your household budget:
Let’s say you have a $50,000 a year income. If you were to spend and budget like the government, then you would already have $250,000 in credit card debt; you would spend $71,000 a year; and you would still see the wisdom—after that spending spree—in buying your family a $17,000 health plan and spending another $33,000 to pay off the wife’s gambling debt and to help the kids find a job. How do you think your credit would look when you asked the bank for another loan? What do you think the chances would be of ever paying it all back without liquidating all of your assets? How long do you think you could keep that up before the inevitable catches up with you? Like the old song says: Something’s gotta give. Our political leaders know all they numbers. So…are they stupid? Or is Obama intentionally collapsing our economy?
When Jimmy Carter handed things over to Ronald Reagan in 1981, the entire national debt, from George Washington to Reagan, stood at about $1 trillion dollars. In the next 30 years it increased another $12 trillion—and half of that accrued in the last five years. Now we owe $13 trillion dollars, and the wisdom of the government is to borrow more and spend more. How much is $13 trillion dollars? If Jesus Christ and his twelve apostles each started spending a million dollars a day on the day they were born, they wouldn’t even be up to $10 trillion yet. In fact, they would need another seven hundred years to finish the job.
Entitlements and interest are in the process of swallowing the entire U.S. budget. These are not things that Congress and the administration do not know. The interest on the national debt is now approaching 10% of our budget. And since almost a third of the budget is borrowed money, that means that the interest on the debt in a balanced budget would represent almost 15% of the tax revenues the government collects.
According to the budget office, Social Security and Medicare combined were 18.7% of the budget in 1970; today they are each that much. In fact, Social Security alone is now a bit more than defense. Social Security, Medicare, and Medicaid add up to 50% of the budget. With welfare programs and other “automatic” expenditures that happen every year without any action from Congress, entitlements represent about 62% of our budget. After defense and interest are added in, that leaves little more than 10% for Education, Justice, Homeland Security, Treasury, all the other cabinet departments, NASA and the EPA—the line items that should really represent the entire budget. Now factor in National Health Care for everyone. Now double the interest from the increasing debt. Now double it again when the dollar crashes and our AAA rating goes away causing our creditors to double our favorable interest rate. And don’t forget that Social Security and Medicare will skyrocket when the Baby Boomers retire. Ka-boom.
These aren’t all new surprises or Obama’s fault; we’ve heard of the impending Social Security default for decades. But, with the full knowledge of this creeping dilemma, in the middle of an economic crisis, as we watch Greece and other nations begin to go up in flames, one has to wonder: Is it wise or even rational to drown yourself in even more debt and increase social entitlements with borrowed money that is almost certain to make an already insolvent situation even more hopelessly terminal? What are they thinking? Are they crazy? Or is Obama intentionally collapsing our economy?
Perhaps there is a chance that throwing gasoline on a fire will put it out, but that is not usually the result. Perhaps solutions that failed a hundred time before to solve economic crises will work this time. Perhaps a trillion dollar entitlement will really pay for itself, even though other government programs have always run way over budget. Perhaps trying to run and heal an economy with social politics instead of sound economic strategy will build a strong and revitalized economy. Perhaps three dozen czars with radical and socialist backgrounds are just a coincidence, and they’ve all changed now.
We have only scratched the surface in our analysis of the economic transformation. We could look at policies that seem to be geared toward undercutting the dollar on the world market. We could look at a Cap and Trade bill that would export American wealth and drastically lower our standard of living because of the political boondoggle of global warming. We could examine the reasons for turning down the help from seventeen nations, according to the state department, with oil-skimming ships and other technology to help control the oil crisis in the Gulf. Could it be to appease unions? We could consider the wisdom of tying up the Louisiana governor with federal red tape, delaying his ability to protect his shores by building sand berms. Maybe a devastated Gulf is good for pushing a green agenda.
There is no way to be sure if Obama is intentionally collapsing our economy. But if some of his critics are right about his socialistic intentions, there would seem to be no better way to start growing a Marxist utopia than by disassembling and collapsing the infrastructure of capitalism so that there is no choice but to look to the government for all of the necessities of life. Perhaps Dostoevsky’s Grand Inquisitor had it right: “In the end they will lay their freedom at our feet and say to us, ‘Make us your slaves, but feed us.’”
In any case, it is a sad day when the best you can hope for is that your elected leaders are crazy, or perhaps stupid.