Americanly Yours

The phrase “you never get a second chance to make a first impression” works for Presidents too.  President Obama’s first year in office has been marked by failure after failure.  His only remarkable legislative success, last year’s “stimulus” bill is itself a failure.  But just how has the  first year of Mr. Obama’s Presidency been a failure?  Lets take a brief look:

Economy:

The economy continues to deteriorate under President Obama’s leadership. When President Obama pitched the “stimulus” bill to the skeptical American public, we were told that if this “crucial” bill was not passed soon (ie, before Congress had ample time to read the bill) then the economy would face devastating consequences.  This was of course a well calculated and bold faced LIE.  The fact of the matter is that the majority of the spending in the “urgent stimulus” bill were not going to be spent for over a year.  We were warned by the Administration that failure to pass the bill would cause unemployment to skyrocket and could cause it to reach as high as 9%, but passing the bill would keep unemployment from raising above 8% (see this chart put out by the Obama Administration to urge support for the “stimulus”).  So, we passed the bill and despite (or because of) this, the official unemployment rate surged past 9% and currently sits at 10%.  Of course, the 10% figure is a lie as well.  Previous administrations changed the way that the unemployment rate was measured in order to disguise how bad things really were.  This U-6 unemployment figure is still reported by the government, however, the government now uses U-3 as the official unemployment number.  While U-3 unemployment is 10%, U-6 unemployment is 17.3%.  This figure was 13.5% one year ago.  Simply put, things are bad.  But, government data collection is shady and should not be trusted as definitive.  Shadow Government Statistics, a private data collection/analysis website places unemployment at over 22%!

Ben Bernanke failed to see the impending collapse even shortly before the economy tanked.  While a candidate for President, Mr. Obama repeatedly criticized the economic policies of the Bush Administration.  By choosing to reappoint Ben Bernanke as Chairman of the Federal Reserve, President Obama was giving his tacit approval to the policies of the Bush Administration.

The administration has also increased the national debt to dangerous levels.  The US is now in serious risk of having its credit rating downgraded.  Any hopes of an economic recovery would be shattered if this were to happen.

Foreign Policy:

Candidate Obama repeatedly attacked the Bush Administration on three fronts: the economy, the wars, and foreign relations.  President Obama has failed to correct the errors of the Bush Administration on any of these areas.  As mentioned above, President Obama has continued the “stimulus” and bailout policies initiated by President Bush.  His reappointment of President Bush’s Federal Reserve Chairman Ben Bernanke confirms the fact that President Obama’s economic policies are not notably different than those of President Bush.

The second area where candidate Obama frequently attacked the Bush Administration was his handling of the wars in Iraq and Afghanistan.  Mr. Obama criticized President Bush’s Iraqi surge, falsely claiming that it was not a success.  If I were a candidate who ran on a platform of change and who repeatedly criticized the previous administration’s military policies, I surely would not have allowed the previous President’s Defense Secretary to continue serving.  Furthermore, if I had attacked the former President’s Iraqi surge strategy, I would not have employed a similar strategy in Afghanistan.  However, President Obama has done both of these things.  He kept Defense Secretary Robert Gates in his position, and he has sent an additional 68,000 troops to Afghanistan since taking office (many of those troops were sent in the weeks following the President’s claiming of the Nobel Peace Prize).

Candidate Obama promised to have all of the combat troops out of Iraq within 18 months after taking office.  That leaves him less than six months to remove over 100 thousand troops from Iraq.  Id put the chances of this happening right at zero.  More likely, President Obama will declare that the troops in Iraq are no longer combat troops (despite the fact that they will almost surely be engaging in combat).

President Obama missed a historic opportunity to improve relations with Cuba.  Since taking over, Raul Castro has introduced many positive reforms, introducing notions of private property, increasing wages for productive workers, and allowing Cubans to take advantage of certain technologies.  Raul Castro’s Cuba still has a very long way to go, but any movement in the right direction should be seen as positive.  Candidate Obama pledged to improve relations with Cuba.  Instead, President Obama has continued to support the same policies towards Cuba which have failed for the past 48 years.  Of course, this si just one example of this administration’s failed foreign policy.

Candidate Obama pledged to repair our strained relations with foreign nations.  President Obama has failed at this as well.  He has been publicly scolded by Russia’s Putin, Israel’s Netanyahu, France’s Sarkozy, and other allies.  In fact, I would argue that our foreign relations have not noticably improved with a single foreign nation since President Obama’s inauguration.

Agenda:

President Obama has almost completely failed in his efforts to push his agenda during his first year.

Remember, this President was the candidate who vigorously campaigned on a platform of “change.”  There have been few noticeable changes in the previous year.

With sizable majorities in Congress and a public eager for change, President Obama should have had a relatively easy time pushing through at least some major parts of his agenda.  The only major bill that President Obama was able to push through Congress during his first year in office was the “stimulus bill.”  This was a bill which was passed by using intimidation, threats, fuzzy math, erroneous estimates, and down right lies.  The “stimulus” bill was a costly mistake that did little if anything to stimulate the economy but will cost taxpayers around $1 trillion when the time comes to repay the costs of financing this bill.

Congressional Democrats pushed various health care reform bills for well over 6 months.  During this time, President Obama showed almost zero leadership on this issue, basically promising to sign any bill that came out of Congress.

Had President Obama taken a leadership role and urged Congress to pass a series of smaller health care reforms instead of trying to push a sweeping bill down the throats of an adamantly opposed American public, he could have signed several of these reforms months ago and moved onto other pressing issues.  Instead, Democrats wasted the better part of a year, alienated a large portion of American voters, and came up empty handed.  Democrats might now adopt the strategy of pushing through smaller, incremental reforms, although it could even be too late for that approach.

Opponents of government controlled health care can thank President Obama’s complete lack of management abilities for preventing the nationalization of health care that seemed to be a foregone conclusion several months ago.

The President’s inability to lead has also prevented the passing of cap and trade and several other government intrusions into the lives of individuals.  He has placed his coalition in danger time after time, and now seriously risks losing the House of Representatives in November.  Things also look increasingly likely that the Senate may be in play in November as well.  More ont his in a future article, but it is beginning to look very likely that Democrats will lose President Obama’s former Senate seat, Vice President Biden’s former Senate seat, Harry Reid’s Seat, and possibly Hillary Clinton’s seat.  This would have been unthinkable only one year ago, but then again so would a Republican winning Ted Kennedy’s former Senate seat.  President Obama has alienated Democratic voters to a degree that even the most optimistic Republican would have thought to be impossible a year ago.

President Obama should follow the lead of Domino’s Pizza: soak in and address the valid criticisms, revamp his “product,” and use his rhetorical skills to sell his new image to the public.  Failure to do so can only lead to a changing of the guard in the 2012 Presidential election.

Americanly Yours,

Phred Barnet

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I have been hearing a lot of talk lately about repudiating our national debt.

Last week, my mom even commented that she thought that we should cancel our debt so that we didnt have to pay back China.  No one can deny that my mom is very intelligent.  The old phrase “mother knows best” often applies, but in this case, mom is incorrect.

According to the US Treasury department, our national debt is currently $11,379,966,189,575.05 [$11.3+ trillion].  This amounts to over $37,000 per person! But, the above numbers dont paint the whole picture.  A while ago, I posted a link to a news story which claimed our “real” national debt totaled $78,800,000,000,000 [$78.8 trillion].

However, Richard Fisher who is President of the Federal Reserve Bank of Dallas recently gave a very interesting interview with the Wall Street Journal.  In his interview, he talked about “the very deep hole [our political leaders] have dug in incurring unfunded liabilities of retirement and health-care obligations… [that] we at the Dallas Fed believe total over $99 trillion.” Thats $99,000,000,000,000.  But that is just the money for the unfunded liabilities and the costs of retirement and health care that have already been promised.  That number includes neither the current national debt, nor does it include the proposals by President Obama and the Democratic members of Congress to expand national healthcare.  However, even without including new proposals, the total national debt is astounding to say the least.  If you add the Dallas Federal Reserve’s estimation of unfunded liabilities with our current national debt, you reach a total of over $110,000,000,000,000 [$110 trillion]!  This amounts to a total debt of  over $360,000 for every American citizen!!!

Repudiating the debt probably sounds like a compelling idea.  After all, our national debt is massive and will continue to grow, especially as baby boomers start to retire and Social Security and Medicare costs soar while revenues for those programs drop.

[[And by the way, Mr. Fisher far from being a Republican hack who criticizes every move made by Democrats.In fact, Mr. Fisher is a Democrat who served in both the Carter and Clinton Administrations.  He was also the Democratic nominee for Senate in 1993 against Kay Bailey Hutchinson.]]

With current liabilities of over $360,000 per person, repudiating the debt may sound like a great idea.  Afterall, that is a massive sum for each America to be responsible.  In fact, there isnt enough money in the entire world to pay this debt. But, repudiating the debt is a terrible idea that must be opposed.

Yes, China and other foreign nations now own an increasing amount of our national debt.  This of course represents a massive national security risk to America (I believe that it is the greatest current threat to our National survival).  It is a security risk because the Chinese and other nations can threaten to dump their American debt holdings (making them worthless) unless we comply with their demands.  However, repudiating the debt and telling nations like China that we are not going to pay them the money they lent us in good faith may be an even greater risk to our Nation.

First of all, while China is now the largest foreign holder of our national debt, they hold less than 7% of the total debt.  Allies like Japan, the United Kingdom, Brazil, European nations, Mexico, India, and Israel also hold significant amounts of our national debt.  China’s holdings of our debt represents about 25% of the amount held by foreign governments.  Repudiating the debt to spite China would not only hurt China, but would also hurt many of our allies.

These nations could respond by exiting free trade agreements (if we can unilaterally declare agreements null and void, so can they).

The American public actually owns a higher amount of the national debt than do foreign nations.  As of January 31st of this year, the American public held 31% of the debt while foreign governments held 29%.  Repudiating the debt would adversely effect Americans who purchased government bonds to save for their futures.  Remember those savings bonds that your grandmother used to give you when you were a kid?  Well, those would be worthless if we repudiated the debt.  So would the treasury bonds that many older people have bought to prepare for their retirement.

Another 41% (if you add the numbers up you get a total of 101%–not my fault, these are government numbers) of the national debt is held by the government.  For example, the Social Security Administration holds treasury bills for money that it loaned to the Treasury Department.  Repudiating this portion of the debt would only mean that it would have to be reissued later when the sectors of the government that loaned money out need it in the future to manage their budgets.

[[The above numbers came from The Skeptical Optimist who used only government data.  The data is linked to in his article.]]

Besides all of this, of the $110,000,000,000,000 [$110 trillion] in total debt and obligation, only about 10% of that represents our current national debt.  Even if we repudiated the $11,379,966,189,575.05 [$11.3+ trillion] that we currently owe, we would still be responsible for a national debt of $99,000,000,000,000 [$99 trillion] in the future.  But if we repudiated the national debt, we could NEVER ever run a deficit again.  No foreign government would be dumb enough to loan money to a nation which had previously declared that its debt no longer existed.  That would be the definition of bad banking.  No financial advisor could ever recommend US bonds for his clients without being laughed at.

The political and economic costs of repudiating the debt are extremely high.  Like it or not, we are stuck with this debt.  However, we can think of this as a lesson.  If we balance the budget in the future and pay back the debt over the next 30 years (the maximum time a US treasury bond can be issued for) we will have plenty of time to think about the costs of running large deficits for so long.  All of the interest on the debt which is paid out should serve as a lesson for future generations of Americans about the importance of living within their means.

Repudiating the debt would make it impossible to pay for the bloated government programs which have already been promised to generations of Americans.  Im 100% for balancing the budget.  I believe that we should balance our budget and begin to wind down our entitlement and discretionary programs as fast as possible.  This debt should be taken care of the right way.  In this case, the right way happens to be the hard way:  We must oppose new government programs and discretionary spending, we must balance our budget, we must cut taxes to ensure economic growth, and we must pay back our national debt to those who have put their faith in us and loaned us money.

Americanly Yours,

Phred Barnet

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