In the President’s recent State of the Union address, he referred to the nation’s economy as “unfinished business”. If ever two words had more multiple and layered meanings than that Executive utterance, they are lost in the winds of time.
There’s no doubt the President’s “business” with the nation’s economy is unfinished. His reckless and feckless policies have undermined it to such a staggering degree that even the mighty American working people, who have risen and surmounted every challenge ever tossed their way, are finally on the ropes like aging Muhammed Ali after eleven rounds with Larry Holmes in 1980.
The idea that you can borrow your way out of debt is folly and fallacy. Sure, private businesses go into debt periodically for things like capital improvements, leveraged buyouts of the competition or short-term bridge loans to get through a transitional period. That is a normal part of the capitalist process, taking a calculated financial risk to ensure greater growth and profitability in the future. But they have a plan for how and when the debt is going to be paid off, what the level of acceptable risk is, and what the ROI or return on investment will ultimately be. Lenders will not approve them if they carry too much debt to begin with.
Government doesn’t work that way. It produces nothing. It sells no product nor provides any service that contributes to the economy. It is a non-producing entity whose very existence is a burden upon the labors and earnings of actual producers. It is critical for responsible citizens to keep that burden as small and manageable as possible.
When government borrows enormous sums of capital for today’s expenses by leveraging future GDP, it saddles its citizens with irresponsible debt that will have to be repaid through burdensome taxes. Contrary to the horse manure spewed by politicians on both sides of the aisle, these are not “investments in the future.” Quite the contrary, they are piratical raids on future earnings to feed past indiscretions. Our current GDP is so highly-leveraged that it approaches ‘”junk bond” status. As the wise settlers used to say, if you eat all your seed corn during the winter, there isn‘t going to be a “next year”.
Our President has been behaving like Francesco Schettino, disgraced captain of the wrecked Italian cruise liner Costa Concordia, showing off and recklessly hot-dogging with the lives and future of a nation entrusted to his leadership. The sobering photos of that mighty ship listing perilously on its side and the deaths that resulted from Schettino’s actions serve as a glimpse of the economic path we are currently careening down . The cruise captain denied any culpability and went home to his comfortable house, while our “leader” responds by playing more golf than all his predecessors, and stomping his foot down on the accelerator of unchecked expenditure. Record-shattering debts and deficits are the true hallmark of his administration, and even that isn’t enough for The Insatiable One.
Another problem our President has is his penchant for growing government by quantum leaps. It’s no secret that Mr. Obama looks with great approval at the European Socialist model of statehood, where productivity is low, unemployment is high, state-supplied healthcare and other services are mediocre, and taxation is beyond confiscatory. He seems completely determined to destroy the US economy by turning us into a debtor state, something we have never been. Next time you see a Chinese national on the street, stop and introduce yourself to your new landlord.
Historically, many empires that could not be defeated by external force succumbed to economic implosion. When the ducats run out, the glue of the empire dissolves. Our President has by every action shown that he 1) knows nothing of real economics; 2) bears a personal hostility towards free market capitalism and private business; and 3) is determined to reshape this nation by the easiest means available to him – namely, economic disaster. His tools are class warfare, compulsory redistribution of wealth, and fiscal suicide.
“Unfinished business?” I’d say he is fully determined to “finish Business” once and for all in this nation.
Image: Collision of Costa Concordia; author: Rvongher; Creative Commons Attribution-Share Alike 3.0 Unported license