A financial crisis is the worst time to change the foundations of American capitalism.Mr. Obama's $3.6 trillion budget blueprint, by his own admission, redefines the role of government in our economy and society. The budget more than doubles the national debt held by the public, adding more to the debt than all previous presidents -- from George Washington to George W. Bush -- combined. It reduces defense spending to a level not sustained since the dangerous days before World War II, while increasing nondefense spending (relative to GDP) to the highest level in U.S. history. And it would raise taxes to historically high levels (again, relative to GDP). And all of this before addressing the impending explosion in Social Security and Medicare costs.
I do not expect all of this to end well. And I think that is a gross understatement.
A financial crisis is the worst time to change the foundations of American capitalism.
3 comments:
Wow...I don't know where to begin.
First, Obama is a center left politician...in most countries of the world, he would be considered center right. He's hardly this "radical."
Second, most economists, if anything, believe Obama isn't spending enough and getting radical enough. A crisis demands bold action. Many icons of the right, for instance, like Greenspan himself, have suggested he should nationalize the banks.
Third, Obama is not cutting back defense spending, he is slowing its growth. There's a huge difference.
The Obama administration has proposed a $527 billion budget for the Pentagon, excluding war costs.
If enacted, that would be an 8 percent increase from the $487.7 billion allocated for fiscal 2009, and it would match what the Bush administration estimated last year for the Pentagon in fiscal 2010.
Then there is the legitimate question of how much is enough, even in defense spending. By itself, the U.S. spends almost as much on its military as every other nation in the world combined. It spends almost 7 times as much as the next-largest defense spender (China). We are not challenged in this area at all.
Fourth, as for the tax situation, all he is going to do is restore some balance to a system that has heavily favored the very wealthy. Letting the Bush tax cuts expire will allow tax rates to go back to levels during the Clinton era...not exactly a bad time economically. Another change he's suggested having to do with certain deductions for the wealthy would roll that back to Reagan era levels. Again, not exactly a bad time for the wealthy.
Fifth, there's this utterly absurd notion that the sinking stock market is somehow due to Obama and not the bad economy. The economy is sinking the Dow, not Obama. I mean does anyone think the market could rationally go up with the spate of bad economic news that continually is released?
Confidence has to be based on sound realities, not the other way around. To divorce confidence from reality is to be delusional, and we had all too much of that in the last administration.
An analogy: a great athlete has confidence, but only because he/she has evidence of their ability. But for me to have confidence that I am a world class athlete, with no basis in fact, would be ridiculous.
To hear some pundits blame the stock market movement on Obama presupposes that everything was so wonderful before he took over. Most people never realized that we had it that good.
Sixth, there's also this rush to judgement based not only on the Dow, but on such a short period of time. No wonder why we've gone from bubble to bubble...too many people want a microwave instant cure for the economy, instead of realizing that we have to do the hard work of laying the foundation for real economic growth.
We've become addicted to the Dow, and why not? It's an easy way to keep score and in a bubble an easy way to wealth. It's far more difficult to build wealth the old fashioned way, as in adding value to people's lives.
I'm very optimistic on the ideas of finally jump starting our research and development of clean alternative energy, of creating a much better health care system, of basing our policies on real science instead of ideology, and focusing on building a great education system.
All of these we neglected for too long, as we naively trusted in a warped version of the market.
FDR was accused of instituting socialism and fascism, but somehow capitalism survived just fine. It was said of Reagan that he would blow up the world in a nuclear war, but instead we won the Cold War.
I remember when Clinton was elected, some predicted the end of both our freedoms as well as dire economic collapse. Of course we enjoyed a period of virtually unprecedented economic growth.
Apocolyptic predictions about Presidents are nothing new, especially when driven by ideology moreso than fact and reason.
Wow...the Dow went up 380 points today...that must be Obama!
The President appointed Van Jones, a green visionary, as a Special Advisor for Green Jobs, Enterprise and Innovation. Wall Street rejoices. (BTW, Van Jones really is an amazing choice and a great student of oratory and a pretty good speaker himself...the whole earth should be happy with this selection).
The President gave a talk on education...the markets approve!
Pres Obama met with the UN Sec General...the markets must love the idea of the US working more closely with the UN.
At this rate after the first 100 days the Dow will be at 25,000.
Reagan never had a 380 day point rise in his first year, much less his first 100 days...
mmm...K(eynesian)oolAid!!!
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