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The Path to Unsustainability


I know, I'm a little late to the Obama budget speech bashing party.  Suffice it to say that yesterday's speech was one of the most pedantic and uninspiring Presidential performances in recent memory.  Not even the Vice President could stay awake through its entirety.

I'm a pretty straightforward and practical person.  I enjoy debate, but I have a very low tolerance for hyperpartisan rhetoric, political shibboleths, and weaselly snake oil sales pitches.  I prefer to deal objectively with facts.  So it is with a great deal of apprehension that I look toward the upcoming Congressional fiscal battles.  I'm willing to bet that over the upcoming weeks and months, very few people in Washington DC will have the guts to seriously discuss what I see to be an increasing number of negative economic trends:

  • Real inflation in the cost of consumable goods, primarily food and gasoline (and consequently transportation, which will eventually affect the cost of pretty much everything else) is on the rise.  If you calculate inflation in the cost of consumable goods using the same methodologies in place during the Carter years, real inflation right now is nearly 10%.

  • Government policies are trending toward limiting domestic fossil fuel exploration and extraction, and toward tougher emissions and pollution requirements for fossil fuel refining facilities and industrial facilities that burn a large amount of fossil fuels, such as electrical power plants.  Both of these trends will necessarily result in higher energy costs.

  • There is a significant overall decrease in the size of America's private work force.  And unemployment is now disproportionately affecting middle-age men and young people under the age of 25

  • Many workers (particularly public employees) are opting for early retirement, thus putting an extra financial strain on Social Security, Medicare, and state pension systems.  This is on top of the extra strain that will be placed on these systems as a result of high unemployment and the collapse of the stock and real estate markets, and the corresponding massive loss of private wealth (approximately $17.5 trillion, the equivalent of over one year of GDP) that these situations have created.

  • Today, almost twice as many people, nationwide, work for the government as work for all manufacturing sectors combined.  And this ratio is growing, not shrinking.

  • Government spending, as a percentage of annual GDP, has skyrocketed from a long-time average of 19% to 20%, to over 25% in the last two years.

  • The total net worth of the "Forbes 400" was approximately $1.3 trillion in 2009, which is less than our current annual Federal budget deficit.  In 2007 (the most current year for which data is available) the richest 1% of Americans owned 33.8% of the nation's total privately-held wealth, which was estimated to be $54.2 trillion in 2009.  Doing the math, the "richest 1%" of Americans currently hold approximately $18.3 trillion, an amount roughly equal to our projected national debt in 2014.

Folks, this is where we are right now.  Pretty ugly isn't it?  There is no way we can pay down our debt or balance the Federal budget by taking more money from "the rich" -- they simply don't have enough.  And the wealth creating sectors of our economy are stagnant, if not shrinking. 

Yet progressive socialists like President Obama see this situation as the perfect opportunity for even more government control.  They argue that if the government would have had tighter control of the economy and more power to oversee the fair distribution of wealth, then there would never have been a "great recession" in the first place.  Bigger, benevolent government is always the solution, its methods and motives beyond reproach.  Its expansion must be allowed to continue, even if the bureaucrats who plan its growth have absolutely no clue about how to stoke the almost magical levels of economic recovery necessary to generate the money to pay for it all.

Unfortunately, regardless of how big anyone's dreams for justice and equality may be, they are still subject to reality and its supreme constraint -- the price tag. 

President Obama and the Democrats have put us on a path that is financially unsustainable.  A majority of the American people now know this.  And I think that deep down, a significant number of people within his Administration know it too.   

The real question is, what are we going to do about it?

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Comments (16)

Got a 1/2 tank of gas for t... (Below threshold)
GarandFan:

Got a 1/2 tank of gas for the truck this morning. $52.45 for 87 octane.

The lib economic dweebs maintain that, other than gas, inflation is almost non-existent. Matter of fact, they maintain that companies will NOT pass on higher energy costs to consumers in order to remain competitive.

Yeah, they won't raise prices, they'll drop employees. And when they can no longer drop employees - they'll repackage their products into smaller units at the same price.

Gas hits $5/gallon this summer, Barry's butt is going to be held to the fire. He thinks he's tired of the old "drill, baby, drill"; he hasn't seen anything yet.

A good campaign sign for Barry in 2012 will show a drill bit shoved up his ass.

Oh, and before the usual tr... (Below threshold)
GarandFan:

Oh, and before the usual trolls repeat the DNC talking point about 'evil oil companies', just thank Geithner and Bernanke for printing all those thousands and thousands of additional Zimbabwe dollars.

The dollar is getting worthless and the Saudi's aren't stupid. Then throw in a 'foreign contingency plan' to protect Brit and French access to oil.

Just more of that Obama "Smart Diplomacy".

"The real question is, what... (Below threshold)
sam:

"The real question is, what are we going to do about it?"

No, the real question, what form will the Depression take, and what will the post-Depression American society look like?

Because the Depression's a'coming, not if, but when. There is no way, absolutely none, that we can sustain our path, and there is no way the politicians are going to cut anything, neither the big entitlements nor the small PBS funding.

"The real question is, what... (Below threshold)
sam:

"The real question is, what are we going to do about it?"

No, the real question, what form will the Depression take, and what will the post-Depression American society look like?

Because the Depression's a'coming, not if, but when. There is no way, absolutely none, that we can sustain our path, and there is no way the politicians are going to cut anything, neither the big entitlements nor the small PBS funding.

Sorry for the double post. ... (Below threshold)
sam:

Sorry for the double post. Not sure how that happened.

Reagan administration chang... (Below threshold)
Greta:

Reagan administration changed the products used to measure inlfation. If I remember right, the democtrats had pushed through cost of living increases in many programs and services. The thought was that you needed a different mix that would not be as volitile as those used before. this would have meant the country had a problem with inflaction and suddenly huge checks were going out making the problem worse. Ever since then, we have not seen trends as before. However, it also makes things hard for those living on social security and seeing these prices and also on the poor. Of course we only have poor and homeless when republicans hold the white house.

aaaawwwwwhhhhhhhYo... (Below threshold)
retired military:

aaaawwwwwhhhhhhh

You dont want to take the money from the rich. Shame on you, shame shame shame.

it doesnt matter that they dont have enough money to cover the spending. What matters is repeating the democrats mantra

Tax the rich
Tax the rich
Tax the rich


Because even though we know that wont work we have to sound like it does because we want to look like we are doing something about the problem.


This reminds me of what happened pre WW2 Germany. To take people's minds off of their troubles Hitler came up with the Jews as scapegoats. it was all the Jews' fault. Even if it didnt make any sense whatsoever. No matter what was wrong it was all the jews' fault.

Meet the rich. The scapegoat of the Democratic party.


What are we going to do abo... (Below threshold)

What are we going to do about it? Well for starters-while we wait for the next election and/or our elected officials to do something(ha)...learn some skills of long ago. Prepare for lean times build up some food storage and PAY off any debt you have.

I am sad that it appears that no other path except a very hard one awaits our nation.

How does Barry choose to go... (Below threshold)
914:

How does Barry choose to go? Scape the rich ( which includes him and his handlers), Blame Boooosh!! or race bait?


So many choices, so little time.


This was Obama's last chanc... (Below threshold)
Jim Addison:

This was Obama's last chance to act like a President and lead. He got a free do-over on his budget (submitted only 60 days ago!) and had the opportunity to forge some sort of grand compromise plan to reform the budget, based on the recommendations of his Deficit Commission and the Ryan Plan for starters.

Instead, he punted and voted "Present!" as he always has. He can't make a decision because he's never acquired any leadership skills. He's great at reading a prepared text off of a teleprompter, but that's it.

To compound his failure, he not only offered NOTHING useful, NOTHING specific, he could not resist demonizing Republicans and declaring war on any entitlement reform.

I bet Jimmy Carter never thought he'd live to see his rep as Worst President Since Buchanan improve to the new champ, Obama, the Worst President Ever.

Buchanan didn't do anything to stop the breakup of the union, but there was little he could have done. Perhaps a more skillful and involved President might have put the crisis off another few years, but even that is doubtful.

Obama had the chance. All he had to do is reach out, just a little, to start a serious dialogue. But Obama doesn't do serious dialogue. He only knows serious demagogue.

Michael, you are the most i... (Below threshold)
Chico:

Michael, you are the most intelligent and subtle poster on Wizbang. I realize that comparing you to a group of howling macaques is not saying much, but take it as a sincere compliment.

Questions: why not examine the power and impunity of Wall Street?

Why haven't the massive frauds in mortgage securitization been prosecuted by Obama's DOJ?

Why is it that Bernanke's printing of money to loan a no interest to the banks to prop up the equities market, produce bubbles in the commodities markets, inflate prices and debase the currency isn't questioned?

Why aren't the tax and treaty policies of the New World Order/globalization which have shipped jobs overseas to sweatshops questioned?

Why isn't the USA's role as muscle for the New World Order/globalization in the Middle East questioned, with Americans dying to make Iraq and Afghanistan safe for foreign investment and resource extraction?

Socialism? More like looting by the financial oligarchy, with a few scraps to the rest of us.

Why haven't the massive fra... (Below threshold)
Hank:

Why haven't the massive frauds in mortgage securitization been prosecuted by Obama's DOJ?

Because it leads back to the democrats.

"Why isn't the USA's role a... (Below threshold)
GarandFan:

"Why isn't the USA's role as muscle for the New World Order/globalization in the Middle East questioned, with Americans dying to make Iraq and Afghanistan safe for foreign investment and resource extraction?"

Awful "selective" there Chico. What about your Obamassiah's "volunteering" US forces to attack Libya. Or is this some kind of Democratic/Progressive 'nuance'?

Wasn't it the left that kep... (Below threshold)
SCSIwuzzy:

Wasn't it the left that kept saying we should focus on Afghanistan?

Jennifer ...actual... (Below threshold)
Jeff:

Jennifer ...

actually if its inflation you are worried about (assuming you can keep your job if it spikes) then paying off mortgage or car debts is the worst thing you can do (assuming your payments are not idexed to inflation as most debts aren't) ...

thats the pain of inflation ... assets rise, dollars don't ...

What about your Obamassi... (Below threshold)
Chico:

What about your Obamassiah's "volunteering" US forces to attack Libya.

Right, Libya, too. Thanks for reminding us. So three wars, all in resource-rich countries, for the New World Order.




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