On Wednesday, the Obama campaign released an ad showing the President explaining his economic plan for his next four years. Big promises with no detailed actions are the mainstay of the production, but we offer a viewer’s guide to put the rhetoric in perspective (video embedded as well).
Obama ad: “Table”
Today, I believe, as a nation, we are moving forward again.
Yesterday the Commerce Department released the second quarter gross domestic product numbers. The economy decelerated much faster than economists had predicted and durable goods orders dropped by the largest margin in three and a half years. If that’s forward, reverse is looking even better. (take the CDN interactive poll: Is the economy getting better)
Now, Governor Romney believes that with even bigger tax cuts for the wealthy and fewer regulations on Wall Street, all of us will prosper. In other words, he’d double-down on the same trickle-down policies that led to the crisis in the first place.
The housing bubble and certain bust was not caused by tax rates on the rich or a lack of government intervention in the economy. Bad mortgages that banks were forced to make to those that could not pay them was the underlying issue. Having agencies that operated under Congressional oversight back those bad loans fueled the issue into a nightmare. To mitigate bad risk pushed on them by the democrat-pushed Community Reinvestment Act and the failed social policies it represents, financial institutions packaged portions of bad loans with good into mortgage-back securities. Had the bad loans not been forced on banks in the first place, the bubble would not have been so deep and the recession would either have been shallow or non-existent. It is government over-reach that caused the crisis – not the rich, free market policy or a lack of regulation.
- Create a million new jobs
- Help businesses double their exports
- Tax breaks for companies that invest in America
- Produce more American energy
- Clean Coal
- Natural gas
- Double fuel efficiency of cars
- Create the best work force in the world
- Hire 100,000 math and science teachers
- Train 2 million Americans with job skills
- Cut the growth of tuition in half
- Increase student aid programs
- Reduce the Deficit by $4 Trillion over ten years
- Use half the savings from the Afghanistan draw-down to pay down the debt
- Use the rest for “nation building” at home
- Ask the wealthy to pay more
#1 Create a million new jobs
Obama says that the government will help businesses double their exports and give tax breaks to those companies that invest in America. Tax breaks were given to businesses for hiring during Obama’s first term. This practice was ineffective because it was temporary, too small and based on an incentive that businesses didn’t need. Businesses hire when they need to produce more product, conduct more research or otherwise expand. Government over-regulation, Obamacare, the threat of other taxes being increased and an unstable economy prevent hiring. A craptastic deduction isn’t going to change that.
If Obama had led the way to reduce the amount of time, effort and money businesses had to spend dealing with government rules they would naturally apply those resource to growing their businesses. As Reagan once said, “Government is not the solution, government is the problem.”
No specifics were given as to how the government would double exports. The Obama administration has not been a force helping American businesses in foreign markets or global competition. Our corporate tax rates are the highest in the world and an unfair burden in the global marketplace. Under Obama’s leadership, the United States has dropped to #7 in economic competitiveness from #1 during the last administration. America has also slipped to 18th in the world in economic freedom.
From the President who didn’t feel it necessary to meet with his own jobs council even once during his first term, details may be difficult.
#2 Produce more American Energy
The Obama administration has been the most hostile to conventional energy sources since Jimmy Carter. Gas is more than $3 more expense per gallon than at the start of his term, utility bills have skyrocketed (which he did say would happen under his plan), and groceries are costing Americans much more – all due to increased energy costs.
Being firmly in the way of the XL pipeline, limiting offshore drilling while giving money to South America to drill off of their coast, bad loans to failing renewable energy companies, using regulation to choke the coal industry and poor handling of the BP spill seemed the foundation of the Obama energy plan in his first term. With no re-election to worry about, why should voters think that he will do much of anything else?
#3 Create the best workforce in the world
Simply hiring 100,000 teachers will not create a more educated workforce. Our entire education system is in dire need of an overhaul. The system simply churns out kids, caters to the lowest-common denominator and rewards ineffective teachers as much as effective ones. Teachers unions have been effective at keeping their membership and dues at their desired levels by making bad teachers difficult to fire and great teachers impossible to reward. In true socialistic fashion, success is suppressed from a simple lack of reward.
The President’s plan offers no actions that will “slow the growth of tuition”. Will he cut professor and staff salaries? Will he reduce the cost of buildings or the cost of their maintenance? Will he reduce the availability of classes? Wishing for a thing does not make it so. Obama’s plan to make more government education subsidies and assistance availability will only increase the cost of secondary education. More dollars chasing fewer goods .. sound familiar? The tuition bubble is the fault of too much government intervention. We either have to accept higher tuition or less government inflationary pressure. He can’t have it both ways unless price controls are put in place – then the government will have to decide who can or cannot go to college when the seats are rationed.
Obama has no specifics on how to improve the education system, he simply says we need more of the same – a lot more.
#4 Reduce the Deficit by $4 Trillion over ten years
The President relies on the end of the war in Afghanistan to pay down the deficit. The total cost of the Afghanistan war, over ten years, has been less than $600 billion dollars. Obama says that half the savings will go to the deficit. That would be, optimistically, $300 billion if the war ended today. That isn’t even close to the $2 trillion that would be required to supply half the deficit reduction the President has promised. He also assumes that no other major military action will be ordered under his leadership. Obama’s pushing back into Afghanistan, attacking Libya, drone strikes in Syria and other middle east nations and who knows how many other “kinetic military actions” or “overseas contingencies” will be required to respond to “man made disasters” in the second term, it is difficult to understand the math proposed by Obama.
Obama promised to cut the deficit in half during his first term. He has done precisely the opposite while not managing to get a budget passed even when his party held the majority in both houses of Congress. The Senate, who has the responsibility to craft a budget, is still led by Democrats and has yet to pass a budget under Obama’s leadership. The President failed to lead on the findings of his own Simpson-Bowles deficit commission enacting exactly none of their recommendations.
Obama ends the video saying that “it’s time for a new economic patriotism” – sounds a lot like, get ready for Obama’s new normal – 1% or less GDP growth, high unemployment and skyrocketing numbers of Americans on government assistance. Several democrats have referred to their tax the rich proposals as helping the wealthy be more patriotic. Perhaps that what Obama means with this new term.