Townhall – By Michael Reagan
President Obama’s State of the Union address said more about the state of his approach to governing than it did with the present condition of this nation under his governance.
It was an uninterrupted march of platitude upon platitude, with nary a solution offered to any of the problems facing the United States.
As anyone with one cent’s worth of intellect understands, the United States is not only broke, but up to its thinning hairline in debt to — of all places — China, which despite its communist government is acting more like a capitalist regime than an old Moscow-style dictatorship…
For the most part, the speech was his attempt to disguise his quasi-socialist agenda as being an approach to political and social moderation — not an easy task for a chief executive who has just shoved a version of socialized medicine down the throats of the American people.
With the sole and surprising exception of CNN, which unlike the other networks chose to broadcast the Tea Party response delivered by Rep. Michele Bachmann, R-Minn., the president’s speech went mostly unchallenged.
Rep. Paul Ryan, R-Wis., spoke for his party but his remarks were lukewarm compared to those of Rep. Bachmann, which cut right to the heart of the Marxist aspects of the president’s address.
Needless to say, it wasn’t the president’s speech which raised the ire of the so-called mainstream GOP, but Rep. Bachmann’s well-aimed barbs…
CBO Director’s Blog
The United States faces daunting economic and budgetary challenges. The economy has struggled to recover from the recent recession: The pace of growth in output has been anemic compared with that during most other recoveries and the unemployment rate has remained quite high.
Federal budget deficits and debt have surged in the past two years, owing to a combination of the severe drop in economic activity, the costs of policies implemented in response to the financial and economic problems, and an imbalance between revenues and spending that predated the recession.
Unfortunately, it is likely that a return to normal economic conditions will take years, and even after the economy has fully recovered, a return to sustainable budget conditions will require significant changes in tax and spending policies.
This morning CBO released its annual Budget and Economic Outlook. I will discuss the economic outlook first and then turn to the budget outlook.
CBO expects that production and employment will expand in the coming years but at only a moderate pace, leaving the economy well below its potential for some time. We project that real GDP will increase by about 3 percent this year and again next year, reflecting continued strong growth in business investment, improvements in both residential investment and net exports, and modest increases in consumer spending.
But we have a long way to go on the employment front. Payroll employment, which declined by 7.3 million during the recent recession, rose by only 70,000 jobs, on net, between June 2009 and December 2010. The recovery in employment has been slowed not only by the slow growth in output but also by structural changes in the labor market, such as a mismatch between the requirements of available jobs and the skills of job seekers.
We estimate that the economy will add roughly 2.5 million jobs per year over the 2011–2016 period, similar to the average pace during the late 1990s. Even so, we expect that the unemployment rate will fall only to 9.2 percent in the fourth quarter of this year, and 8.2 percent in the fourth quarter of 2012. Only by 2016, in our forecast, does it reach 5.3 percent, close to our estimate of the natural rate of unemployment.
CBO projects that inflation will remain very low both this year and next, reflecting the large amount of unused resources in the economy, and will average no more than 2.0 percent a year between 2013 and 2016…
To prevent debt from becoming unsupportable, the Congress will have to substantially restrain the growth of spending, raise revenues significantly above their historical share of GDP, or pursue some combination of those two approaches.
The longer the necessary adjustments are delayed, the greater will be the negative consequences of the mounting debt, the more uncertain individuals and businesses will be about future government policies, and the more drastic the ultimate policy changes will need to be.
But changes of the magnitude that will ultimately be required could be disruptive. Therefore, Congress may wish to implement them gradually so as to avoid a sudden negative impact on the economy, particularly as it recovers from the severe recession, and so as to give families, businesses, and state and local governments time to plan and adjust.
Allowing for such gradual implementation would mean that remedying the nation’s fiscal imbalance would take longer and therefore that major policy changes would need to be enacted soon to limit the further increase in federal debt.
CNS News – By Matt Cover
The Congressional Budget Office (CBO) reports that Social Security will effectively run a $45-billion deficit in 2011 and continue to run deficits totaling $547 billion over the coming decade.
The admission comes in the CBO’s semi-annual economic review that projects federal spending, debt, and economic growth. In the report, the CBO also examines the impact of projected economic performance on the trust fund that nominally funds Social Security.
“Excluding interest, surpluses for Social Security become deficits of $45 billion in 2011 and $547 billion over the 2012–2021 period,” the CBO reported.
This means that in order to pay benefits Social Security will need $45 billion more than it will collect in payroll taxes this year, and $547 billion more over the next decade.
The “interest” the CBO mentions is the interest that the federal government owes to the Social Security trust fund because the trust fund is legally obligated to take Treasury bonds – federal government debt – in exchange for the cash revenues raised by Social Security payroll taxes.
The CBO uses the interest payments on the bonds to account for the difference between what Social Security collects in taxes and what it pays out in benefits, if benefit payments exceed tax receipts.
Normally, payroll taxes are used to pay current Social Security benefits, with any excess revenues being exchanged for Treasury bonds. Because the Social Security trust fund is populated with these bonds, the federal government essentially owes interest on those bonds to itself, providing the CBO with another apparent source of revenue for the funds…
By Sarah Palin
The President’s State of the Union address boiled down to this message: “The era of big government is here as long as I am, so help me pay for it.” He dubbed it a “Winning The Future” speech, but the title’s acronym seemed more accurate than much of the content.
Americans are growing impatient with a White House that still just doesn’t get it. The President proves he doesn’t understand that the biggest challenge facing our economy is today’s runaway debt when he states we want to make sure “we don’t get buried under a mountain a debt.” That’s the problem! We are buried under Mt. McKinley-sized debt.
It’s at the heart of what is crippling our economy and taking our jobs. This is the concern that should be on every leader’s mind. Our country’s future is at stake, and we’re rapidly reaching a crisis point. Our government is spending too much, borrowing too much, and growing too much. Debt is stifling our private sector growth, and millions of Americans are desperately looking for work.
So, what was the President’s response? At a time when we need quick, decisive, and meaningful action to stop our looming debt crisis, President Obama gave us what politicians have for years: promises that more federal government “investment” (read: more government spending) is the solution.
He couched his proposals to grow government and increase spending in the language of “national greatness.” This seems to be the Obama administration’s version of American exceptionalism – an “exceptionally big government,” in which a centralized government declares that we shall be great and innovative and competitive, not by individual initiative, but by government decree.
Where once he used words like “hope” and “change,” the President may now talk about “innovation” and “competition”; but the audacity of his recycled rhetoric no longer inspires hope.
Real leadership is more than just words; it’s deeds. The President’s deeds don’t lend confidence that we can trust his words spoken last night…
Despite the flowery rhetoric, the President doesn’t seem to understand that individuals make America great, not the federal government. American greatness lies in the courage and hard work of individual innovators and entrepreneurs. America is an exceptional nation in part because we have historically been a country that rewards and affirms individual initiative and offers people the freedom to invest and create as they see fit – not as a government bureaucrat does.
Yes, government can play an appropriate role in our free market by ensuring a level playing field to encourage honest competition without picking winners and losers. But by and large, government should get out of the way. Unfortunately, under President Obama’s leadership, government growth is in our way, and his “big government greatness” will not help matters.
Consider what his “big government greatness” really amounts to. It’s basically a corporatist agenda – it’s the collaboration between big government and the big businesses that have powerful friends in D.C. and can afford to hire big lobbyists. This collaboration works in a manner that distorts and corrupts true free market capitalism. This isn’t just old-fashioned big government liberalism; this is crony capitalism on steroids.
In the interests of big business, we’re “investing” in technologies and industries that venture capitalists tell us are non-starters, but which will provide lucrative returns for some corporate interests who have major investments in these areas.
In the interests of big government, we’re not reducing the size of our bloated government or cutting spending, we’re told the President will freeze it – at unsustainable, historic levels! In practice, this means that public sector employees (big government’s staunchest defenders) may not lose jobs, but millions of Americans in the private sector face lay offs because the ever-expanding government has squeezed out and crippled our economy under the weight of unsustainable debt.
Ronald Reagan said, “You can’t be for big government, big taxes, and big bureaucracy and still be for the little guy.” President Obama’s proposals last night stick the little guy with the bill, while big government and its big corporate partners prosper.
The plain truth is our country simply cannot afford Barack Obama’s dream of an “exceptionally big government” that may help the big guys, but sticks it to the rest of us.
“Obama intentionally did not mention gun control in his State of the Union, but aides say that in the next two weeks the administration will unveil a campaign to get Congress to toughen existing laws.” – Newsweek