The U.S. stock market has nose-dived. Congress just approved the highest debt ceiling in American history, allowing the government to carry over $16 trillion in national debt, and prompting the credit-rating agency Standard & Poor’s to downgrade America’s multitrillion-dollar debt for the first time in 70 years.
Unemployment is still over 9 percent. Private-sector businesses may have more than $1 trillion in cash, but they will be scared away from hiring or buying for as long as they fear new taxes, new regulations, new entitlement obligations, new plant shutdowns — or a new harangue.
America’s Gross Domestic Product is almost static. Every classical Keynesian remedy — massive government borrowing and spending (“stimulus”), near-zero interest rates, public works, expanded federal entitlements — has been tried and has failed; together they are turning a modest recovery into another recession. Neither the example of the socialist European Union nor that of big-spending blue-state America suggests that massive government spending and entitlements lead to collective prosperity.
In response to this depressing news, President Obama still offers the same predictably stale sermons: George W. Bush did it. The tea-party fiscal reformers are to blame. Government will fund “millions of green jobs.” Obama’s political opponents want to destroy Social Security and Medicare.
Imagine if President Obama simply stopped diverting blame and tried something different.
There are vast new finds of natural gas, oil, and tar sands offshore and in the American West, the Dakotas, Pennsylvania, New York, and Alaska. This natural wealth represents hundreds of billions of dollars of savings in imported-energy costs and millions of new American jobs. Instead of lecturing about tire pressure and car tune-ups and encouraging people to trade in clunkers, the president could rally the country to go all out right now to develop its burgeoning fossil-fuel resources to supply our needs while we wait for the development of future green energy.
Ever since he began campaigning for the presidency, Obama has hectored the private sector — talking nonstop of higher taxes, “spreading the wealth,” “fat cat” bankers, paying your “fair share,” “millionaires and billionaires,” “corporate jet owners,” and “unneeded” income.
Such share-the-wealth tirades were matched with redistributive vendettas. Vast new financial regulations and red tape followed. A new trillion-dollar health-care entitlement was imposed on employers. The National Labor Relations Board is attempting to shut down a new Boeing aircraft plant. The federal government took over private businesses — and on occasion reversed the order of payment to private creditors. New environmental regulations have curbed energy and agricultural production. Lifelong academics and government functionaries, not businesspeople, staff the Obama Cabinet and head the administration’s agencies.
But imagine if the president had instead promoted profit-making — by cutting red tape, praising entrepreneurs, promising no new taxes or burdens on businesses, and offering incentives to open new plants inside the United States. In other words, what if small businesses and large corporations believed Obama to be a friend and partner, a leader who wanted them to make big profits, hire millions of workers, and enrich the country in the process?
In the last three years, the president has increased the national debt by almost $5 trillion. But what if the president were to promise an end to the gargantuan spending and borrowing and were to accept the tax reforms and budget discipline offered by his own Simpson-Bowles Commission, but so far neglected by the administration?