WILLIAM W. BEACH
The president wants an economy that’s built to last, as he said repeatedly in tonight’s State of the Union speech. However, among the litany of programs he announced, he promised little action on the driver of economic decay: the blooming debt of governments at all levels, but particularly the government that President Obama runs. Total government debt is chewing away at innovation and economic growth by squeezing credit markets for private borrowers; it is spreading fear and uncertainty among investors about this country’s future; and it is condemning an entire generation to an economic life well below their potential.
If you are under 30 years of age, you belong to the Debt-Paying Generation. This enormous, growing federal debt will have to be repaid across your lifetime. Higher taxes will almost certainly be imposed to pay down this debt, thus reducing your income and increasing your cost of living. You are likely to marry later, as you will have trouble saving up to start a family. If you marry later, you are likely to have fewer children, which further hurts the economy by reducing the future labor force. Higher interest rates from higher federal debt will mean that the Debt-Paying Generation will start their home mortgages later in life, which may mean that they will never own a home. A slower economy means not only slower income growth for the Debt-Paying Generation, but also less savings for retirement, education, and health care.
The real tragedy of the president’s litany of economic-policy changes is its failure to address federal debt. Why? Simple: The failure to reduce debt condemns an entire generation to the least prosperous life in U.S. history relative to the generation that preceded it. That’s not the way to build an economy that lasts.
― William W. Beach is director of the Center for Data Analysis at the Heritage Foundation.
JAMES C. CAPRETTA
Let’s hope Republicans everywhere took the time to listen to Governor Mitch Daniels’ Republican rebuttal to the president’s state of the union address.
It was a masterpiece. Concise, direct, optimistic, and tough. It framed the issues facing this country exactly as they need to be framed. He pulled no punches, going directly at the president for his failures on promoting growth and for exacerbating rather than solving the nation’s mounting debt crisis. And, unlike other Republicans, he forcefully articulated why a strategy of “taxing the rich” within the current tax code is a dead-end of slower growth and fewer jobs.
By contrast, President Obama’s speech was an exercise in misdirection, intended to create the impression that he has a plan for growth and solvency, when in fact the policies he trumpeted in earlier years have either done little to solve the problems or made them demonstrably worse.
As Governor Daniels said, this year is a crucial one for the nation. While he won’t be at the top of the national ticket, he can still make very valuable contributions to the effort, as he did tonight by giving us the kind of language that can help win the public argument.
— James C. Capretta is a fellow at the Ethics and Public Policy Center. He was an associate director at the Office of Management and Budget from 2001 to 2004.
President Obama’s State of the Union address presented his top priorities for the coming year: mandates, regulations, taxes, and spending.
Ladies and Gentlemen, tighten your seatbelt, because the era of big government isn’t over.
We got it all: the troops, the children, goods made in America — clean energy and cars alike — the middle class, Buffet’s secretary, safe food, clean water, and college for all.
And unlike last year, the president didn’t have a Sputnik moment.
But if there were ever a time to get outraged and be completely and totally disgusted, that time is now.
After running up the three largest deficits in U.S. history (President Bush shares some responsibility for the deficit, of course, but Obama is the president now and has been for almost four years), adding $4.6 trillion to the national debt and failing to fulfill his promises about the recovery, and bailing out homeowners, car companies, banks and many others, the president made no real mention of the need to seriously reduce government spending. Worst, after the United States got downgraded last summer, after witnessing the consequences in Europe of decades of government spending, the president made no real efforts to address the idea that Social Security, Medicare, and Medicaid need to be reformed. Instead, the president promised that he would double down on the policies that have failed us in the last three years.
The president repeated a few times tonight that the United States isn’t in decline (voters disagree with him, by the way). But his denial shouldn’t distract us from what needs to happen. Entitlement programs must be reformed — so that we stop pushing more debt onto our children; so that our credit rating doesn’t get downgraded again; so that we continue to attract capital into the U.S. (and not just because the EU is in terrible shape).
As for Governor Mitch Daniels’ response: I liked much of what I heard. But I have to ask: Would mention of reforming entitlements have taken place if he was running for president or if the response to the SOTU had been given by Romney, Gingrich, Boehner, or Cantor?
— Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University.
In President Obama’s State of the Union message, he expressed his vision for the future: We need bigger government, and more of it should be paid for by rich people.
Specifically, the president suggested greater federal involvement in manufacturing, bank lending, education, clean energy, and medical research, among other areas. And the top 2 percent, he said, need to pay higher taxes to help fund it all.
In style, the president’s speech was smoother than his past State of the Union addresses — no snub of the Supreme Court this time, and no dwelling on expensive extras, such as high-speed rail. But his constant assumption was that more government control means better lives for almost all Americans.
Has this approach worked so far? If it had, President Obama would have asked the question Ronald Reagan asked in the 1980 campaign: “Are you better off now than you were four years ago?” In January 2009, unemployment was 7.6 percent; now it is 8.5 percent. The national debt then was $10.6 trillion; now it is $15.2 trillion — almost a 50 percent increase. The Community Reinvestment Act failed; the stimulus package failed; Solyndra, the solar-panel company, failed. And if more than 40 percent of Americans pay no income taxes, how can it be “fair” to ask others to pay more?
In conclusion, President Obama wants us to focus on his promises, not his results.
— Burton Folsom is professor of history at Hillsdale College and, with Anita Folsom, co-author of FDR Goes to War.
There is always something surreal about a Chicago politician talking about “fairness” and “playing by the rules.” There is something even more bizarre about a president talking about the need to expand energy production after his administration has generally undermined significant progress in facilitating energy development for three years in the middle of a recession. And who would describe Detroit as “on the way back”? A stroll down the ghost town otherwise known as downtown Detroit — which is teetering on the edge of being put into administration — would suggest the opposite. It’s not often that I agree with very much said by the New York Times’s Maureen Dowd, but this State of the Union speech illustrated that the lady was dead right in describing the Obama presidency as a bubble within a bubble.
Who, after all, would use the slogan of a bailed-out car company — “built to last” — as a cornerstone theme of an address ostensibly about rebuilding the American economy? Government bailouts are, incidentally, a classic example of breaking the rules: i.e., that an insolvent business should be wound down rather than propped up by the federal government (which itself is wallowing in debt). “It’s time,’ the president said, “to apply the same rules from top to bottom: No bailouts, no handouts, and no copouts.” That sounds like the rhetoric of the Tea Party. But would anyone say that this has been the practice of the Obama administration? Solyndra, anyone?
A mixture of hot air, populism, contradictory promises, a disturbing stress upon yet more executive orders, an unseemly hectoring of the legislature by the executive branch — it must be election time.
— Samuel Gregg is research director at the Acton Institute. He is the author of several books including On Ordered Liberty, his prize-winning The Commercial Society, Wilhelm Röpke’s Political Economy, and his forthcoming Becoming Europe: Economic Decline, Culture, and America’s Future.
VICTOR DAVIS HANSON
This was a 2012 campaign speech poorly disguised as a State of the Union Address. But mostly, it was incoherent.
How far we have come in this mishmash from seas rising and temperatures cooling! Obama took credit for things that happened over his opposition, kept silent about his failures (especially the debt), omitted his “successes” (Obamacare) and largely made things up as he hoped and changed his way through. No one listening to Obama would ever dream that we are up to $16 trillion in debt, facing an implosion of Medicare and Social Security, and have a nonexistent housing market, high unemployment, and soaring gas and food prices.
Some details: The war on terror and Iraq are praised for having brought results, but unmentioned is that Obama once opposed all the very protocols and policies that he inherited — and now embraces.
September 2008 was just yesterday, frozen in amber as Obama’s talisman that wards off all responsibility for 2009–2012; the three-and-a-half years in between never happened.
The Democratic Congress’s $4 trillion-borrowing between 2009–2011did nothing; one year of a Republican House wanting a stop to the debt apparently means killing jobs.
The evil Chinese found a way to make things more cheaply than we did and must stop it.
Given soaring gasoline prices and Solyndra, green was sorta then, and natural gas is sorta now. So Obama takes credit for oil and gas production, but to do so shamelessly must tell untruths: Gas production is up only because of someone else’s private genius utilizing fracking and horizontal drilling — in spite of Obama’s cutting back on 40 percent of federal leases, EPA bullying, cap-and-trade utopianism, and his administration’s canceling things like Keystone — and gasoline demand is down because his economy has been so bad the last three years.
Wall Street greed must be watched. That’s why Obama has hired three straight Wall Street multi-millionaires who made their fortunes on Wall Street — much of it from the Freddie/Fannie bubble he serially faults others for.
Losing millions of jobs between 2009–12 was all Bush’s fault, gaining back less than half of them was all to the credit of Obama.
If the Hoover Dam is now Obama’s model, then canceling the massive Keystone Pipeline was his missed chance.
Every corporation must pay their fair share — perhaps even non-income-tax-paying Obama pal GE’s Jeffery Immelt?
Schools should be much more flexible — that’s why Obama opposed charter schools and backs teachers’ unions. Dropouts drop out not on their own volition, but because they can’t stay on the premises and therefore won’t be allowed out until they turn 18.
Obama wants job training instead of unemployment entitlements, but that’s why he vastly expanded the latter.
Outsourcing is bad, but we brag on a globalized Siemens when it outsourced European jobs to hire Americans. Somehow Wall Street (without help from Fannie and Freddie insiders and incompetent or risk-taking buyers) forced houses on the innocent who did not know what they were doing.
Illegal aliens somehow dropped in; none willingly broke the law getting or staying here.
Cutting deficits is critical; that is why Obama ran up $6 trillion in four years.
A man who tried to prevent up-and-down votes while was a senator no longer likes that as president.
Reaching out to Syrian dictator Assad and restoring diplomatic relations with him was part of the Obama plan to see him gone.
Reset with Iran was then, threatening it is now.
The worst relationship in history with Israel is really the strongest.
Massive defense cuts are proof of a brilliant Obama new strategic reassessment.
And on and on, with not a word about looming financial insolvency and a ruined health-care system. In Obama’s peasant idea of a limited good, a few bad guys get ahead only by ensuring lots of good guys don’t.
One bright note: In a brief, matter-of-fact rebuttal, Mitch Daniels said more in ten minutes than Obama did in over an hour — in over three years, in fact — and more than all the Republican candidates have said in four months.
— Victor Davis Hanson is a classicist and historian at the Hoover Institution, Stanford University, and the author of the just-released The End of Sparta. You can reach him by e-mailing [email protected]
The president’s State of the Union Address contained the usual list of uncontroversial, small-bore ideas. It also contained some surprisingly good rhetoric, such as this passage: “Millions of Americans who work hard and play by the rules every day deserve a government and a financial system that do the same. It’s time to apply the same rules from top to bottom: No bailouts, no handouts, and no copouts. An America built to last insists on responsibility from everybody.”
If only President Obama really believed that. In the very same speech, he defended his administration’s past bailouts and handouts, and called for more.
But the real thrust of the speech came at the end, when Obama made his pitch for such ideas as higher taxes on the wealthy and a reorganization plan for the federal government. Once again, the current president invited comparison with Franklin Roosevelt.
In 1937, with his tax and regulatory policies kicking in to trigger another sharp economic downturn, President Roosevelt resorted to two main arguments to defend himself: (1) greedy capitalists were sabotaging the economy, and (2) he still lacked the power necessary to advance his agenda in Washington.
Roosevelt prevailed with his court-packing scheme to intimidate the conservative Supreme Court into capitulating on the constitutionality of Obamaca . . . – er, I mean the New Deal. But Roosevelt’s other initiative, a reorganization plan designed to increase his power vis-à-vis the Congress, didn’t fare so well. Led by Republican senator Arthur Vandenberg of Michigan and Democratic senator Josiah Bailey of North Carolina, among others, a bipartisan coalition arose to defeat the bill in 1938. More than 100 Democrats crossed party lines to vote it down. That fall, Roosevelt suffered one of the worst midterm election defeats in American political history.
Now we have President Obama giving a State of the Union address in which he complains about undertaxed capitalists and calls for a reorganization plan that, no matter how attractive it may sound on the surface, is likely to transfer more power to the executive branch.
Who will challenge Obama’s politics of envy and block his latest grab for power? Who will play the role of Vandenberg or Bailey? Of the presidential candidates still auditioning for the part, none has yet proved he possesses the mix of personality and principle necessary to the task.
― John Hood is president of the John Locke Foundation, a public-policy think tank in Raleigh, North Carolina.
Three things struck me about President Obama’s lengthy State of the Union address. First, this concept of “an economy that’s built to last” is a fatally flawed view of how an economy works. When market advocates talk about the economy, they discuss the economy in terms of its fluidity, its variability, or, most famously, its creative destructiveness. Obama’s view, in contrast, seems to be one of building a hard immovable structure, as if one could pin down a moving, breathing economy at one mythical point in time.
In addition, Obama devoted only 44 words out of 7,000 to his expensive and unpopular health-care law, his so-called signature achievement. He made the claim that “our health-care law relies on a reformed private market, not a government program,” which an AP fact check called only “half true.” Even that may have been generous. The law does in fact create a new program, with multiple new government bureaucracies to administer its subsidies, exchanges, and new insurance regulations.
Finally, I was distressed by the fact that the president mostly ignored our looming debt crisis, a topic Governor Daniels covered at far greater length in his significantly shorter remarks. The president can say all he wants that we can solve our problems if we would just work together, but he must first recognize the problems before that can happen.
— Tevi Troy is a senior fellow at the Hudson Institute.
While it took President Obama only five minutes into the State of the Union address before he started bashing the rich, Wall Street, and the Chinese, he actually muted his confrontational approach as compared with other recent efforts. Still, it was a typical overlong speech, overstating accomplishments and ignoring negatives. Five examples of the latter: he misstated and dramatically downplayed his failure to stimulate the economy, claiming 3 million new jobs when in fact employment is lower than when he took office.
Second, there was hardly a word about health care, given fierce public opposition to Obamacare.
Third, he spoke about student-loan debt before even mentioning the national debt, where he renewed his tired and empirically indefensible solution of taxing the rich.
Fourth, he announced the Defense Department would push clean energy and somehow we would produce lots of clean energy on federal lands, but ignored the damage created by bowing to environmental Know-Nothing policies that have nixed the Keystone pipeline project and other energy initiatives.
Lastly, he uttered not a word about the huge long-term unfunded liabilities arising from unsustainable entitlement commitments like Social Security and Medicare. In short, it was a tale full of sound and fury, signifying nothing.
— Richard Vedder directs the Center for College Affordability and Productivity, is an adjunct scholar at the American Enterprise Institute, and teaches at Ohio University.
HANS VON SPAKOVSKY
President Obama’s State of the Union speech reminded me of some observations made by past celebrities in politics and entertainment. Dean Acheson said that the first requirement of a statesman is to be dull, which is not always easy to achieve. President Obama certainly achieved that tonight.
His speech was a totally predictable mishmash of class warfare, requests for new taxes and fees, proposals for even more spending, and gross exaggerations — such as his claim that he had already agreed to $2 trillion in spending cuts when there has not been a single dollar cut from the budget. And the impending sequestration will make for drastic cuts in defense that threaten one of the government’s core constitutional duties: providing for the common defense.
Lucille Ball once said that when she heard the word “politician,” she immediately thought of chicanery. We certainly saw chicanery in the president’s speech when he blamed the mortgage crisis on regulators looking the other way while banks supposedly forced mortgages on poor, unsuspecting Americans. As we all know, however, the crisis was in large part caused by government regulators forcing banks to relax their standards in order to avoid false claims of racially discriminatory lending practices.
As was said of Robert Taft, President Obama has a positive genius for being wrong. He wants to “double down” on federal “investments” in clean energy. He has obviously learned nothing from the Solyndra fiasco that wasted half a billion dollars of taxpayer funds on “renewable” energy that is inefficient, expensive, and a financially irresponsible “investment.” And while he wants to drastically cut the defense budget, he actually bragged about the Pentagon spending money on clean energy, as if fulfilling his environmental fantasies should be the first priority of our military forces.
National Review’s founder, William F. Buckley Jr., described Eugene McCarthy as meticulously liberal: Never did he err in the direction of common sense when the alternative was to vote liberal. That is a perfect description of Obama. As an English conservative said, Obama will never realize that his kind of socialism is workable only in heaven, where it isn’t needed, and in hell, where they’ve already got it.
— Hans von Spakovsky is senior legal fellow and manager of the Civil Justice Reform Initiative at the Heritage Foundation.