Palo Alto — Barack Obama is the Barry Bonds of Big Government. He offers America liberalism on steroids. While he earns grand slams for spending and debt, his pitiful results constitute strikeouts.
In an address to the Hoover Institution here last Monday, Stanford University economics professor Michael Boskin detailed President Obama’s truly historic profligacy.
Under Obama, federal spending has risen from 20.7 percent of gross domestic product to 25.3 percent, Washington’s largest slice of apple pie since 1945. In fiscal year 2011, which ended September 30, Uncle Sam spent a record $3.6 trillion, up an inexcusable 4 percent since FY 2010. So much for Obama’s demands for “shared sacrifice.”
Obama’s spend-o-rama includes federally funded green jobs that Boskin dismisses as “the leprechaun economy.” The apotheosis of this blarney was last month’s $1.2 billion Energy Department loan guarantee to SunPower Corporation of Richmond, California. Its solar-equipment project promises 15 permanent positions. Cost per job-created: a staggering $80 million.
Even worse, if possible, the Fox Business Network’s Gerri Willis reports that SunPower received this federal largesse even though its share price has plummeted 93.5 percent — from $133.61 (its Dec. 7, 2007, peak) to $8.09 on September 30, when it won Energy’s loan guarantee. SunPower’s market capitalization stood at some $800 million, just below its $820 million debt. SunPower released an earnings warning after scoring this federal subsidy. The company also faces a class-action lawsuit in which investors claim that it has made false public statements.
Would you invest in SunPower? You already did!
You can’t make up this stuff !
This kind of fiscal recklessness helped swell FY 2011’s federal deficit to $1.298 trillion, just ahead of FY 2010’s $1.294 trillion in red ink, though behind FY 2009’s record $1.416 trillion. Obama has authorized three consecutive trillion-dollar deficits. Now he demands another $447 billion for Stimulus, Jr.
All of this, Boskin observes, has pushed the federal debt to 67 percent of gross domestic product, the highest since the aftermath of World War II. No wonder Standard & Poor’s downgraded America’s sovereign debt last August 5 — another first.
Obama’s milestone-setting expenditures would be bad enough if they were the spectacularly high price for restoring prosperity. Instead, Obama has impoverished the Republic — for nothing.
Only 58.1 percent of the population is working, the lowest level since 1983, notes Boskin, chairman of Pres. George H. W. Bush’s Council of Economic Advisers and a Hoover senior fellow. Among America’s 14 million unemployed citizens, a record 45.9 percent have been jobless for more than 27 weeks.
Boskin compared snapshots of Obama’s and Pres. Ronald Reagan’s post-recession recoveries, 27 months after each downturn hit bottom. In September 2011, on Obama’s watch, non-farm payrolls had grown 0.6 percent, yielding 841,000 jobs since June 2009. Under the tax-cutting, business-boosting Reagan, non-agricultural employment swelled 8.7 percent, generating 7.7 million new jobs.
In January 2009, economists Jared Bernstein and Christina Romer (Boskin’s Obama administration counterpart) predicted that if Obama’s stimulus passed, “the unemployment rate in 2010Q4 is predicted to be approximately 7.0%, which is well below the approximately 8.8% that would result in the absence of a plan.”
In fact, Obama signed his $840 billion stimulus . . . and unemployment rocketed upward anyway. It peaked at 10.1 percent and now seems stuck at 9.1 percent. Boskin calculates that this 2.1 percent gap between Team Obama’s 7 percent fantasy and the cruel 9.1 percent reality that they perpetrated equals 16 billion foregone work hours. Even if one accepts the White House’s argument that the stimulus somehow “created or saved” 3 million jobs, that equals $280,000 per position — nearly quintuple the $58,510 that an average private-sector employer spends to hire a new employee.
This stagnation now finds 51 percent of Americans too poor to pay federal income tax (a modern record) while 47 percent of Americans receive at least one form of federal transfer payment (an historical high), as dependency on the ever-expanding state expands.
Obama’s stack of bills, Boskin predicts, means higher taxes — and soon. To underwrite Obama’s deficits (as well as those racked up by free-spending, left-wing Republican Baby Bush), top California earners, for instance, could see combined federal and state income and payroll taxes total 70.8 percent of income by 2016. Those earning just $60,000 could pay 52.4 percent to Washington and Sacramento. Non-Californians also should anticipate higher taxes.
“A CEO who got it wrong this many times would be gone by now,” Michael Boskin concluded. Instead, Obama barnstorms campaign events, barks at the rich, and bellows for further federal outlays.
While Americans are stuck in the employment minor leagues, Barack Obama is bound for the Unlimited-Government Hall of Fame.
— New York commentator Deroy Murdock is a nationally syndicated columnist with the Scripps Howard News Service and a media fellow with the Hoover Institution on War, Revolution and Peace at Stanford University.
editor’s note: This article has been amended since its initial publication.