Obama’s Looking at the US Economic Picture, Right?

By Caomhin

Obama keeps insisting that the economy is on the right track.  Think about that for a moment.  This is the man who swore that the unemployment rate would never reach 10% and that the jobs would come calling pretty damn quickly if his pork laden spending bill called the “stimulus” or “recovery” or whatever else they want to label it passed.  It didn’t produce jobs, but it sure made the deficit skyrocket.  He’s out there now saying that it was always a two year plan despite the fact that we were told that everything would implode if we didn’t pass the bill ASAP.  Here we are, are things much cheerier for you, your neighbors, friends, etc?  Of course they’re not.  Absent the spending bill, I have full faith that the recession would be ending much sooner and in much more dramatic fashion than when recovery actually comes, which it will.  It always comes, if we allow the market to work.  The problem, of course, is that such overreaching and substantial market interference by the Administration is going to slow down and distort recovery, all while he keeps insisting things are fine, but are they really?  Do you feel that they are better than you did in January when he took office?

Let’s take a gander at some of the news off the wires today.  First up, let’s take a snapshot at our nation’s current deficit:

The U.S. recorded a federal budget deficit of $94.3 billion in June, pushing the cumulative deficit so far this year to a record $1.08 trillion, the Treasury Department reported Monday.

At this time last year, the cumulative federal budget deficit was just $285.8 billion.

The Obama administration expects a deficit of $1.84 trillion for the full fiscal year, which ends in September. However, that number is likely to be revised higher later this month, since the economy has been much weaker than when the original estimate was made.

You can distinctly recall the media going absolutely bonkers over the deficit for years under President Bush, as many of us did as well.  It is always solid policy to minimize and eliminate debt, but some levels of deficits can in certain circumstances be beneficial, as Alexander Hamilton has taught us.  We all wanted the deficit to be reduced.  Now, a year later, the $285.8 billion deficit has nearly quadrupled, and yet, how often do you hear the media attacking Obama over this?  There should be a TREMENDOUS outcry over this runaway and unsustainable deficit. You’ll also notice he EXPECTS a $1.84 trillion deficit which in fact, will be much, much higher, as even he was forced to admit his stimulus was a catastrophic failure in job creation and that unemployment will grow for MONTHS.

Let’s glance at some more news out today.  Remember when I (and countless others) were warning about a coming spike in inflation that was going to come as a result of a loose monetary policy coupled with flooding the market with dollars?  Of course you do, and once upon a time the media did too, when they actually cared about doing their jobs as opposed to being partisan hacks.  Have a look at the Producer Price Index:

U.S. producer prices rose 1.8% in June, beating economists’ expectations, the Labor Department reported Tuesday. It was the biggest increase since November 2007. Excluding volatile food and energy prices, the index was up by 0.5% in June. Economists surveyed by MarketWatch were expecting producer prices to climb by 1.2% in June.

What that equates to is higher prices that will undoubtedly be passed along to consumers.  When the PPI beats expectations, it’s not a good thing, it’s a bad thing, and the higher the spread, the worse the news is for businesses and consumers.  It appears the effects of the “stimulus” are being felt in other ways that will impact us, but not in a positive way.  With the average work week shrinking, equating to lower paychecks, virtually no one receiving increases in base pay, and an increase in the cost of goods, what effect do you think that will have on the economy as whole, especially for people on the lower end of the spectrum?

Two other spending proposals, which at this point equate to nothing more than throwing a ton of money on a credit card, were also introduced today by the Administration.  $27 billion in funding for community colleges and a plan to allow homeowners who are forced into foreclosure to “rent” their houses as they revert ownership to the bank.  Ideas and sentiments can be noble in theory and have the best intentions but result in complete disaster.  Thus far the Administration has not displayed honest and true intentions, but rather political games designed to score votes and savagely attack their opponents as opposed to being a statesman.  He has done virtually no analysis of the situations around him and into admitting they have “misread” things from the jump.  Even as they recognize their assessments are wrong, they have not slowed down to further analyze the situation to come up with a better fix.  Rather, like a spoiled child, they want what they want, when they want it, no matter what consequences be damned.  I suggest you read this piece in the Wall Street Journal for even more perspective on what we’re up against.

There are thing we can afford to do and things we can not afford to do, and while we, the average citizen, agonize when we’re forced to put a $50 grocery bill on our credit card, Obama and his administration roll out plans on a monthly basis that can be measured in fractions of trillions of dollars without second thought.  We’ve become so desensitized to him in six months that I’m betting when you read about the $27 billion in funding for community colleges you didn’t even blink and didn’t click on the link at all.  We have a problem, and whether Obama, the media, or even we ourselves care to admit it, it’s going to have to be dealt with and quickly.

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