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By: Wayne Brown
Well, here we go again. President Obama is declaring that he must address a joint session of Congress immediately in order to address the “urgent” needs of America for economic stimulus and job creation. Note the use of that word “urgent”. Remember the mantra of this administration…never let a good disaster go to waste. On that basis, one can bet that whatever the president puts forth in this speech will be so “urgent” that there will be no time for reasoning or consideration. It will be so urgent yet was not urgent enough that there was consideration given to calling Congress back in session early from the summer break. Urgency is a relative thing. I suspect if we dig deep enough we may find that the urgency has far more to do with “re-election” than any hardships the American people are currently enduring under this administration.
What could the President possibly have in mind in this new plan he promises to reveal. I can only speculate but I will promise that it will be an expensive proposition and far more so than the previous stimulus package of three years back. I estimate the President will ask Congress to appropriate between $1.3 and $1.8 trillion dollars for a second economic stimulus. This money will come from two sources: tax initiatives which will close writes offs and loopholes on both the wealthy and middle class to include home mortgage interest and property taxes, and, of course more “borrowed money”. Already the deficit spending for 2011 is projected at record levels. This program will drive that record beyond those projections.
The promise of all this new spending by the President will be job creation and improvements in overall economic conditions. I think it is likely that he will indicate that our position in 2020 financially will be the same or better with this proposed program as compared to following the downstream rate of spending cuts agreed to in the debt ceiling debate. That promise will be made on the back or more rapid economic growth as a result of the stimulus applied and by the expansion in the job market, all of course due to the actions of our great central federal government. In the short term, our national debt will jump by about $1 trillion dollars over the current level.
Remember, this is an “urgent” situation; therefore, Congress must act without thinking or questioning. The stage is set for yet another political drama. One does not have to look at what is playing out here very long to see the transparency. Obama proposes a new stimulus package which he touts as a plan that will save America. The Republicans oppose it and get labels assigned to them much like the Tea Party saw in the recent debt debate. Obama then campaigns on the promise of a plan that he was never able to implement because of the opposition. If the Republicans go along and agree to the plan, then Obama implements it slowly, even thought it was urgent, and touts his plan is in the early stages of working toward success as he approaches re-election. Either way, he does not have to run on his record which is rather dismal and unpopular at the present with American voters. One thing you can count on, there will be no promise of measurable progress until after the 2012 election cycle.
One might notice that I did not mention what might take place in the private sector of our economy during this time. I did that for a reason because I fear that nothing will be taking place. If Obama takes an approach such as I have outlined above, there will be no real reason for the private sector to respond. The tax situation for the future is foggy to say the least and will remain such it appears for the small business sector of America. The healthcare reform initiative still stands as an obstacle which is not and will not be addressed by this administration as it relates to the economics of private sector business growth. And finally, there is nothing to shore up consumer confidence to raise demand for goods and services. The promise of “government created” jobs will not do that. People are smart enough to realize that real jobs are created because there is a “business need” for them, not because the government had to money to bribe some sector into creating short term employment. Here again, we have a government attempting to fix a problem which is only resolvable by the private sector. Remember what happened when the government attempted to grow the housing market…damn near caused economic collapse.
Until we have a President willing to stand up in front of Congress and declare that it is time to knock down some of the regulation and environmental constraints to industry, we will not see any significant movement in the private sector. Until there is a resolution of the healthcare reform package, the private sector is going to remain highly cautious. Until there is significant progress made on gaining control of government spending, the private sector will remain cautious, conservative, and cash-fluid. No amount of government spending is going to shift that perspective nor will it cure the economy. In the end, the only effect will be more spending and more debt which spells more trouble for America.
Get ready, America. This speech by the President will be the opening act on new efforts to get the President re-elected. The promise of economic prosperity will be shouted at every bus stop the President makes in the future along with pointing out that his program is much better than the “status quo” of the right for it offers promise and hope for the masses. It is the one and only way we can hope to preserve our country for our children that their children’s children. Listen for the mantra…you’ll hear it.
This becomes Obama’s counter-weight to his dismal first term record. The opposition will certainly be pointing it out but the President will be out there touting his new plan as the singular element of the discussion which will be right for America. He will point out that the right has no plan except to cut spending and programs leaving Americans without any assistance from its government. Whether or not Republicans can weather those accusations is anybody’s guess at this point. Obama will not care because his campaign will be riding the wave of false hope. By the time that becomes apparent, he may well be into his second term. At that point, there will be no need to worry about a plan…it will be a waste of time.
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