Friday, 22 July 2011

Obama's Letter to Americans: Stand Behind Efforts to Raise Debt Limit

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President Obama’s open letter to the American people published yesterday in USA Today challenges them “to do something big and meaningful" and stand behind his efforts to raise the debt ceiling.

This debate [over the debt ceiling] offers the chance to put our economy on stronger footing, and [to] secure a better future for our children. I want to seize that opportunity, and [to] ask Americans of both parties and no party to join me in that effort.

Obama's letter is carefully crafted to persuade the average reader that the country’s present perilous financial condition was not caused by the Ruling Class at all but by all citizens working out their daily lives. Says the President, “For years now, America has been spending more money than we take in. The result is that we have too much debt on our nation’s credit card.…” [Emphasis added.]

Most Americans are in fact prudent with their finances. One-third of Americans own their homes free and clear of any debt. And 85 out of 100 Americans hold jobs and are making their careers even through the most difficult circumstances in recent memory. It is the federal government and not the citizens that has run up the tab on the national credit card, with the help of the Federal Reserve and the Chinese and other central banks.

The President laments that things are so bad that if something isn’t done, the government will be “unable to invest in things like education…or protect vital programs like Medicare.” But nowhere in his letter does the President consider that it’s outside of the government prerogatives to “invest” in such ventures, which is major cause of these current financial difficulties.

He then states that “neither party is blameless for the decisions that led to this debt, but both parties have a responsibility to come together and solve the problem.” In other words, the parties that brought us to this pretty pass are the ones to rely on to fix it!

But he’s really trying: “My No. 1 focus is getting our economy back to a place where businesses can grow and hire.” Whether that’s the business of government he doesn’t say, but he has lots of ideas about how to accomplish it, including ideas that haven’t worked in the past, such as “putting construction workers back on the job rebuilding our roads and highways.” Where are all the jobs that previous spending programs were supposed to create? Weren’t there millions of “shovel-ready” jobs just waiting for government funding? And once again, where is the authorization in the Constitution to do any such thing in the first place?

He also wants to “extend…tax relief for middle-class families,” no doubt by cutting temporarily the withholding taxes now levied on the working class. But if this is a good idea, why doesn’t it apply also to the creators of wealth, the entrepreneurs and the capitalists (the “wealthy") who took and are taking risks every day in order to build the economy? And who, by the way, are paying way more than their fair share of the tax burden.

But he’s willing to do some serious cutting of government spending. At least that’s what he says: “I’m willing to cut historic amounts of spending in order to reduce our long-term deficits. I’m willing to cut spending on domestic programs to the lowest level in half a century.” But how he will manage that while continuing to spend on infrastructure jobs he doesn’t say. In fact, his claim that he has offered to cut spending down to the Eisenhower era has been covered here but without any obvious intent to do any such thing.

But never fear — he’s willing to do what is necessary to rein in health care costs: “I’m willing to take on the rising costs of health care programs like Medicare and Medicaid, so we can meet our obligations to an aging population.” Note the wording of the President’s message: He’s wanting to reduce the costs of the programs, through further regimentation and restrictions to health care and further reducing payments to the service providers. The real way to cut health care costs, of course, would be to let the private market operate in providing those services, just as veterinarians do in the care of animals and pets. But he says nothing about that.

But he is ready to do what is necessary, even if his own party doesn’t like it: “Some of the [necessary] cuts would target worthwhile programs that do a lot of good for our country. They’re cuts that some people in my own party aren’t too happy about, and frankly, I wouldn’t make them if we didn’t have so much debt.” But the question has to be asked: Why weren’t the costs of establishing these “worthwhile programs” taken into account when they were established in the first place? Under the Bush administration the prescription drug program was added onto Medicare with little or no discussion of how those benefits were to be paid for. And of course the most glaring omission is any mention of the biggest health care disaster — ObamaCare — now expected to run up the national debt even further.

But the President is realistic. He notes that some suggested cuts are in programs of such insignificance that they shouldn’t even be bothered with, such as “getting rid of pet projects and foreign aid…those things represent only a tiny fraction of what we spend our money on.” On the other hand, tackling the deficits and the debt head-on with major cuts in the out-of-control entitlement programs will “end up costing seniors and middle-class families a great deal”:

Retired Americans will have to pay a lot more for their health care. Students will have to pay a lot more for college. A worker who gets laid off might not have any temporary help or job training to fall back on. At a time of high gas prices, we’ll have to stop much of the clean energy research that will help free us from our dependence on oil.

He fails to note in his letter that workers are not only going to pay more for health care because of the government’s determination to regulate it to death (no pun intended), but those same workers will soon discover that certain critical care (read: expensive) services will be denied them altogether, all in the name of keeping costs under control. And why should college educations be encouraged through the use of other people’s money, especially when the value of a college education continues to depreciate in this economy? And doesn’t “temporary help” (read unemployment insurance) guarantee that workers will stay out of the work force longer, until their benefits stop? And where does it say that the government should be involved in “clean energy research” anyway? Isn’t that the job of the private market as a result of its never-ending search for greater and more efficient energy supplies with sufficient profit margins to justify that search?

The answer to the deficit problem, according to the President, is a “balanced approach.” This always means increased revenues:

We should also ask the wealthiest individuals and biggest corporations to pay their fair share through fundamental tax reform.

Before we stop funding clean energy research, we should ask oil companies…to give up the[ir] tax breaks…

Before we ask seniors to pay more for Medicare, we should ask people like me to give up tax breaks they don’t need and never asked for.

The fact that the wealthiest already pay their fair share and more is borne out by this from the IRS: Individuals earning in the top one percent paid 40 percent of all income taxes, while those in the top 10 percent paid 71 percent of all income taxes. The fact that going after the wealthiest for even more isn’t going to generate significant additional revenues — certainly not enough to make a dent in the debt — isn’t mentioned by the President in his letter. And if Obama is so determined to be “fair”, why doesn’t he simply offer to write a check to the IRS for the part of his income that he feels he doesn’t deserve? He doesn’t say.

The President did get one thing right: The middle class is the target of any deficit-reduction plans likely to come out of Washington in the next few days: "It’s just not right to ask them to pay the whole tab — especially when they’re not the ones who caused this mess in the first place."

He’s right: The middle class didn’t create the financial crisis; the Ruling Class did. Instead, the middle class, by and large, just want to be left alone to work out their own lives. Whenever possible, they resist further government intrusions into their lives — witness the growth of the Tea Party — and are waiting to see if Washington will, for the first time in memory, not listen to the siren song of entitlement protection and class warfare being sung by the President, and instead ignore him and start some serious cutting back of Leviathan.

Perhaps what the President should be saying to the American people is what he said as Senator in railing against raising the debt ceiling back in March, 2006:

The fact that we are here today to debate raising America ’s debt limit is a sign of leadership failure. It is a sign that the US Government cannot pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. Increasing America’s debt weakens us domestically and internationally. Leadership means that ‘the buck stops here.’ Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.

What Americans deserve is a President who tells the truth rather than one who engages in inaccurate, disingenuous, and deceitful appeals to envy and entitlement. 

White House photo

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