“Obamanomics” – Turning America’s Economy Upside Down!

by Richard H. Frank

Today’s news that last week’s first time claims for unemployment reached 480,000 came as yet another unexpected event for the Department of Labor.  Furthermore, the economic forecast that unemployment will stand at 10.7% when we go to the polls in November illustrates the error and misguided judgment on the part of the Obama Administration.  The fiscal policy that we can spend our way out of recession and return to prosperity is not evident in cities, towns and states across this nation.

The only area showing growth in employment is within the massive Federal Government.  This year, Federal Government employment will exceed 2.15 million which is the highest level since 1992.  The 2011 fiscal year budget, currently before Congress, contains provisions for a 1.5% base wage increase across the board for federal employees and an additional 0.5% increase for logistical pay.  This flies in the face of all reason when average government employee compensation is almost double the private sector and the private sector continues to face further job losses which are directly the result of the Obama political agenda.

Keep in mind that the revenue stream needed to support this massive federal bureaucracy comes from the taxes imposed on the private sector and can only be sustained through tax increases or an increase to the national debt.

To borrow a line from the late Ernie Ford, “We get another day older and deeper in debt…” and “we owe our souls” to the Federal Government.

The President’s attempt to equate government spending control to the average American family tightening our belts shows just how naive he is.  America families cut out all “nice to have” things and lastly “must have things.”  The average family has long passed the “nice to have” and are now prioritizing the “need to have” budget items such as utilities, mortgages, etc.  It is time for our Federal Government to do the same.

The proposed 2011 Budget of $3.8 trillion has spending increases averaging 8% across the board and continues to include government-mandated health care as well  as projected revenues from cap and trade legislation, both of which are opposed by the majority of Americans.  Health care legislation provides for the creation of 162 new Federal agencies charged with administration of the program.  Both of these programs need to be scrapped and eliminated from the budget.  Congress has the power to do so and must act now.

The President’s claim that the budget has been gone through page by page and line by line in order to cut programs that are redundant or have proven ineffective is a prime example of having to “suspend disbelief” to accept this premise.  The American Federation of Government Employees will go down kicking and screaming before they will allow government jobs to be eliminated.

It is time for Congress to take an axe to the Federal Budget.  Across the board budget cuts of 10% are the only actions that will return the United States to solid economic principles and avoid eventual bankruptcy or worse.

If the Federal Government operated like any successful business in times of a downturn, they would immediately suspend all discretionary spending and impose budget cuts even if it meant layoff and permanent headcount reductions.

Ten percent of the 2011 budget equates to $380 billion.  Increases within specific agency budgets alone is projected at $48 billion.  Congress must eliminate these increases immediately and roll up their sleeves to find the remaining $332 billion in eliminations just as have families all across this Country in their personal budgets.

In my 46 year experience in the private sector, a business that continues to lose money or run a deficit will reach a limit of its ability to borrow from the banks.  When this happens, the banks demand that business prepare a workout plan, overseen by the banks, to turn the business around.  Should the business fail to perform, their creditors force them into bankruptcy.

I believe if we continue along the course of “Obamanomics” we are just two short steps away from total financial failure.  The next step will be printing more money to flood the monetary system and rapid devaluation of the currency; lastly, hyper-inflation, a disease that will ultimately lead to the destruction of our Representative Republic.

Congress must act now and put the brakes on runaway Government spending and return to sound free enterprise principles of economics.

One Response

  1. Most people, although they are against this irresponsible borrowing and spending do not seem to understand the immeadiate threat. Everybody knows thaty our children and grandchildren will pay the debt in the future in the form of confiscatory taxes. But the present threat is not well defined. The threat to all of us here and now is the fact that all this Gov’t borrowing is making credit and loans increasingly difficult to get due to the simple fact that there is no more money out there to loan after the Gov’t gets their (un)fair share.
    Our fearless leader would have us believe that the credit problem is due to the greed of the bankers and not due to the fact that there is only so much money (at least in the private sector) and the demand on this monetary supply by Gov’t borrowing is creating a shortage of funds available for private lending.
    This shortage will affect all of us directly or indirectly. Business loans will become fewer and fewer and interest on these loans will invariably go higher as a result of an increasing demand on a diminishing supply. Fewer business loans will mean fewer jobs from either new business start-ups or existing business expansions
    This will also lead to adverse conditions for the private indiviual as well. Homeloans and personal credit will suffer the same fate, resulting in a death spiral for the overall economy. With less money available through credit to purchase homes, automobiles and other durable goods, businesses will suffer further affecting employment across the spectrum.
    Just one question, is our fearless leader really this ignorant or does he know exactly what he is doing?

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: