January 31, 2010

State of the Union: Worse in just a week

January 31, 2010
By Herman Cain

Last week I wrote an assessment of the real State of the Union. It was based on compelling and irrefutable facts. As expected, my assessment did not match what the president said last Wednesday in his State of the Union address. The president’s address was filled with new rhetoric and old policy, more promises that had already been broken, and more Bush-bashing.

As a result, listeners did not get a sense of direction, a reassurance that we are safe, positive prospects for renewed prosperity, nor did we get a sense that we are more united as a nation. Obama supporters will say that he needs more time.

Sorry, that dog will not hunt!

We do not need another year of trying to spend our way to prosperity with more spending on government, and hardly any real incentives for businesses to start growing and hiring again. Even though the president said, “Jobs will be our number one focus in 2010”, people were left wondering, “Where’s the beef!”

We do not need to give President Obama more time to break the same promises he has already broken on transparency, pushing back on earmarks in proposed legislation, and seriously listening to other ideas.

And continuing to try and deflect all of our nation’s problems on the eight years before he took office is a really bad excuse for a serious lack of leadership.

And then things got worse.

I am not talking about the just reported growth in GDP in the fourth quarter of 2009 over the third quarter. Even though the Associated Press article described the 5.7 percent growth rate as having “boomed” at the end of 2009, you have to read way deep into the article for them to point out that the 2009 growth rate over 2008 fell by 2.4 percent overall.

I am also not talking about the new jobless claims, or the fact that the unemployment rate is still expected to hover around 10 percent, or that many analysts do not expect these latest two quarter-over-quarter growth rates to be sustained.

Things got worse when the Senate approved a 15 percent increase in the statutory debt limit from $12.4 trillion to $14.3 trillion. Although the House will also have to approve the new debt limit and the president must sign it, the likelihood of them not doing so is somewhere between zero and zero.

The new debt limit is bad news because whenever Congress raises the limit, then it is just a matter of time before they come close to it and have to raise it again. It is called runaway tsunami spending.

The new debt limit is also bad news because it represents an additional $5,000 for every man, woman and child living in this country. This is on top of the $40,000 of debt the government had already committed for each of us. Sooner or later, it will have to be repaid, or eventually the state of our union will be bankrupt. Unlike some big banks and General Motors, the USA is not too big to fail. Uncle Sam does not have a bailout sugar daddy.

More federal debt is driving down the value of our U.S. dollar, thus, reducing our spending power as consumers domestically and in the global market place.

More federal debt and the uncertainty of what the Democrat-controlled Congress will do about the existing tax rates that will expire at the end of this year keeps businesses in a state of stop. As long as that remains, the economy will remain in a state of stalled.

That’s not good for the State of the Union.