Sunday, August 7, 2011

President Obama’s Big Government disaster

From Nile Gardiner at The Telegragh:

The decision by credit agency Standard and Poor’s to downgrade America’s AAA credit rating for the first time in 70 years is a massive blow to the credibility of the Obama administration, and a damning indictment of its handling of the economy. No doubt the White House will pathetically try to blame the Bush Administration, Republicans in Congress, and of course its favourite target, the Tea Party, for the move by S&P. But without a shadow of a doubt, responsibility for the country’s financial mess and staggering levels of debt lie with the current US president and his administration. They have been in charge of running the economy for over 30 months, during which time the United States has witnessed an unprecedented increase in government spending and borrowing.
As the Congressional Budget Office revealed In January, the deficits generated under the Obama administration are the largest since the end of World War Two:
The deficits of $1.4 trillion in 2009 and $1.3 trillion in 2010 are, when measured as a share of gross domestic product (GDP), the largest since 1945—representing 10.0 percent and 8.9 percent of the nation’s output, respectively… Just two years ago, debt held by the public was less than $6 trillion, or about 40 percent of GDP; at the end of fiscal year 2010, such debt was roughly $9 trillion, or 62 percent of GDP.
The implications of this debt downgrade are extremely serious, not least with 46 percent of US Treasuries owned by foreigners. As The Wall Street Journal notes, the United States now has a score that ranks “below Liechtenstein and on par with Belgium and New Zealand”:
the move by S&P could serve as a psychological haymaker for an American economic recovery that can’t find much traction, and could do more damage to investors’ increasing lack of faith in a political system that is struggling to reach consensus on even everyday policy items. It could lead to the prompt downgrades of numerous companies and states, driving up their costs for borrowing. Policy makers are also anxious about the hidden icebergs the move could suddenly reveal. …. Lessons from other countries, such as Canada and Australia, suggest it can take years for a country to win back its AAA rating.
Since President Obama took office in January 2009, the United States has embarked on the most ambitious failed experiment in Washington meddling in US history. Huge increases in government spending, massive federal bailouts, growing regulations on businesses, thinly veiled protectionism, and the launch of a vastly expensive and deeply unpopular health care reform plan, have all combined to instill fear and uncertainty in the markets. Free enterprise has taken a backseat to continental European-style interventionism, as an intensely ideological left wing administration has sought to dramatically increase the role of the state in shaping the US economy. The end result has been a dramatic fall in economic freedom, sluggish growth, poor consumer confidence, high unemployment, a collapsing housing market, and an overall decline in US prosperity, with more than 45 million Americans now reliant on food stamps – that’s over one seventh of the entire country.
These are increasingly dangerous times, with American leadership being challenged across the globe. Only an historic reduction in government spending combined with pro-growth measures including lower business tax rates to stimulate job creation and attract investment can turn the US economy around. Unfortunately, as Standard and Poor’s decision has shown, this is a presidency in extreme denial over America’s towering debts, leading a nation on a precipice while blindfolded to reality. The United States badly needs another Reagan-style revolution to stave off further economic disaster, preserve American leadership on the world stage, and secure the future of a superpower. Ultimately, greater liberty and freedom, not the deathly hand of Big Government, are needed to turn this great nation around.

1 comment:

  1. Ho Hum. Another case of the blame game. Its silly and short sighted to say that the fault of this whole debt ceiling fiasco is on the current administration. Both parties are wholly responsible for the downgrade, with the Tea Party taking the country hostage over partisan politics. How does signing the Norquist pledge help govern America? Who are the Tea Party representing? Do you think its coincidence that this Congress has the lowest approval ratings in history?

    How exactly does the Obama admin get the blame for the right not compromising on ANYTHING. The only deal the Republicans have been willing to make is that there will be NO DEAL. How is this governing? They have unabashedly said that their entire purpose is to ensure that Obama is not re-elected in 2012. Why is there no call for them to represent the constituents that elected them?

    There is simply no arguing the fact that the failed policies of the Bush admin caused the reckless spending that you see today. Where was S&P when they graded the subprime mortgages and credit default swaps a AAA gold rating? The deregulation of Wall St and the mortgage industry is all on the Republicans. The resulting bailouts and reckless spending to keep the country on track is a direct result of these failed policies.

    Also, why is there never any call to end the three failed wars we are currently embroiled in by the right? For a party of proposed fiscal conservatives, the wars represent the largest expenditures in the entire government! It is not the duty of the US to play world police. It is also not the duty of the US to discern who gets to rule whom. We have supported terrorism in the name of US interests worldwide. Its disgusting...

    Enough with the Reaganomics! This is not 1988! There is a worldwide economy now, and the policies of over 20 years ago are simply antiquated, and have proven to be failures! Just look at the data! Trickle down economics has failed! Quarterly profits are soaring for corporations this year. So where is the lending and job creation? They have been slashing domestic jobs and stockpiling profits.

    Its always liberty and freedom with you guys. Where is the freedom of representation? Where is the liberty in a country that has mortgaged my future? I really can't wait for the inevitable back lash on the government. It has already started in Wisconsin. Just know that you will be on the wrong side of history in the end.