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The Audacity of Obama’s State of the Union

Anthony Gregory
Campaign For Liberty
Friday, January 29th, 2010

Last night, I suffered through Obama’s speech. I noticed the overarching theme was: in 2010, the administration will finally getting around to all it promised for 2009, as well as a whole other year worth of miracles.

He begins by taking credit for saving the economy from a second Great Depression. “[W]e acted, immediately and aggressively. And one year later, the worst of the storm has passed.” Except for the massive unemployment, which he notes in his next breath. Wasn’t the worst of the storm the pain of the American people? Or was it the so-called credit freeze that Obama seems to imply is still happening: “[W]hen you talk to small-business owners in places like Allentown, Pennsylvania, or Elyria, Ohio, you find out that even though banks on Wall Street are lending again, they’re mostly lending to bigger companies. Financing remains difficult for small-business owners across the country, even though they’re making a profit.”

Here’s another thing that doesn’t add up for me. Obama says, with some validity: “By the time I took office, we had a one-year deficit of over $1 trillion and projected deficits of $8 trillion over the next decade. Most of this was the result of not paying for two wars, two tax cuts, and an expensive prescription drug program.”

This is a decent point. Bush racked up the deficit with two off-budget wars, a bloated expansion of Medicare and tax cuts that did not correspond to any cuts in spending. And so what’s Obama propose to halt the deficit from spiraling yet more out of control?

We are prepared to freeze government spending for three years. Spending related to our national security, Medicare, Medicaid, and Social Security will not be affected, but all other discretionary government programs will.

Let me get this straight. Medicare and war profligacy brought on the crisis, and so we will “freeze” spending, expect for Medicare and war — and also except for Social Security and Medicaid? Huh?

Yes, there is also the point that Bush cut taxes without cutting spending. But this is another thing Obama is prepared to do:

“[We] passed 25 different tax cuts.”

“[W]e’ll extend our middle-class tax cuts.”

“[L]et’s also eliminate all capital gains taxes on small-business investment and provide a tax incentive for all large businesses and all small businesses to invest in new plants and equipment.”

One can argue over whether Bush’s tax cuts or Obama’s tax cuts are more fair, more sensible, more substantive, or whatever. But the fact remains, from a fiscal responsibility perspective, both Bush’s and Obama’s tax cuts could be criticized for being political gimmicks amid a cascade of deficit spending.

On banking regulation, the president says he will not seek to “punish” the banks but will stand up to them. Not much mention here on the revolving door between Wall Street and the big banks and Washington, which Obama has only sought to widen.

Obama touts his escalation of war in Afghanistan, a war the U.S. should have never waged and should have in any event ended some time in 2001 or 2002, once it was clear Osama bin Laden had escaped. This war, of course, is being vastly expanded beyond what Bush indicated he would do with it, and it’s just as much a fiscal nightmare as Bush’s warmaking. As for Iraq, Obama is sticking by his promise to adhere to the time table set by the Status of Forces Agreement acceded to by Bush in late 2008. No sign of change there. And by avoiding the issues of contractors, the permanent military bases, what exactly non-combat soldiers are supposed to be doing there, he is taking credit for the status quo that he inherited.

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