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Recovering from the President

This morning the Wall Street Journal’s opinion page is topped with an article titled “How the Recovery Went Wrong.” This timely piece, written by former American Express CEO Harvey Golub, explores the waste, fraud and abuse that derailed a robust recovery from one of the worst recessions in our lifetime. While I certainly concur with Mr. Golub’s assessment of the failed economic stimulus act, I’d simply add that America must recover from the Presidency of Barack Obama before it can ever recover economically.

This president’s failed policies have resulted in a nearly $5 trillion increase in our national debt, a nearly $800 billion annual increase in Federal spending, persistently high unemployment and diminished returns on investments for millions of Americans. Let’s take each one of these items point-by-point, to fully understand the damage done by each. First and foremost, this administration has borrowed $5 trillion in the name of stimulating the economy now, though that objective has not been achieved, while the interest on this debt will be paid over decades by our children and our grandchildren. The annual increase in Federal spending, to the tune of $800 billion, has led the Federal Reserve to print billions of dollars to buy our own national debt in order to finance the spending spree. This has resulted in historically low interest rates that, despite all the Keynesian central-planning rhetoric, have not led to increased business borrowing and investment. Instead, they have simply ensured that seniors, those saving for retirement, their child’s education or a new home have earned next to nothing on their money. This while the money they are saving is subject to nearly 5% inflation, meaning they’re losing value even on the money they do save. The result is increased spending and less saving at a time when American households are already overleveraged.

In 2009, President Obama gave a speech in Baltimore on the way to his inauguration calling on Americans to abandon the rigidness of ideology. Later that same year, Mr. Obama said that his Administration wouldn’t be driven by ideology, but by “what works for our times.” Well, Mr. President, aside from the fact that your determination of “what works for our times” is inherently ideological; your policies are fundamentally flawed. Even though every sacred cow of Keynesianism has been included in your policy proposals, unemployment is up, economic activity as abysmal and the dollar is down. Isn’t it time to follow your own advice to get rid of what doesn’t work? Namely your entire economic policy?

I thought Mr. Golub’s article in the Journal was excellent, but I believe the heart of his message could be summed up as follows: America cannot recover economically until we recover from this ideologically rigid President.

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