OPINION:
Barack Obama is the Barry Bonds of big government. He offers America liberalism on steroids. While he earns grand slams for spending and debt, his pitiful results constitute strikeouts.
In an address to the Hoover Institution on Monday, Stanford University economics professor Michael Boskin detailed President Obama’s truly historic profligacy.
Under Mr. Obama, federal spending has risen from 20.7 percent of gross domestic product (GDP) to 25.3 percent, Washington’s largest slice of apple pie since 1945. In fiscal 2011, which ended September 30, Uncle Sam spent a record $3.6 trillion, up an inexcusable 4 percent since fiscal 2010. So much for Mr. Obama’s demands for “shared sacrifice.”
Mr. Obama’s spend-o-rama includes federally funded “green jobs” that Mr. Boskin dismisses as “the leprechaun economy.” The apotheosis of this blarney was last month’s $1.2 billion Energy Department loan guarantee to Richmond, Calif.-based SunPower Corp. Its solar-equipment project promises 15 permanent positions. Cost per job created: a staggering $80 million each.
Even worse, if possible, the Fox Business Network’s Gerri Willis reports that SunPower received this federal largesse even though its share price has plummeted 93.5 percent - from $133.61 (its Dec. 7, 2007 peak) to $8.09 on Sept. 30, when it won Energy’s loan guarantee. SunPower’s market capitalization stood at some $800 million, just below its $820 million debt. SunPower released an earnings warning after scoring this federal subsidy. SunPower also faces a class-action lawsuit, in which investors claim that it has made false public statements.
Such fiscal recklessness helped swell fiscal 2011’s federal deficit to $1.298 trillion, just ahead of fiscal 2010’s $1.294 trillion in red ink and fiscal 2009’s record $1.416 trillion. Mr. Obama has authorized three consecutive, trillion-dollar-plus deficits. Now he demands another $447 billion for Stimulus Jr.
All this, Mr. Boskin observes, has pushed the federal debt to 67 percent of GDP, the highest since the aftermath of World War II. No wonder Standard & Poor’s downgraded America’s sovereign debt last Aug. 5 - another first.
Mr. Obama’s milestone-setting expenditures would be bad enough if they were the spectacularly high price for restoring prosperity. Instead, Mr. Obama has impoverished the republic for nothing.
Only 58.1 percent of the population is working, the lowest level since 1983, notes Mr. Boskin, President George H.W. Bush’s chairman of the Council of Economic Advisers and a Hoover senior fellow. Among America’s 14 million unemployed citizens, a record 45.9 percent have been jobless for more than 27 weeks.
Mr. Boskin compared snapshots of Mr. Obama’s and President Reagan’s post-recession recoveries, 27 months after each downturn hit bottom. In September 2011, on Mr. Obama’s watch, non-farm payrolls had grown 0.6 percent, yielding 841,000 jobs since June 2009. Under the tax-cutting, business-boosting Reagan, non-agricultural employment swelled 8.7 percent, generating 7.7 million new jobs.
Team Obama predicted that his stimulus would limit unemployment to “approximately 7.0 percent.” In fact, unemployment seems stuck at 9.1 percent, despite Mr. Obama’s $825 billion stimulus. Mr. Boskin calculates that this 2.1 percent gap equals 16 billion foregone work hours. Even if one thinks that Mr. Obama stimulated 3 million jobs, that equals $280,000 per position - nearly quintuple the analogous $58,510 private-sector cost.
This stagnation now finds 51 percent of Americans too poor to pay federal income tax (a modern record), while 47 percent of Americans receive at least one form of federal transfer payment (a historical high), as dependency on the ever-expanding state expands.
Mr. Obama’s stack of bills, Mr. Boskin predicts, means higher taxes - soon. To underwrite Mr. Obama’s deficits, top California earners, for instance, could see combined federal and state income and payroll taxes total 70.8 percent of income by 2016. Those earning just $60,000 could pay 52.4 percent to Washington and Sacramento. Non-Californians also should anticipate higher taxes.
“A CEO who got it wrong this many times would be gone by now,” Mr. Boskin said. Instead, Mr. Obama barnstorms campaign events, barks at the rich and bellows for further federal outlays.
While Americans wallow in the poorhouse, Barack Obama is bound for the Unlimited Government Hall of Fame.
Deroy Murdock is a columnist with the Scripps Howard News Service and a media fellow with Stanford’s Hoover Institution.
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