In this installment on the STOTU we turn to economic issues. [Click this link for the Prepared Remarks.]
Mounting deficits & debt load are counterproductive in the worst way. They discourage consumer, investor & entrepreneurial confidence. Hard work and industry are not rewarded by proposals to raise taxes on income. Raising taxes reduces the funds available for investment and discretionary spending. Success is rewarded, failure is punished; hard work does not equate to success. Most new startups fail within five years. The success stories we hear about are the exception, not the rule. Escalating inflation in fuel, food, transportation, energy, insurance and medical services reduce the discretionary income available for investment and discretionary purchases. We can't pay more and buy more without earning more. We can't earn more without jobs. We can't have more jobs unless people are able and willing to purchase the goods and services produced by people working in those jobs. We do not have any leadership to sustain; we have a misleader in the land's highest office. Obama is leading us onto the on ramp of the expressway to ruin.
In keeping with the manure pile concept, that paragraph contains a rich mix. It begins with politics, with references to the immediate past and near future elections. President Obama denied the obvious: the State of the Union Address is the first major campaign speech of the 2012 presidential contest.
The establishment of new jobs and industries can not be facilitated by government action, it can only be hindered. Creating a climate of uncertainty is the worst possible hindrance to startups. Business requires the ability to plan ahead, and that implies certainty, continuity & predictability. When radical changes are threatened, the required certainty & predictability are destroyed. Investors will keep their assets in cash or readily converted instruments in the absence of predictability.
The stock market remains volatile and its gains are reversible. Which corporate profits are up and how much? Is that a function of their recent staff reductions? How much is the economy growing and how much of that is real growth?
The small business owner can not make his enterprise thrive and grow while burdened by inflation, uncertainty, foreign competition and multiplying layers of regulations and restrictions. We can not give the next generation opportunities for a better life while pursuing policies and actions that drag down and promise to destroy our economy.
Jobs do not offer quality of life. Jobs yield income which enables us to purchase the goods and services we need and want. Quality of life is a complex concept involving much more than employment and income.
"My way or the highway" would be closer to the real meaning of that sentence. Those who understand the elemental laws of economics must submit in silence; go along to get along or suffer condemnation as 'obstructionists' who 'block progress'.
If the Republicans had not won a majority in the House of Representatives last November, you would have happily let the rate reductions expire. Disposable incomes would be considerably lower if you had not been forced to sign the extension into law. No benefit was done; a great injury was staved off for two years. How many businesses have the cash reserves or credit necessary to invest in new investments in equipment? How many businesses have the sales potential to make economic use of expanded plants and equipment? If full write offs are such a good thing, why do it for one year; why not make it permanent? How many new jobs were created last year? How many were destroyed? What was the real net gain and how does that compare to a normal year?
In reality, you were dragged kicking and screaming into extending current income tax rates for two years. If your party would 'work together' the tax rate reductions made on Shrub's watch would be permanent, so that no extension would be required. The ten year sunset clause was a 'crat demand. Yours is the party of raising taxes.
"Many people watching tonight can probably remember a time when finding a good job meant showing up at a nearby factory or a business downtown. You didn’t always need a degree, and your competition was pretty much limited to your neighbors. If you worked hard, chances are you’d have a job for life, with a decent paycheck, good benefits, and the occasional promotion. Maybe you’d even have the pride of seeing your kids work at the same company.
That world has changed. And for many, the change has been painful. I’ve seen it in the shuttered windows of once booming factories, and the vacant storefronts of once busy Main Streets. I’ve heard it in the frustrations of Americans who’ve seen their paychecks dwindle or their jobs disappear – proud men and women who feel like the rules have been changed in the middle of the game."
The change mentioned above is the result of the golden goose being strangled by by Obama's allies: unions. With the retirement of the Baby Boom generation, those hidden costs are threatening the solvency of the government as well as major industries. 'More for less; forever more' does not work in the long run. Demagogues who deny that fact are part of the problem, not part of the4 solution.
Steel mills closed because of extortionate union contracts, burdensome government regulations and foreign competition. Fifty years ago, economic development was a major foreign policy objective. It still is. Those who want to stimulate 'economic development' in Africa & Asia seem to be incapable of comprehending the fact that competition with our own industries is an unintended consequence of their foreign policy.
Computer software and entertainment can be delivered through an internet connection. Real physical factors of production and consumer goods require physical delivery. Obama's attacks on the petroleum industry are making delivery of goods more expensive, increasing inflation.
Translation: Pay higher taxes & prices; sacrifice your lifestyle without any present or future benefit because of a power grab by greedy politicians and their cronies in the union movement.
How many people are employed by Google and Facebook? How many people will they and similar corporations employ? How does that compare to the number of full time jobs lost in the steel, auto and petroleum industries? How many of the recently unemployed have a hope of gaining jobs with Google, etc?
Great! Computer chips designed in Israel and produced in Asia. Computers assembled in Asia. American jobs, yeah, right.
"Clean energy" is the biggest boondoggle. Every day we consume vast quantities of liquid fuel which contains 160,000 btu per gallon. It is not possible to replace that fuel without matching its energy content and there is no alternative fuel that matches its energy density. The scope and scale of the problem are incomprehensible. There is no alternative energy source. No matter what you burn, you consume oxygen and generate products of combustion. The problems of industrial scale production & distribution should be sufficient to warn off any thinking person. Electricity is not an alternative energy source. Most of it is produced by burning oil, gas or coal. We are paying more for food and riots are breaking out in other parts of the world as a predictable consequence of diverting corn from food to motor fuel production. There is no replacement for oil, and if there was, reducing our dependence of Arabian oil would not increase our security unless we were willing to confront Islam, which no current politician is willing to do. We need leadership with brains, spines & testicles; those are not functions of reduced oil consumption. Anthropomorphic global climate change is a big lie, as an increasing number of people are discovering. Countless can be a very small number such as zero, it does not need to be a large number. New jobs? Yeah, right. Pedicab operators & bike couriers?
We are faced with insolvency, so the President proposes massive new spending. Its like buying a brewery for an alcoholic. Whenever Obama says "invest" it really means more taxes, more debt, more deficit and more inflation.
Assuming 30mpg., the energy consumption is about 5,333 btu/mile. One KWH is about 3412.1416 BTUH. That is about 1.6 KWH per mile. Assume that each of those million electric vhicles travels 10,000 miles per year. Where are those 1.2 billion KWH coming from? Solar cells & windmills, yeah, right.
Where is Obama letting oil companies explore for and produce oil? Where is he permitting the construction of refineries? Why are we dependent on oil produced in areas ruled by people inimical to our interests? Considering the current price of $3.20 per gallon, how will Obama's scheme affect our pocket books? Where was your head when you voted for him??
You voted for change; you are getting it. Are you satisfied yet?
Translation: drastic inflation: increased prices for electricity and motor fuel, further reductions in our lifestyles, fewer jobs and another great depression. Natural gas is a byproduct of the oil production process. Get a clue, for Chrissake!! Clean coal?? Obama bragged that he would destroy the coal industry. Nuclear power? Litigation, regulations, insurance costs and union rates have made it impossible to build new reactors.