"Fine Speech. Now What Do We Do?"

As I noted in a previous post, I'll take any opportunity to quote a line from "Braveheart," especially one uttered by Steven the Irishman.

The reference is, of course, to President Obama's first address to Congress last night. Yes, he sure turns a pretty phrase - he could make "I'm going to kill you, painfully and slowly," sound like a sugar-coated opus of love and affection.

Or, "I'm going to bury you, your children and your grandchildren in a mountain of debt from which you'll never recover, and may very well sacrifice US sovereignty in the bargain."

I liked his speech at first. He started by frankly acknowledging the seriousness of the economic crisis we're engaged in, and tossed in a resolute affirmation that we, the greatest nation on earth, will recover, and "emerge stronger than before."

And he alluded to where the responsibility for this calamity truly lies: in excessive borrowing and spending, from households to companies to the Beltway:

"Now, if we're honest with ourselves, we'll admit that for too long, we have not always met (our) responsibilities - as a government or as a people. I say this not to lay blame or to look backwards, but because it is only by understanding how we arrived at this moment that we'll be able to lift ourselves out of this predicament."

At this point, I was cheering him. This seemed like the perfect set-up for a discourse on the fiscal responsibility that will be necessary for all of us, and particularly for our federal government, if we are to have any hope of a lasting recovery. And as he continued, he seemed to be heading in just that direction:

"The fact is, our economy did not fall into decline overnight. Nor did all our problems begin when the housing market collapsed or the stock market sank. We have known for decades that our survival depends on ..."

What next? "... breaking the habits of excessive consumerism funded by back-breaking debt burdens that threaten the solvency of our banking system and choke off credit"?

Nope. Instead we got a segue into how the root of the problem is that we're importing more oil than ever before (not true; oil imports have fallen since peaking in 2005, and are projected to continue to moderate), the high cost of health care eats up too much of our savings (true, but so does the high cost of excessive credit balances - and if the emphasis is on savings, why not incent that, instead of more borrowing and spending?), that our schools do not adequately prepare our children to compete in a global economy (true again, but with China and India being the primary countries nipping at our heels and importing our jobs, and with the savings rates in those countries in double-digits, why not start by teaching financial literacy in our schools?).

Then came a call to act "boldly and wisely." I'm beginning to suffer a Pavlovian cringe every time he says that, because I fear what's coming after. At least he didn't say "urgently" this time.

We got more fluff about the mythical 3.5 million jobs that the porkulus bill will save or create. That's not going to happen. We got a reminder that 95% of Americans will receive a "tax cut" this year, in the form of an extra $13 a week not withheld from our paychecks - money that, of course, we're encouraged to spend immediately.

He promised us that Vice President Biden would lead a "tough, unprecedented oversight effort - because nobody messes with Joe." That brought the Dems to their feet, applauding VP Biden, who remained seated, leading me to want to yell, "Stand up, Joe!" Yes, that the same Joe Biden who voted for the no-strings-attached TARP without reservation will be leading the effort to oversee how the porkulus funds are spent will have me sleeping better at night. With the help of a little scotch.

He also promised a website, recovery.gov (created at what cost, I pondered) to help us watch how our tax dollars are being spent.

I don't need that website. I can just walk into my bathroom, flush the toilet, and watch what happens.

He then went on to talk about how important it is to un-freeze credit, so that we can borrow more money to buy more stuff. I've preached the sermon on that topic often enough that no one reading this needs to be subjected to a re-hash. Just remember what I've said before, or read my past posts.

He talked about his housing rescue plan, which I'll address in detail in an upcoming post, hopefully within the next day or two.

He acknowledged that the recovery plan will require "significant resources from the federal goverment (read: China) - and yes, probably more than we've already set aside." Instead of that recovery.gov website, how about a Jerry Lewis-style tote board that tracks the tax dollars we're going to be spending, assuming we have access to sufficient computing power to turn over the numbers as fast as the dollars flow?

Then it was time to talk about the budget that he's going to be submitting to Congress. He called it "a blueprint for our future." I'm guessing that when we get a look at this blueprint, we'll realize that it is the architectural map for a very large prison, one from which escape may prove impossible.

The prison will have three foundations: energy spending, health care spending, and education spending. All noble concepts, if one trusts the government to be able to pull them off without making things even worse, and to lay out the spending plans without packing the required bills with pork. But the bottom line is that the three cornerstones of this building (don't they need four?) will be spending, spending and spending.

Oh, but wait - he also promised to halve the deficit by the end of his first term (this after expressing pride in passing the "recovery plan free of earmarks," to which I must point out that the emperor is embarrassingly naked). He said they've already identified two trillion dollars that can be cut from wasteful government programs (which led me to ponder how many of those he voted in favor of as a US Senator) in the next decade.

Okay, let's do the math: that's savings of $200 billion a year for the next ten years. Mark my words, this year's deficit will exceed $1.5 trillion, and may reach $2 trillion, and next year's will be worse. It's going to be hard to halve that in four years by knocking off 10% a year, while additional massive spending is undertaken. My projection is the deficit will still exceed a trillion dollars by the end of his first term, and may be double that, or more.

He promised to end wasteful education programs and agribusiness subsidies, but those will just be replaced - if not increased - with new education programs and other subsidies. It's a zero-sum game.

The rest of the address was fluff. It sounded pretty, but the proof will be in the pudding, and I'm guessing it will be a pretty fat-laden concoction, and one with a very high menu price.

I'd rather pass on dessert; I'm feeling a bit queasy.