Barack Obama addressed the country for the third State of the Union address of his Presidency this week. In broad terms, he talked mostly about innovation, education and jobs. To be fair, he also briefly touched on the deficit, the two wars we are fighting and unity. But because so much emphasis was put on education, it sounded more like an address to a local PTA and not an SOTU speech. The financial problems the country is facing now are so enormous it was startling they were glossed over or not mentioned at all.
The country is deeply in debt, and it will sink deeper when Congress raises the debt ceiling in a few months. Experts say it has to be expanded by a trillion dollars a year for the foreseeable future; otherwise, the U.S. will default on its commitments. This is a minimum of $1,000 billion of new debt ($1 trillion) added on top of the record national debt of $14.3 trillion. The American people deserve, at least, an explanation and a plan on reducing it. By the way, the Congressional Budget Office (CBO) announced yesterday this year’s deficit will hit an eye popping $1.5 trillion (another record), which means we will borrow 40 cents of every dollar we spend.
The CBO also announced this week that Social Security will slip into the red this year and pay out $45 billion more than it collects in payroll taxes. The report claims Social Security will stay underwater and be flat broke by 2037. I’m betting it will go under a lot sooner. This, too, deserved a frank discussion.
I also cannot see why the President chose to ignore the ongoing foreclosure crisis in this country. A record one million people were thrown out of their homes in 2010, and housing experts say a new record will be set again this year. By 2013, six million homes will have been foreclosed on and this didn’t even rate a mention?
A record 43 million Americans are surviving on food stamps. That’s nearly 20 million more people getting a government handout than in 2007. By the way, JP Morgan runs the program for the government; and the more people go on food stamps, the more the bank makes. I don’t know how bad this has to get to be mentioned in the State of the Union?
The President said this in his SOTU speech, “We are poised for progress. Two years after the worst recession most of us have ever known, the stock market has come roaring back. Corporate profits are up. The economy is growing again.” (Click here for the full text of the President’s speech.) I would like to know what metric he is using to say “the economy is growing again.” Corporate profits are up because companies laid-off millions of workers, and the stock market is being propped up by money printing from the Fed. This should make all stock market investors a little nervous! Just listen to the President of Trim Tabs, Charles Biderman, on CNBC right before Christmas below.
There is a $2.5 trillion public pension shortfall. Most states and many cities are facing severe budget problems and some even insolvency. Meanwhile, the banks are continuing to get large backdoor taxpayer bailouts in the tens of billions dollars. Many Wall Street banks would be insolvent if it were not for an accounting rule change that makes the banks look healthy. But even crooked accounting didn’t prevent 157 small community banks from going under last year—a record for the new millennium. We are fighting two very expensive wars, and there is no real sign either will really be over any time soon.
On top of it all, the Federal Reserve is financing nearly half of the government’s budget with money created out of thin air ($75 billion a month). The program is scheduled to end in June, but many experts say the Fed will just keep on printing cash to infinity. That policy will surely be inflationary and cause more pain for those of us who need food and fuel.
Barack Obama didn’t cause all the problems America faces, but he’s the President and the one elected to lead our nation. I am not upset by anything he said in his address to Congress, but rather by what he didn’t say. You can’t tackle a problem if you don’t even acknowledge it. This years’ State of the Union address should be renamed “State of Denial.”
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Greg is the producer and creator of USAWatchdog.com. The site’s slogan is “analyzing the news to give you a clear picture of what’s really going on.” The site will keep an eye on the government, your financial interests and cut through the media spin. USAWatchdog.com is neither Democrat nor Republican, Liberal or Conservative. Before creating and producing the site, Greg spent nearly 9 years as a network and investigative correspondent. He worked for ABC News and Good Morning America for nearly 6 years. Most recently, Greg worked for CNN for shows such as Paula Zahn Now, American Morning and various CNN business shows.