By Paolo von Schirach
January 21, 2013
WASHINGTON – Nothing I have heard from Barack Obama since his November clear, (albeit not triumphant), re-election convinces me that this President has anything even close to a meaningful economic growth and fiscal reform agenda that can receive bipartisan approval. His Inaugural Address, if anything, would indicate that between growth and equality this President believes that equality is more important.
Equality rather than growth
President Obama’s second Inaugural Address was beautiful, well crafted and at times stirring. Of course, this is not the occasion for outlining a policy agenda. But it is the occasion in which a President reveals his core values and thus his priorities.
And Obama, if we judge by the space devoted to issues, wants more equality in America, while he will fight for the preservation of the existing entitlements system that provides safety nets and income support for the elderly and the poor. He said that we should not have to choose between caring for the young and making sure that senior citizens will have a dignified existence.
All this is noble and morally correct. Indeed we should make sure that all Americans, in practice, have meaningful access to opportunity, at every level. Indeed we should make sure that “the pursuit of happiness” is not restricted to a small class of privileged individuals. Obama is right in this.
Entitlement programs not sustainable
That said, the President said almost nothing about the fact that the current entitlement system is unsustainable and thus not affordable. Moreover, he said almost nothing about ways to rev up America’s stalled economy, the only reliable engine capable of producing prosperity –the foundation of expanded opportunity. He mentioned only vaguely the historic fiscal challenges this country is facing, while professing enduring confidence in American ingenuity and enterprise.
So, nice speech, noble goals. But America’s problem today is that we lack the means to reach those goals. Our colossal federal deficits and historic national debt will make sure that in the future we shall do less rather than more. A Government that has essentially become a welfare distribution agency has almost no money left to invest in our future. And, as spending and borrowing will increase, at some point even the check writing machine will stop.
Slow growth
By the same token, an American economy that grows at best by 2% a year, as opposed to the post war 3% average, will offer less to fewer people.
The President outlined noble goals of social and economic justice. This is all very well. But unless America starts growing again, the only way to get to more social justice is by redistribution through taxation and well meaning but costly social programs.
Fairness policies require resources
This approach may satisfy the desire to achieve more “fairness”; but it will not get as very far. Even Marx clarified long time ago that Socialism was not to be understood as mere redistribution for this would amount to the socialization of misery. Socialism was supposed to be a way to maximize resource utilization. In other words its success was predicated on economic growth.
Taking from the “haves” to re-balance the fortunes of the “have nots” is not an economic growth strategy. It is populism. Of course we need a genuinely equitable society where everybody has a fair shot at success. But in parallel we need a dynamic society that grows rapidly, this way expanding opportunity.
So far, no growth agenda, no fiscal reform plan
So far, I have heard nothing from President Obama indicating that he has a credible growth agenda that will get us out of the swamps of economic stagnation, accompanied by a serious entitlement and tax reform plan.
The President is right in saying that America should be able to provide for the needy and the elderly. But, if we do not even begin to balance our books and do not grow the economy, we shall lack the resources to do so. Just look at Southern Europe and you see where America is headed.
After four years as Chief Executive the President should have understood that slow growth and high debt are slowly chocking America. But I suspect that he has not.