Obama: Fundamental Belief vs. Reality

By: Guest Authors

By: Bill Wilson

If one studies the major initiatives underway thus far by the Obama
Administration, mainly; healthcare, the economic stimulus package, and
the cap-and-trade legislation, it is logical that the driving force
behind these bills involve Mr. Obama’s vision for the United States in
the long term. However, his desire to rush ahead in giant leaps to his
ultimate dream for America has distorted his current view of American
business, taxpayers, and the overall economy.

First, the effect on the economy of the 787 billion dollar economic
stimulus package, and the approximately 15% of this amount spent to
date, is fascinating when you consider the original intention of the
President in selling the stimulus package to the American people. The
intention, and indeed Mr. Obama’s “selling point” was primarily in
creating jobs, and putting people to work who will ultimately spend
money on goods and services and thus stimulate the economy. We now know
that the unemployment rate has moved to 10.2% and by most accounts will
remain at this level well into next year. This result is not at all
surprising when you abandon idealistic “theory” and focus on reality and
the way in which our capitalist system currently operates. The idea
that building infrastructure in bridges, roads and similar projects will
add statistically significant jobs to the economy was widely dispelled
by business people with actual experience in creating jobs. The
stimulus funding has been highly successful in stimulating the U.S.
Stock Market since big business has been the quintessential benefactor,
and with an eye on cutting costs and profitability being the main goal,
jobs are not being added, instead corporations are adapting to a leaner
philosophy. Numerous grants, loans, contracts and entitlements to
mostly service based small and midsize companies has created mainly
short-term jobs while spawning an increased demand for large
corporations products and services in the manufacturing sector.
Certainly, this has to be viewed by the Obama Administration as an
unintended consequence. The report just released by the Administration
indicating 650,000 jobs “created or saved” as recorded by Federal
agencies from the stimulus funds recipients reports to recovery.gov, is
by many accounts little more than speculation.

While Mr. Obama’s vision for America in the longer term is one which
mirrors the French socialist tilted system in both jobs, taxes and
entitlements, it is counterproductive for the administration to make
present day decisions in a capitalist economy based on unrealistic
assumptions and a future economic vision.

The national healthcare bill recently passed by the House of
Representatives is another example of incorrectly judging the present
behavior of the American people in a free market society. The vast
majority of Americans agree that the present healthcare system needs
reform, and most experts agree that the scaling cost in the present
system is unsustainable. What is most troubling, is that the Obama plan
will require all Americans to buy health insurance or face a
penalty/tax, while at the same time forcing businesses who meet the
criteria to offer health insurance to their employees or face a monetary
fine/tax. The approximately 48 million uninsured individuals in this
country will surely consist of a large number of young people, and folks
who do not qualify for Medicaid, many of whom will simply not want to
pay for it, resulting in fines. The Obama Administration and the
Democrats will face a very stiff political backlash in the event the
bill passes with these requirements, as most polls show that less than
half of Americans support the bill. In addition, it is quite possible
that many people who respond to these polls are uninformed regarding the
details of the healthcare plan, and those without coverage may falsely
assume that they will be furnished with “free” healthcare, particularly
when the phrase “public option” is included. It should also be obvious
to expect a dramatic rise in healthcare premiums in 2013 when insurers
will be forced to cover those with pre-existing medical conditions.

It is interesting to note that President Obama has repeatedly emphasized
the need to make small changes on the path to his ultimate vision for
America, yet the current healthcare bill developed solely by Democratic
leaders will contain major changes for the American people in rapid

The senate version of the Cap-and-Trade bill sponsored by John Kerry
D-Mass, and Barbara Boxer D-Calif, is highly touted by Mr. Obama yet
exemplifies a drastic misunderstanding of capitalism and the American
economic engine as it exists today. The need to address global warming
is supported by a vast majority of Americans in most polls, yet instead
of measured steps to minimize the impact on families and the economy,
the President is taking a hurried path to a future vision. Early
estimates measuring the yearly cost increase for families with the
passing of this bill, vary from $1200 to the $2,000 range, and pale in
comparison to the tax levies that businesses will incur. The carbon
emissions reduction to 20% below 2005 levels by 2020 is an aggressive
step which could lower GDP, cost the US jobs and result in numerous
price increases for working families, the same working families who
supported Mr. Obama’s Presidential campaign.

Interestingly, the economic impact of these three initiatives may be a
significant barrier to Obamas’ goal of an equal distribution of wealth
in America, because hefty deficits, new taxes, and price increases could
simply be insurmountable for the near term and carried forward to future
generations. It is apparent, and quite admirable in a certain way, for
Mr. Obama to be steadfast in embarking down an “all at once” path in
his first term, while almost certainly conceding the mid-term and 2012
elections to the Republicans.

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