Obamanomics

Welcome to Obanomics. Will the massive expenditure of Government capital hold back the tides of disaster about to wash up on our shores? What will be the collateral damage because there will be some? How does one come to terms with the impending higher taxes looming in the near distant future that will be required to quell the massive deficit beast that has been unleashed?

The questions keep mounting. The Republicans have some salient points but they sound like the boy crying wolf because they still want to keep blaming instead of recognizing that they contributed greatly to our common woe by not sticking to their core principles of fiscal responsibility: small government and lower taxes. After presiding over the largest government expansion, costly wars and record-breaking deficits that led to an almost tripling of the national debt, they are now screaming and complaining about Obamanomics.

I am not sure how the Republican party, now framed by Michael Steele, Rush Limbaugh, Sarah Palin and Bobby Jindal with their number one hate-mongering cheerleaders Sean Hannity, Michelle Bachmann and Ann Coulter, can expect any rational minded person to take note of their platform. Even CPAC's best polling efforts turned up Mitt Romney with 20% of the vote as most likely to be the best Republican contender in 2012. Ron Paul turned up at 13% tied with Sarah Palin. I think the Republicans should turn to Ron Paul for an alternate plan to Obama and the tired tax-reductions-will-spur-growth economics begun by Reagan and bastardized by Bush then maybe they will have a chance. Even I liked Ron Paul.

I am rooting for Obamanomics. I am legitimately concerned about the expense but I'm hoping that it does work down the road to stem the tide of joblessness and wealth eradication. Tomorrow I have a job interview for a part-time job against a tide of abyssmal data of escalating layoffs, jobless claims and under-employment. The last time I got a job, it was lost to layoff within 3 months. It would be nice to get a job but I am well aware of the future uncertainties that threaten its tenure. Remember those people who showed up for their first day of work at American Home Mortgage just to find out that the company had collapsed that same day?

Thankfully, the Presidential race took up most of 2008 so we shielded from much of the bad news of 2008. Now that the President has been inaugurated, we have nothing to distract us from the near deafening drumroll of bad economic data and a tumbling stock market down 50% from its high in October 2007.

It probably would not have been so bad if we weren't all in so much debt, from the government on down to the little man. It is the debt that is doing us in. All of the financial instruments bought and created by this debt are collapsing. When so many corporations are borrowing from Peter (the Government) to pay Paul (their creditors) and Peter (the Government) is borrowing from foreign governments and institutions to pay Paul (every single penny of every single bailout package so far), we've taken that simple homily up to a whole new level.

It seems there is always this call for more expansion and that expansion cannot happen without leverage yet every time expansion is based on leverage it collapses and we still have to wait a significant number of years to get back to where we were because in reality it was going to take a significant number of years for a certain percentage of growth to materialize. Speeding up that growth to occur in a few odd years or so gives us momentary satisfaction because we still have to spend the remaining years wallowing with no growth and/or fighting for some sense of growth until the normal passage of years is satisfied. How long was it going to take for us to grow from 1997 on? Certainly it was not 10 years. So now we have to wait to find out where we are on the growth curve. Apparently we were way ahead of where we were supposed to be. How long was it supposed to take for that growth to materialize?

Only real dollars can spur growth. A company takes their profits and puts them back into the business until they reach a desirable rate of return. So far, history has shown us that we can't get ahead of ourselves. If we settled for tiny but steady increases then we would probably not have these massive corrections. In the end, it all has to correct. One could argue that the government has bought into this economic logic of borrowing to spur growth when in actuality there should be no growth. We took it all and enjoyed it all already. The faster we use up the spoils that are not of our labors the longer we have to do without. How many years is it going to be this time around?

Maybe we really don't need Obamanomics at all. Maybe we just need to tread water, put the next phase in place, and wait until we land back on the growth curve of where we were supposed to be in the first place. Maybe this is what Obamanomics should be.