I have suggested for some time that President Obama is completely overwhelmed in his role as President. He lacks the basic intellectual skills and work ethic to analyze problems rigorously and to find effective resolutions.
This inability impacts every aspect of his responsibilities, both domestic and international. It is a sad commentary on the dominance of personal ambition over concern for the people that he has decided to run for a second term. For, without question, President Obama now understands that he simply does not cut the presidential mustard; and never will.
The President’s proposed budget for October 2012 quite frankly is a disgrace. It demonstrates a complete lack of understanding of the nature of the debt crisis that confronts the United States and offers nothing whatsoever towards resolving the long-term problem.
The chronic long-term debt problem arises because public expenditure, at some 25 per cent of GDP, is five percentage points higher than it should be for a vibrant mixed economy and because tax revenues, at 15 per cent of GDP, is five percentage points lower than it should be for a country with an aging population.
The principal drivers of excessive expenditure are the three major entitlement programs: social security, medicare and medicaid, together with the flawed Obamacare program that will begin to exert its impact in 2014. These programs require radical attention, if the debt crisis is not to become a Greece-style debt black hole within the next ten years. President Obama does not address this issue at all in his proposed budget.
Tax reform is essential if increased tax revenues are not to serve as a long-term drag on the U.S. economy. A solution close to a flat tax at rates capable of generating sufficient federal revenues is feasible and even politically attractive. Instead, the President chooses to wage war on the most productive members of society. History should tell him that such assaults are rarely effective. The relative price of tax avoidance falls sharply as marginal tax rates rise.
Worst of all, the President has created a proposed budget that has a zero probability of being enacted into law during the final year of this administration. President Obama’s proposed budget is not a budget proposal at all. It is designed as political red meat to lure disaffected left-wing supporters to the polls in November 2012.
The proposal, fortunately, is dead on arrival in the the U.S. Congress, the Senate as well as the House. Whether or not President Obama is politically dead on arrival at the November 2012 polls depends on the good sense of the electorate.
With a President like Barack Obama, the United States would be far better off with a Westminster-style parliamentary system. At least, the British coalition government quickly identified the debt crisis that it inherited and moved to eliminate it. Obama has been in office now for three long years, and has yet to identify the nature of the beast.