Friday, August 12, 2011

Downplaying the Downgrade

In his press conference on Monday, President Obama was correct on one point:  our economic crisis is not from a lack of plans or policies. Realistically, it is from a lack of leadership over the past two years to implement ones that work. Standard & Poor’s specifically mandated that for the U.S. to maintain its “AAA” credit rating, spending on entitlement programs had to be cut with a demonstration that those in place could be funded. How much of this was addressed in the self-congratulatory debt bill that was passed by Congress at the 11th hour? Absolutely none of it. Simply because Democrats, more so than Republicans, were unwilling to sacrifice certain so-called “sacred cows”; instead they sacrificed the nation’s credit rating for a higher debt ceiling, which is little more than an increased spending limit.

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To hear the politicos on the left – despite having control of Congress for two years, failing to pass a budget and aware of potential economic troubles down the road if nothing were done – none of this is their fault. It’s the fault of those opposed to the agenda of the left, an agenda in which bureaucracy, entitlements and the deficit grow beyond control and stays the course to economic collapse. Again, it’s the fault of George W. Bush. That is what a society of entitlements breed:  placing responsibility on others, instead of on yourself. Rather than attack a predecessor who left office over two years ago, the current administration would be better served in highlighting its achievements to stymie existing economic woes – no matter on whose watch they occurred. Yet, that is the only viable option for the Obama Administration, because there are no highlights:  unemployment that continues to hover over 9%, after inheriting a rate under 6%; Gross Domestic Product (GDP) at a paltry 1.30%, which stood at 5% just a year ago; and a federal deficit that has grown by over $4 trillion in just two years, which only stands to go higher with the aforementioned increase to the debt ceiling.

And so, the president must fall back on the age-old mantra that the problems of today are the problems of yesterday, rather than being a leader who has led the country out of the crises.

Of course there are echoes of the past in the current economic climate, but not of recent memory. The calendar may read 2011, but it feels a lot like 1931. Used loosely, the term “feel” even seems overblown because it certainly doesn’t “look” like it:  everyone on their mobile phone playing games despite being “so busy at work” or “looking for a job”; people still driving around in their gas guzzlers while complaining about the price of gas; and going out for dinner because “there’s nothing to eat at home” or “I didn’t feel like cooking.” Not exactly The Great Depression, where you passed your unemployed time staring at the wall while bouncing a ball, standing in the soup kitchen line for scraps or actually looking for a low-paying but honest days work. There is still the sense though – that “feeling” – it could all happen again in an instant.

The question is when global markets collapse again (and they will) and global conflicts erupt again (and they will), who saves the world this time? Or, in a haze of apathy and inaction, has the world already been lost?

©2011 Steve Sagarra

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