Obama Delivers A Political Speech Not A Plan

Well at least we now know the source of our fiscal imbalances — George W. Bush. We were on the road to endless surpluses until he cut taxes and gave seniors coverage for their drugs. If not for that bounder Barack Obama would not have had to stand up in front of the nation and declare that he was just kidding when he presented his 2012 budget a couple of months ago.

But stand up he did and after fixing blame for the mess we’re in, he proceeded to give a preview of his 2012 campaign stump speech. To be gracious, one might characterize what he said as a presentation of policy or perhaps philosophy but it decidedly was not a plan in any sense of the word. Short if not devoid of specifics, it reiterated Democratic talking points.

After the traditional bow to reigning in discretionary spending and suggesting that he would whack the Department of Defense for $400 billion, somehow, someway he proceeded to get to the crux of his proposal. Tax the rich and no quarter on ObamaCare.

Trying to tie his wagon to Simpson-Bowles, he proposes taking a couple of shots at rich people. First, never again will he agree to an extension of the Bush tax cuts for the rich. They are going back where they were plus the add-ons in his health care plan. Second, he’s going to pare back their deductions. Exactly how much he plans to wring out of these unfortunates wasn’t said.

If you wonder how that relates to the recommendations of the Deficit Commission, welcome aboard. They proposed reducing rates, eliminating tax expenditures and overall broadening the base. I guess that he thinks that cutting back deductions for those who fall into the wealthy category amounts to keeping faith with the Commission. If you have a better explanation let me know.

At least when it comes to Medicare we have a bright line. Ryan wants to rely on individual choice and market forces to control costs. Ryan’s plan adjusts payments based on CPI+1%. Obama is sticking by the central planning concept embodied in his health plan. He’s more tolerant of increases in costs, accepting GDP+0.5% as his breaking point. Probably the only clear delineation of policy that he offered and a clear difference for voters to select.

There was nothing in this speech that invited compromise. The President, to the extent he presented any coherent plan, was in defiant take it or leave it mode. Clearly he wants to fight this out in the 2012 campaign and undoubtedly believes that he will prevail. Given the stakes and the import the final decisions are going to have for the basic economic life of Americans that is where the debate properly belongs.

So, we will no doubt reach some accommodation on the debt ceiling, though it may well go down to the wire. Then we can hash out where we go with this economy via probably one of the more consequential elections in this country’s history.

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About Tom Lindmark 401 Articles

I’m not sure that credentials mean much when it comes to writing about things but people seem to want to see them, so briefly here are mine. I have an undergraduate degree in economics from an undistinguished Midwestern university and masters in international business from an equally undistinguished Southwestern University. I spent a number of years working for large banks lending to lots of different industries. For the past few years, I’ve been engaged in real estate finance – primarily for commercial projects. Like a lot of other finance guys, I’m looking for a job at this point in time.

Given all of that, I suggest that you take what I write with the appropriate grain of salt. I try and figure out what’s behind the news but suspect that I’m often delusional. Nevertheless, I keep throwing things out there and occasionally it sticks. I do read the comments that readers leave and to the extent I can reply to them. I also reply to all emails so feel free to contact me if you want to discuss something at more length. Oh, I also have a very thick skin, so if you disagree feel free to say so.

Enjoy what I write and let me know when I’m off base – I probably won’t agree with you but don’t be shy.

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