PALO ALTO, California — Barack Obama is the Barry Bonds of Big Government. He offers America liberalism on steroids. While he earns grand slams for spending and debt, his pitiful results constitute strike-outs.
In an address to the Hoover Institution here last Monday, Stanford University economics professor Michael Boskin detailed President Obama’s truly historic profligacy.
Under Obama, federal spending has risen from 20.7 percent of Gross Domestic Product to 25.3 percent, Washington’s largest slice of apple pie since 1945. In Fiscal Year 2011, which ended September 30, Uncle Sam spent a record $3.6 trillion, up an inexcusable 4 percent since FY 2010. So much for Obama’s demands for “shared sacrifice.”
Obama’s spend-o-rama includes federally funded green jobs that Boskin dismisses as “the leprechaun economy.” The apotheosis of this blarney was last month’s $1.2 billion Energy Department loan guarantee to Richmond, California’s SunPower Corporation. Its solar-equipment project promises 15 permanent positions. Cost-per-job-created: a staggering $80 million each.
Even worse, if possible, the Fox Business Network’s Gerri Willis reports that SunPower received this federal largesse even though its share price has plummeted 93.5 percent — from $133.61 (its December 7, 2007 peak) to $8.09 on September 30, when it won Energy’s loan guarantee. SunPower’s market capitalization stood at some $800 million, just below its $820 million debt. SunPower released an earnings warning after scoring this federal subsidy. SunPower also faces a class-action lawsuit in which investors claim that it has made false public statements.
Such fiscal recklessness helped swell FY 2011’s federal deficit to $1.298 trillion, just ahead of FY 2010’s $1.294 trillion in red ink and FY 2009’s record $1.416 trillion. Obama has authorized three consecutive, trillion-dollar deficits. Now he demands another $447 billion for Stimulus, Jr.
All this, Boskin observes, has pushed the federal debt to 67 percent of Gross Domestic Product, the highest since the aftermath of World War II. No wonder Standard & Poor’s downgraded America’s sovereign debt last August 5 — another first.
Obama’s milestone-setting expenditures would be bad enough if they were the spectacularly high price for restoring prosperity. Instead, Obama has impoverished the Republic, for nothing.
Only 58.1 percent of the population is working, the lowest level since 1983, notes Boskin, President George H.W. Bush’s chairman of the Council of Economic Advisors and a Hoover senior fellow. Among America’s 14 million unemployed citizens, a record 45.9 percent have been jobless for more than 27 weeks.
Boskin compared snapshots of Obama’s and President Reagan’s post-recession recoveries, 27 months after each downturn hit bottom. In September 2011, on Obama’s watch, non-farm payrolls had grown 0.6 percent, yielding 841,000 jobs since June 2009. Under the tax-cutting, business-boosting Reagan, non-agricultural employment swelled 8.7 percent, generating 7.7 million new jobs.
Team Obama predicted that his stimulus would limit unemployment to “approximately 7.0%.” In fact, unemployment seems stuck at 9.1 percent, despite Obama’s $840 billion stimulus. Boskin calculates that this 2.1 percent gap equals 16 billion foregone work hours. Even if one believes that Obama stimulated 3 million jobs, that equals $280,000 per position — nearly quintuple the analogous $58,510 private-sector cost.
This stagnation now finds 51 percent of Americans too poor to pay federal income tax (a modern record) while 47 percent of Americans receive at least one form of federal transfer payment (an historical high), as dependency on the ever-expanding state expands.
Obama’s stack of bills, Boskin predicts, means higher taxes — soon. To underwrite Obama’s deficits, top California earners, for instance, could see combined federal and state income and payroll taxes total 70.8 percent of income by 2016. Those earning just $60,000 could pay 52.4 percent to Washington and Sacramento. Non-Californians also should anticipate higher taxes.
“A CEO who got it wrong this many times would be gone by now,” Michael Boskin said. Instead, Obama barnstorms campaign events, barks at the rich, and bellows for further federal outlays.
While Americans wallow in the poor house, Barack Obama is bound for the Unlimited Government Hall of Fame.