Saturday, August 25, 2012

Five Dollars Of Debt For Every Dollar Of Growth

If I were to cite the most damning statistic that should doom Barack Obama’s reelection prospects, it would be this: Obama has been running up five dollars worth of debt for every dollar of economic growth his spending generates.

That’s a really bad deal.

For the fourth consecutive year, Barack Obama has run up more than a trillion dollars in debt. And for the fourth consecutive year, economic growth has been feeble.

Do you remember September of 2009? Joe Biden boasted that Barack Obama’s economic stimulus package was succeeding beyond expectations: “In my wildest dreams, I never thought it would work this well.”

How’d that work out for you?

Does anyone remember Recovery Summer? That was in 2010. In June of that year, Obama sent Biden out again on a six week tour boasting about all the jobs that the stimulus package had created and was about to create.

By August, Recovery Summer was officially a flop. The administration’s official line was that Recovery Summer would usher in a new era of economic prosperity that would create between 250,000 and 500,000 jobs per month. During the months of May, June and July, the combined net jobs gain was only 83,000.

Ah, but 2011 was going to be so much better. The official forecast predicted that the Gross Domestic Product would soar by 3.7%. They actually bragged about this.

But Obamanomics couldn’t even deliver that. Last year the economy grew at a feeble 1.6%. That’s 56% below the forecast. The forecast for this year was for 4.0% growth. As of the most recent measurements, the economy is on course for a 1.8% growth in the GDP, and the pace has been steadily slowing. At this rate, we’ll be lucky to match last year’s growth.

And what little growth we’re getting is coming at the cost of more than a trillion dollars in debt added annually. Or, if you prefer, in order to prop up his historically feeble economy, Obama is borrowing five times as much money as his investments return, for a net loss of 80%.

Earlier this year, Obama ridiculed the notion that economic growth could be spurred by the simple removal of the shackles that he has placed on the economy. But his denial of the construction permit for the Keystone XL oil pipeline from Canada destroyed tens of thousands of jobs in the short term and hundreds of thousands in the long term. And there might be no repairing that damage because Canada is now negotiating contracts that would sell the oil that pipeline would have carried to China.

Obama destroyed an estimated 100,000 jobs with his illegal Gulf of Mexico oil exploration moratorium.

The Pebble Mine in Alaska is estimated to contain a trillion dollars worth of gold and copper. But it’s unlikely that a spade will ever be turned because of Obama’s Environmental Protection Agency.

Who knows how many jobs will eventually be lost because of Obama’s war on coal? Scores of coal fired electrical power plants have been shut down or will soon be shut down because of regulations imposed by Barack Obama, just as he promised he would do early in 2008.

The oil and natural gas boom initiated by George W. Bush is predicted to create 3.6 million jobs and has the potential to add 3% to the GDP, assuming that it isn’t regulated out of existence. Obama has declared his opposition to oil exploration, explaining that allowing drilling "would merely prolong the failed energy policies we have seen from Washington for 30 years."

How about Obama’s failed energy policies of the last 3 years? Solyndra is just the most famous of many failed initiatives. Obama’s stimulus earmarked tens of billions of dollars of green energy companies that have been failing at a horrific rate.

As famous as the Solyndra failure was, the collapse of Amonix in Nevada was probably the most instructive. Even with Obama subsidies and with the brightest and most unrelenting sunlight in North America, the solar energy generator managed to go bust.

There’s a message there.

Obama’s hostile business climate has forced companies to sit on trillions of dollars that they’d rather invest. But they’re not going to invest it in this environment. Eighty percent losses don’t interest the real economy.

There is no greater impediment to American prosperity than this president. There could be no greater stimulus than his retirement.

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