President Obama’s State of the Union address recycled the same old tired rhetoric that he’s been peddling since 2009. Instead of addressing how to reduce the nation’s $16 trillion debt and lower the high unemployment rate, Obama proposed more reckless spending and regulations that will further stifle economic growth in this country.
He started his speech with predictable statements on how the economy is allegedly growing stronger—despite the near eight percent unemployment rate calculated by the Bureau of Labor Statistics. That official rate does not even factor in the 3.25 million out of work Americans that are so hopelessly discouraged that they haven’t looked for a job in over a year.
Obama gave few specific proposals in his near hour long speech. He repeated one of his 2008 campaign promises to raise the minimum wage. Obama pledged to raise the minimum wage to $9.50 an hour by 2011, but it still stands at $7.25 an hour. Now he proposes increasing the minimum wage to $9 an hour.
The problem with the minimum wage is that it hurts the very people it supposedly was designed to help. There is a direct correlation between increases in the minimum wage and unemployment for uneducated and unskilled workers. Obama spoke about opening the doors of opportunity for our youth, but a $9 minimum wage would prevent many inexperienced young people from getting an entry level job and gaining valuable skills necessary to move up the economic ladder.
Those millions of unemployed Americans likely did not hear anything from Obama that would inspire much hope. Struggling middle class Americans that saw their payroll taxes go up, due to Obama’s “fiscal cliff” deal, should have scoffed at his talking points about reigniting a thriving middle class. This is just one more instance where Obama broke his campaign promise not to raise taxes on those making less than $250,000 a year.
American taxpayers lost big time in the fiscal cliff negotiations. Also known as the New Year’s Day Tax Massacre, it increased payroll taxes on a whopping 77 percent of Americans and contained no real spending cuts.
The so-called spending cuts that it did contain were fake cuts. Under the sequestration in the fiscal cliff deal, federal spending would climb $2.4 trillion instead of $2.5 trillion over the next decade. The federal government would still spend more next year than it did this year. And somehow in Washington, that is considered a “cut.”
This is how fuzzy math works in Washington: Let’s assume that you currently spend $300 a month on groceries. You have reason to believe that you will be spending more on groceries in the coming years. In order to prepare, you map out a grocery budget for the next year anticipating that you will be spending $400 a month on groceries. You later revise your budget and plan to only spend $350 a month.
Congratulations. You just cut $50 in Washington baseline spending math.
Believe it or not, Obama is fighting against $1.2 trillion in anticipated reductions to spending increases over the next ten years. That number seems tiny considering the fact that the federal deficit was $1.3 trillion in 2012 alone.
One of the most interesting lines of the night was: “the greatest nation on Earth cannot keep conducting its business by drifting from one manufactured crisis to the next.” I wholeheartedly agree, but it seems a bit ironic coming from someone signed the Budget Control Act which essentially created the fiscal cliff “crisis” in the first place.
Another manufactured crisis coming up is the U.S. reaching the $16.4 trillion debt limit. We wouldn’t have to deal with a debt ceiling fight every year if Washington actually got serious about cutting spending. But there was not a single specific spending cut that Obama mentioned in his speech.
Per usual, Obama called for more government spending for clean energy. There is no problem with clean energy. There is a problem when Obama wants to force taxpayers to subsidize politically-connected energy companies. We all know how the now bankrupt Solyndra turned out. Energy companies should compete on the same playing field—with no corporate welfare handed out to any corporation.
The most interesting aspect of Obama’s State of the Union address is what he didn’t say. He didn’t touch on how to fix the entitlement crisis. He didn’t mention the Federal Reserve and inflation. Nor he did tell the Senate to pass a budget for the first time in nearly four years.
Obama is still in campaign mode in his second term. We heard more lofty talk and empty promises, but no substance.
Julie Borowski is a Policy Analyst at FreedomWorks, an organization dedicated to lower taxes, less government, and more freedom. Her writings on economic policy have appeared in numerous newspapers and online outlets. She is on the Board of Advisors for the Coalition to Reduce Spending and she launched an independent YouTube channel called TokenLibertarianGirl in June 2011.
She was previously selected to be a Charles G. Koch Summer Fellow with the Institute for Humane Studies where she worked at the Center for Competitive Politics. Most recently, she was a government affairs associate at Americans for Tax Reform.
Julie has volunteered for political candidates in Kentucky and in her home state of Maryland. She graduated Magna Cum Laude from Frostburg State University in May 2010 where she studied political science, economics and international studies. She is now located in Washington, D.C.