The president’s annual state of the union address is another example of how dysfunctional our government in Washington has become.
Article 2, section 3 of the US Constitution says that the president “shall from time to time give to the Congress Information of the State of the Union….”
The president is the chief executive of our government. As chief executive, it makes sense that he report periodically about the state of affairs to the body responsible for passing laws, the Congress, so they have a sense of what needs to be done.
If handled correctly, the State of the Union should be like the annual report of a corporate chief executive to shareholders. It should convey key information so that stakeholders know what’s going on.
But that’s not what happens. This isn’t about informing stakeholders. It’s about political calculations and pitching a laundry list of proposals, invariably with wonderful benefits, and rarely any perceivable costs, designed to make the President and his party look good.
President Obama introduced in this year’s State of the Union address his proposal to create new retirement accounts for, in the words of the White House, “the millions of low and middle-income households earning up to $191,000.” What they are calling “MyRAs.”
How could enhancing retirement savings not be a good idea? And, even better, it is a free lunch. Again in the words of the White House, “the account balance will never go down in value” and will be totally secure because it will be “backed by the U.S. government.”
President Obama is creating these accounts with the greatest of ease, without even a new law from Congress, by doing what he has done better than any president in American history. Drive the U.S. government into debt.
These wonderful new retirement accounts will receive bonds from the U.S. Government. And who guarantees them?
Please, dear reader, if you are a U.S. taxpayer, look in the mirror and say “me.”
If the State of the Union was really about the president informing Congress and the nation, he would have reported the following from the recent 2013 Long-Term Budget Outlook report of the Congressional Budget Office:
“Federal debt held by the public is now about 73 percent of the economy’s annual output…higher than at any point in U.S. history, except a brief period around World War II, and it is twice the percentage at the end of 2007.”
“CBO projects,” the report continues, “that federal debt held by the public would reach 100 percent of GDP by 2038….even without accounting for the harmful effects that growing debt would have on the economy.”