“Not rivals for power but partners for progress” were the wise words from President Kennedy that President Obama borrowed to begin his State of the Union address, and they definitely got my attention. Maybe, just maybe, there might be a little hope… Not.
The code words were not so hidden. When the president talked about investments, he was basically saying we need to spend more. Regrettably, to spend more we need to borrow more. Refusing to admit that Washington has a spending problem does not solve the problem — it only makes it bigger. But by casting all this new spending as an investment, the president hopes America will see it as a good thing. It is not.
I guess it will be up to the president to show America whether he is serious about making partners or whether he is just a rival for power.
- Rosario Marin, Former U.S. Treasurer
If a financial advisor were to tell a couple to borrow from their credit cards at a rate of 24 percent APR and put that money on a long term investment with an estimated 8 percent rate of return, that would be foolish. Yet, that is precisely what the president is asking America to do. We cannot spend money we do not have, especially when during the last four years we have borrowed more money than during President Bush’s eight years in office.
Before we can think of spending (investing, as President Obama called it) we have to create wealth; unfortunately, the economic policies he has advanced during his last four years, namely borrowing and tax increases, have had the opposite effect. Far from getting us out of a severe recession, they made it deeper and longer. To make matters worse, to appease the labor bosses the president talked about increasing the minimum wage. That proposal shows his lack of understanding that increasing the minimum wage usually causes a decrease in the number of jobs. Now is not the time to increase the minimum wage, with the economy so fragile.
The president talked about equal pay for women, a proposal which I wholeheartedly agree with, but he forgot to mention that in his own White House there seems to be a lack of equality in pay for the same job. But hey, do as I say not as I do.
Some of the programs he is advancing, such as the fix-it-first program for bridges, sounded to me as the recycled version of the shovel-ready program, which was an unqualified disaster. Furthermore, weren’t those bridges supposed to be fixed with the mega stimulus package he already got?
Interestingly enough, when he talked about putting the nation’s interest before the party’s, why did it sound like an admonishment to the Republicans? Why did the Democrats stand up, clapping as if they don’t put their party’s interest before the nation’s interest? When will the Democrats stand up to the unions and their throng of special interests?
Senator Marco Rubio, in his response, said that the president’s solution is to spend more and borrow more — an old idea that has failed every time it has been tried, I definitely agree. We cannot spend our way to prosperity.
In the end, I guess it will be up to the president to show America whether he is serious about making partners or whether he is just a rival for power.
Rosario Marin was the 41st Treasurer of the United States and is co-chair of the American Competitiveness Alliance.