Obama's Iceberg
Around midnight on April 15, 1912, there were a few minutes when Capt. Edward Smith of the Titanic realized his ship was going down -- six watertight compartments breached, less than two hours to float -- yet his passengers slept in happy ignorance. A historical fate hardened while most of the participants dreamed on.</br></br>The jobs report last week opened a long gash beneath the waterline of President Obama's legislative agenda. Few realize it, but a scramble for lifeboats is about to begin.</br></br>On closer inspection, the economic news, which seemed bad, is even worse. Not only did unemployment rise to 9.5 percent but wages fell, undermining the consumption needed to revive a consumption-driven economy. Unemployment increased among "breadwinners" -- married men and women who head households -- also making major family purchases more difficult. Recent increases in unemployment benefits and food stamps have helped many Americans pay for food and rent. Jobs, however, are what lead to the purchase of furniture, cars and homes. Paired with a decline in business investment, these trends make a second-half recovery less likely.</br></br>The stimulus package hasn't been very stimulating -- as many economists predicted. Pouring money into the economy through a thirsty sponge of federal programs -- the preferred method of Congress -- is slow and inefficient. In retrospect, all of the stimulus funds should have been given to individuals directly from the tap.</br></br>Obama's spending ambitions would have been jaw-dropping even in the best of economic times. Federal spending this year is about 28 percent of gross domestic product -- a figure exceeded only when Franklin Roosevelt was fighting a global war against Germany and Japan. Along the fiscal path Obama has chosen (according to the Congressional Budget Office) our national debt will more than double in 10 years and will amount to 82 percent of the entire economy.