http://fullcomment.nationalpost.com/201 ... and-worse/
Following the bank and auto-sector bailouts, stimulus spending, two unfunded wars and expanded Medicare benefits, it was hard to see how U.S. president Barack Obama could make more of a mess out of America’s fiscal situation than his predecessor, George W. Bush. But he has — and the American people are paying the price.
When Obama was elected, back in 2008, there was hope he could return America to a more sustainable fiscal situation. After all, former president Bill Clinton was running a balanced budget a mere eight years earlier.
While Obama has not instituted a set of communist policies designed to fundamentally alter the country — as many partisan Republicans would have you believe — he has significantly increased spending and government regulations, which are strangling the economy. The national debt rose $4.899-trillion during the eight years under President Bush; it has already risen close to $5-trillion during Obama’s first term.
According to a report released Wednesday by the non-partisan Congressional Budget Office, the U.S. is now in a catch-22: Continuing down this path of massive budget deficits increases the chance of the country experiencing its own European-style debt crisis, which will greatly increase the cost of borrowing. If spending cuts go into effect and the Bush-era tax cuts expire (both of which will happen automatically, unless Congress acts), however, the economy could fall off a “fiscal cliff” — shrinking 0.5% in 2013.
The Obama administration has also vastly increased the regulatory burden on the economy — instituting an average of 72 new major regulations per year, as compared to 36 during the Clinton years and 45 under Bush.
According to a new study conducted by NERA Economic Consulting for the Manufacturers Alliance for Productivity and Innovation, complying with Obama’s new regulations will cost the economy between $240-billion and $630-billion this year alone. As a result, the manufacturing sector expects exports to drop between 6.5% and 17% — costing the industry upwards of $500-billion.
Some people may dismiss these numbers because the study was funded by the manufacturing industry. But there can be no doubt that it costs businesses huge sums of money to comply with the modern regulatory state.
It is especially ironic because the U.S. has numerous subsidies and trade barriers designed to protect the manufacturing industry. Such policies lead to higher consumer prices, higher taxes and less efficient industries. The simple solution would be to decrease the regulatory burden that manufacturers, and other businesses, face. Unfortunately, Obama has gone in the opposite direction.
It would, of course, be unfair to blame Obama for a mess that has been created over decades by both political parties. Ronald Reagan and George W. Bush presided over massive spending increases; Clinton and Bush II also increased regulation; while Congress has substantially increased the of new laws it passes on an annual basis since the early 1980s.
But Obama’s record in his first term is still dismal. For all his talk about creating jobs and improving the economy, Obama’s policies have only served to increase the cost of doing business and divert money from productive sectors of the economy to increase government spending. The only question is whether the Republicans can fix the fiscal mess they helped create.
To his credit, Mitt Romney has at least been talking about the regulatory burden the American economy faces. Paul Ryan is, likewise, one of the few politicians talking about entitlement reform.
But Romney has explicitly stated he will not use the Ryan budget as a template for his own economic policies — which he has left incredibly vague. And even the Ryan budget does little to cut real spending in the short term, partially because it does not cut military spending, which is arguably as big an issue as entitlement spending.
Not only are policy makers stuck in a catch-22 over how to prevent the economy from falling back into recession while staving off a looming debt crisis, the American people are also facing a similar conundrum in choosing the next president: Neither party has a track record to suggest it is willing and able to address the country’s serious economic issues, and neither is willing to work co-operatively in a political environment that is entrenched along partisan and ideological lines.
Americans may soon have to resign themselves to the fact that this election is — as an episode of the TV series South Park once characterized all elections — a choice between a “Douche” and a “Turd Sandwich.”
National Post
