President Obama's State of the Nation speech said it, true and straight. The US has screwed itself into the ground, and we did it to ourselves:
"Now, if we’re honest with ourselves, we’ll admit that for too long, we have not always met these responsibilities – as a government or as a people."
The President also acknowledged that our decline has been ongoing for some time:
"The fact is, our economy did not fall into decline overnight."
But he didn't say how far the US has fallen. At the end of World War II, we were the only large industrial power in the world. Germany and Japan were in ruins. Britain and the Soviet Union had been bled dry. Europe would struggle for years, and the economic powerhouses of East Asia wouldn't appear for decades. A colonial legacy left much of the rest of the world undeveloped. In contrast, the US was powerful and prosperous.
Yet despite this tremendous head start, the US has let its competitors catch up, no matter how you define the race. Per capita income? Life expectancy? Educational achievement? Investment in renewable energy? Social support systems? We are not number 1 in any of these, and we are falling farther behind. As the President said:
"Our children will compete for jobs in a global economy that too many of our schools do not prepare them for."
Did we invest in our future with better education, research and development, advanced manufacturing processes? We played our superior hand by behaving like spoiled playboys and wasting our wealth on big homes, flashy cars, and immediate consumption. We had a privileged position in the world, and yet we lived beyond our means. We built up a mountain of debt, and now that mountain is suffocating us. As the President said, this country followed totally short-sighted policies:
"In other words, we have lived through an era where too often, short-term gains were prized over long-term prosperity; where we failed to look beyond the next payment, the next quarter, or the next election."
As much as we wasted, maybe we could have muddled through if it hadn't been for the kleptocratic idiocies of the past few years:
"A surplus became an excuse to transfer wealth to the wealthy instead of an opportunity to invest in our future. Regulations were gutted for the sake of a quick profit at the expense of a healthy market. People bought homes they knew they couldn’t afford from banks and lenders who pushed those bad loans anyway."
This President is far too honest and outspoken. No wonder Wall Street hates him. The President also said how difficult the road back to prosperity is:
"The answers to our problems don’t lie beyond our reach. They exist in our laboratories and universities; in our fields and our factories; in the imaginations of our entrepreneurs and the pride of the hardest-working people on Earth."
In other words, the solution is not government policy. We have to pay off our debt and work our way out of this hole. That will take years, so don't look for an immediate fix. Unfortunately, the administration isn't waiting for time to heal the wounds:
"Now is the time to act boldly and wisely . . . "
You mean by encouraging people to take out loans, spend their money, and incur more indebtedness? Isn't that how we got into this mess? This risks more and bigger bubbles.
"You see, the flow of credit is the lifeblood of our economy."
He means it. He's going to push money at the banks, no matter how much debt is piled onto the taxpayers and their children.
"You should also know that the money you’ve deposited in banks across the country is safe; your insurance is secure; and you can rely on the continued operation of our financial system."
On the contrary, the share prices of the big banks indicate indicate anything but trust in their solvency. The only way we can have faith in the security of our bank deposits is if the Federal Government adds to the dwindling reserves of its deposit insurance. How much more government debt will that pile up?
"So I ask this Congress to join me in doing whatever proves necessary."
Whatever proves necessary . . . as if he is backed into a corner, with no plan and ready to do anything, no matter the long term consequences.
