PrintSeptember 29, 2010
The Sword Hanging over Washington, D.C.
Damocles, discovering too late the threatening sword hanging above his borrowed throne, prefigures Obama, presiding under the suspended impact of unrelenting unemployment. He is worse off than was Damocles: His own policies must bring the sword down onto him.
The official unemployment rate is 9.6%, rising to 16.7% after adding those no longer listed as actively job-searching. It's 22% using Shadowstats.com's corrected data. The average worker is out for eight months; many will never return to work, as rising early Social Security applications indicate. Those facts are significant in the 13% of homeowners delinquent on their mortgage payments. Beyond them, mortgage debts exceed the value of 70% of Nevada homes and 33% of California's per MSNBC, and that exists elsewhere too -- 23% nationally, per one estimate... This outlines the scope for the future tent cities, field soup kitchens, and tenth-floor window-jumps classically attending depressions but currently suspended by the flood of various federal benefits...which cannot be unending.
More than 9 million people are collecting direct unemployment benefits; more than 39 million are using food stamps, including one in every four children; and Medicaid usage is spiking, too. All these increases reflect unemployment. The states fund primary unemployment insurance and up to half of Medicaid; extended unemployment, the balance of Medicaid, and food stamps are federal money. But 47 of the states are squirming under budget crises, and the Feds are broke, with seemingly unrepayable debt and trillion-dollar deficits.
Those and any future unemployed beneficiaries are the sword hanging over Obama (and Congress) by the thread of benefits keeping these people afloat. But states can't run deficits; they are cutting benefits at an increasing pace. The Feds are borrowing hugely to continue the 97% of budgeted federal spending that goes to pay the entitlements mentioned -- and others -- plus interest on the debt. That's not sustainable; Obama's sword is suspended by a fraying thread. When the benefits fail, the beneficiaries will be stranded and looking toward Washington, D.C. The Baby Boomers and their successors aren't famed for patience or sweet reason; the resulting tantrum could make the current electorate's displeasure resemble a Tea Party.
The unhappiness will be compounded by the president and his Democrats' own policies; they are using energy, trade, monetary, tax, and regulatory policy in ways that will restrain commerce and further reduce the standard of living. They are throwing a drowning man an anchor, and they justly deserve a falling sword.
But what of the Republicans? Come November, they may take charge in Congress. What then? They've provided a "Pledge to America" advertising their intentions; unfortunately, it's silent on earmarks, the debt, and any specific spending plans. It also promises some things that the Republican leadership has already said are unlikely. Modern Republican performances have mostly been "Democrat Lite," so that seems the way to bet. Would you prefer to be dinner for a pride of lions...or will you be happier if it's just a pack of hyenas?
Remembering that the debt-enlarging deficits are almost entirely entitlement money, expecting any current politicians to cut that spending significantly seems a reach, especially with neither party even willing to talk about it. Congressional Democrats are spreading out, wishing a safe distance when Obama's sword falls; Republicans say no and mouth platitudes. Neither offers specific sanity for an electorate of grownups, both clearly see the electorate as spoiled children, and neither party wishes to replace Herbert Hoover. But with the right timing, either could.
Perhaps they are waiting for the sword to fall, which seems within reach; Business Insider recently noted the impressive numbers of directly funded "stimulus" jobs about to end, and the continued extensions of expired unemployment benefits after November elections is questionable. Unquestionable are the ongoing cutbacks in U.S. business as government-imposed costs continue rising. It all seems to be coming to a head. Every year, people bet the date ice will start leaving Alaska's Tanana River; maybe it's time now to start watching Obama's sword. Though it will fall on Obama, it will be felt by many.
