Here's a great business model.  Start your company with the idea that it's going to go bankrupt.  Then, when it folds, inform your investors that the business was a success because it did exactly what you expected.

That's more or less what Obama has done with every "investment" government has made over that past three years.  The Energy Department's failed green energy loan program is just one example.  It appears that much of the $36 billion earmarked for alternative energy firms, including $500 million to Solyndra alone, has been squandered.  If that money had stayed in the private sector, it would have produced jobs.  As it is, with real unemployment running at 20%, the president has wasted billions on companies that were destined to fail.  That "investment" produced nothing except more debt and slower economic growth.

It is not surprising, given his lack of real-world experience, that Obama does not understand the meaning of the word "investment."  Like most in his party, Obama thinks every kind of government spending is an investment.  His thinking is so twisted that he speaks of all sorts of welfare, including increases in the earned income credit and extension of unemployment benefits past 99 weeks, as an investment.  Spending on affordable housing is an investment, benefits for the homeless are an investment, funding that makes its way to the coffers of teachers unions is an investment.  Just about everything is an investment, except an investment.

A real investment is a commitment of capital to an enterprise that has a good prospect of producing a reasonable profit.  The average real, inflation-adjusted return for the U.S. stock market over the past 100 years (1910-2010) was 8.21%.  The "annualized return," calculating the oversized effects of down years, was 6.24%.  This means that an investor with no special aptitude or intelligence would have earned 6.24% (or slightly less, depending on trading costs and taxes) over the past century simply by purchasing and holding an index of U.S. stocks.  That may not sound like a lot, but at 6%, $10,000 invested in 1910 would amount to $3,390,000.  That's $3,390,000 better than Obama has done on his "investments."

This may sound like second-guessing.  But the fact is that Obama "knew from the start that the loan guarantee program was going to entail some risk," a fact the president admitted on October 6.  The purpose of the loans, he tells us, was not to make a profit.  Nor was it to create jobs by nurturing truly successful businesses.  If Obama really wanted to create jobs, all he would need to do is invest in ExxonMobil and Chevron.  Those companies are creating jobs, and in this quarter -- the same quarter in which Solyndra and other government-supported solar companies filed for bankruptcy -- they reported increased profits of 41% and 48%, respectively.

Exxon and Chevron are just two examples of companies in the private sector that are creating jobs.  In fact, over the past 200 years, private companies around the world have produced jobs and increased wealth at an astounding pace.  Between 1820 and 2000, global production increased by 5,500%, according to World Bank WDI (World Development Indicators).  This development was even greater in the Western democracies and in other nations, such as Japan and South Korea, that embraced the free market.  The only thing that stands in the way of future development is the damage that socialists like Obama do to the free market.

Obama's $36-billion loan guarantee program is only a small part of his 2009 stimulus bill, and that bill is only a small part of his overall spending over the past three years.  In his FY2010 budget, amusingly subtitled "A New Era of Responsibility," Obama requested $3.551 trillion, an increase of 14.5% over FY2009.  How's that for responsibility? 

If that 14% increase in spending had remained in the private sector, it would likely have produced an inflation-adjusted return on investment of 6.42% over the next century.  (This is not just the estimate of 100-year returns by private economists such as Jeremy Siegel, but of the Social Security Office of the Actuary as well.)  That is the kind of investment that produces long-term growth, prosperity, and jobs.

By comparison, Obama's "investments" in green energy, welfare, unemployment benefits, and union subsidies have not worked out so well.  Obama's socialism has produced nothing, in fact, except the prospect of permanent unemployment for 25 million Americans and declining incomes for the rest.  This is what happens when we have a president who thinks that profit is a dirty word and capitalism is evil.

If Obama is allowed to continue "investing" on the part of the American people, the effect will be not just a return of zero, but the loss of our capital as well.  What that means is a collapse of our economy that puts us at the level of communist Cuba or North Korea.

Don't think that that will not happen here.  Obama's response to the failure of his first and second stimulus bills, and to the failure of two rounds of quantative easing under Fed Chairman Bernanke, has been to demand more spending.  That includes more spending for green energy, more welfare, more unemployment benefit extensions, principle forgiveness for underwater mortgages, bailouts for indebted states, and accommodation if not forgiveness for student loan debt.  Obama calls all of these boondoggles "investments."  The fact is that each of these giveaways is another step toward government control of the economy, and with it poverty and dependence for all.

Jeffrey Folks is the author of many books and articles on American culture, most recently Heartland of the Imagination (2011).