I don’t know where I’m running now, I’m just running on
Running on-running on empty
Running on-running blind
Running on-running into the sun
But I’m running behind.
Those lyrics from Jackson Browne’s “Running on Empty” say a lot about the state of the U.S. economy today—and Barack Obama’s political fate as well. Economically, this nation is running on empty. Politically, the president isn’t far behind.
The political class in Washington recently wrapped up another of their melodramas when they passed the debt limit extension on the same day it was alleged to be expiring. The nation tired of watching them fobble about like Keystone Kops and Inspector Clouseau. Working folks thought they deserved better and, according to polling data, were certainly not impressed with the “solution” to the debt limit problem. It is hard for the real working class—those who pay their bills and don’t get government checks—to understand how the federal government can agree to take on over $2 trillion in additional debt to continue a federal spending trend that will result in a national debt of well over $20 trillion 10 years from now. They are dumb-struck that our president and members of Congress find it hard to cut $20 billion out of a budget next year that will run over a trillion-dollar deficit.
The talking heads in the media and the Potomac dilettantes told us that, if the debt ceiling wasn’t raised by trillions so the federal government could avoid making painful cuts, the stock market would crash and the fiscal world as we know it would be staggered. So the debt limit was increased—and guess what? The stock market plunged, erasing all of the gains it had made since the beginning of the year. Investors everywhere pulled out of stocks—and even commodities—and hoarded cash. The folks in Washington don’t seem to understand the real problem causing the economic earthquakes that are killing jobs by the millions in America.
Any government that continues to suck trillions of dollars out of the private sector economy, run trillion-dollar deficits, and vastly expand the national debt while alleging to reduce it is killing the investor confidence necessary to bring the economy back. Excuse us poor bumpkins out here in fly-over America who just don’t get it. We are so dumb that we believed the problem wasn’t the debt limit but the enormous debt itself. The debt increase is real and enormous. The “cuts” are few and far between and, if they occur at all, will happen far into the future. What we do understand is how our annual household budgets relate to the federal budget and spending if put into proper perspective. The amount of annual federal income is equivalent to a family earning $21,700 yearly. The amount the federal government is spending would equal a family outlay of $38,200 per year. The amount of annual debt being run up is equivalent to $16,500 for our typical family. The outstanding balance on the family credit card from prior debt (to continue the comparison) would be $142,710—and the amount of spending the family is cutting next year to address their suffocating debt would be only $385. Families don’t live like this. Our federal government does.
We have seen this movie before. It doesn’t have a good ending. The truly good ending would be an unemployment rate at below six percent and declining, and an economy growing by five percent annually. That simply won’t happen with the current federal government policies in place. Good paying jobs are there for the asking in the energy industry if the federal government will allow it not only to create jobs but to lower our energy prices and reduce our dependence on foreign energy sources. Community banks that make most of the small business loans are being battered by the consequences of the Dodd-Frank bill. Businesses sensitive to energy costs—most are—fear the worst regarding the Obama administration’s proposed regulations for green house gas emissions, ozone restrictions, boiler regulations and much more. No business—large or small—has a clue as to what its health care costs will be three years from now. The 90 percent-plus of businesses that operate without unions are concerned that they may be forced by the federal government to surrender to one—and the list goes on and on.
Uncertainty is killing jobs and investments in this great nation. Unfortunately, the only certainty is that the uncertainty will continue at least until January of 2013. Or as Jackson Browne said in his song:
Looking out at the road rushing under my wheels
I don’t know how to tell you all just how crazy this life feels
I look around for the friends that I used to turn to to pull me through
Looking into their eyes I see them running too.