President Shows He’s a True Believer
By Greg Holloway, Austin Tea Party Patriots

President Obama, as evidenced by his State of the Union address tonight, remains undeterred in his belief that the federal government, more so than individuals or the free market, remains the central force behind economic growth and the prosperity of the country.

Prior to looking forward, he again harkened back to the Bush years and the staggering deficits that resulted from the former President’s policies without acknowledging that he, as a member of the Senate, voted for many of the most damaging of those policies. He attributed the past administration’s failures largely to tax cuts while ignoring that federal tax revenue actually grew significantly during the Bush years, only to be swamped by huge spending increases not only on the war but on new governmental initiatives and continued entitlement programs.

President Obama decried the TARP bailouts and then announced a new round of $30 billion in TARP funds for community banks. We must wonder whether he has noticed that the TARP-relieved major banks have not been active in lending despite their government funding. And then we remember that the federal government has imposed new regulations and compensation directives toward those banks and can only hope that the process will not be repeated on the community scale.

Gratefully, the President clearly acknowledged that the creation of jobs would be his number one priority in 2010. He advocated tax cuts to, and elimination of capital gains taxes for, small businesses. He proposed tax breaks for companies who do not outsource. The problem with targeted tax cuts, however, has always been that it fosters an inappropriate allocation of market resources to the target of the cuts. So, unfortunately, we can count on growth in small businesses (as yet undefined) at the expense of some larger enterprises that might be more efficient.

As expected, he spoke of plans to freeze discretionary government spending – beginning in 2011. (His suggestion of a one year time lag resulted in gales of laughter from the Republicans.) He noted that, even considering the bloated size of the current federal budget, several areas would be exempt: defense, social security, Medicare and Medicaid. Has anyone noticed that the exempted categories constitute the lions’ share of the national budget?

The President offered a few glimmers of hope. He asked for more disclosure in the financial services industry to explain some of the incredibly complicated instruments (remember securitization?) that Wall Street likes to buy and sell. He suggested that nuclear power plants and offshore drilling (although still limited) be part of American innovation in the energy sector. He talked about biofuels and clean coal. On the defense side, he called for more support for the troops when they come back from war.

And then the buzz kill began. He insisted that the country still needed the manacles of the Cap and Trade Bill. He harped on national education standards. He supported the national takeover of the student loan system and offered accelerated debt forgiveness for those in public service, however that may be defined.

Of course, he could not help but try to dredge up his government healthcare bill once more. He offered it somewhat sheepishly and then asked for suggestions for a better alternative. (For one such alternative, read “Consider A Healthy Alternative” as published on September 8, 2009 by the Austin American-Statesman.)

He asked for another jobs bill, which one must assume was his long-awaited Stimulus II. He called for earmark reform even though, as we all recall, Stimulus I was essentially a greatest hits compilation of earmark expenditures.

He sent a chill up our collective spine when he talking about fixing our “broken immigration system.”

A good counterpoint to the President’s government-centric views were those of Virginia Governor Bob McDonnell, who sounded positively tea party-esque with quotes like “The federal government is trying to do too much, “ “We must restore the proper limited role of government at every level” and “The government closest to the people governs best.”

Or, if you are President Obama, more government is good government.