On Obama's speech

Lately I feel like I've been playing "forever catch-up" on this blog. Really, is there any point commenting on Obama's acceptance speech? Well, I'll give it a shot and keep it brief, or not.

The mawkish gushing of Andrew Sullivan aside, it was essentially his stump speech with some new specifics thrown in. But those specifics were all the nifty things the government is going to do for you. (Government! Is there anything it can't do?) How will Obama pay for universal healthcare, Social Security, paid sick days, whiter teeth, better teachers, and new roads?

"Now, many of these plans will cost money, which is why I've laid out how I'll pay for every dime - by closing corporate loopholes and tax havens that don't help America grow. But I will also go through the federal budget, line by line, eliminating programs that no longer work and making the ones we do need work better and cost less - because we cannot meet twenty-first century challenges with a twentieth century bureaucracy."

Puh-leeze. The unfunded liabilities of entitlement spending alone is measured in the tens of trillions of dollars. The chimerical savings from closing loopholes or paring the federal budget (a political minefield) would be puny. The Moderate Voice touched on this issue:

Obama talked about tax cuts for 95 percent of Americans and then talked about a bevy of programs. He said that he would get money from closing tax loopholes and making government more efficient. Okay, but you are also going to have to raise taxes on those other five percent quite dramatically if you are going to provide all these government programs.

And soak the rich, Obama will. But Robert Samuelson points out that even that won't satiate the government's appetite for spending:

OK, let's whack the rich. Obama would restore the 36 percent and 39.6 percent income-tax rates for couples with taxable incomes above $200,300 and $357,700. He's suggested higher capital-gains taxes and Social Security taxes for those with incomes exceeding $250,000. Together, these changes might generate about $80 billion of revenue in 2010, says the Tax Policy Center. By contrast, the 2008 budget deficit is reckoned at $389 billion. Even adding a $125 billion saving on the Iraq War-highly optimistic-wouldn't erase the deficit.

David Brooks made a similar observation several months ago:

Both [Obama and Clinton] promised to not raise taxes on those making less than $200,000 or $250,000 a year. They both just emasculated their domestic programs.
Returning the rich to their Clinton-era tax rates will yield, at best, $40 billion a year in revenue. It’s impossible to fund a health care plan, let alone anything else, with that kind of money. The consequences are clear: if elected they will have to break their pledge, and thus destroy their credibility, or run a minimalist administration.

So, really, what's the point of delineating all the new or enhanced government programs in an Obama administration if he can't pay for them? I'm not excusing the profligate spending of the Bush administration. The United States is fast approaching a tipping point where fiscal policy is going to be dictated (pun intended) by Chinese lenders and/or the bank presidents who fund our expanding deficit. We can't afford all this new spending because we've already spent our old money away.

Obama is promising things he can't deliver, because the federal government can't pay and can't borrow much more. Strip that away from his "substantial" speech and, just like the man, there's no there there.

Extra - AJ Strata and Maguire have similar criticisms of Obama's speech.

More - Brothers Judd: "No matter Mr. Obama's reputation for naivete, let's give him the benefit of the doubt and assume that this absurd claim is a function of cynicism rather than a genuine belief that there are hundreds of billions of dollars a year just waiting to fall into his lap by closing a few loopholes."