Obama's Big Spending Vision Gives Romney an Edge

Obama's Big Spending Vision Gives Romney an Edge

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With the Republican nomination almost in the bag, Barack Obama and his likely opponent, Mitt Romney gave competing visions of America in two dramatic speeches this week.  Both argued for change, but only one offered any kind of course correction at all.

Let’s start with President Obama, who spoke on Tuesday at a luncheon hosted by the Associated Press and attended by journalists.  Obama clearly wanted to steal a little of Romney’s thunder from an anticipated – and realized – three-contest sweep on April 3rd.  In contrast to his 2008 campaign theme of Hope and Change, Obama's AP speech offered a defense of the status quo, as well as smirking attacks on his presumed foe in the upcoming presidential election.  If anyone expected Obama to offer new directions for the US after a three-year period of economic stagnation and a seven-month strategy of class warfare, they would have come away profoundly disappointed.

One might have thought that the man who finally acknowledged over a year and a half ago the fantasy of his promised “shovel-ready jobs” would have a different economic plan for his second term.  Instead, Obama offered more of the same, insisting that the government needed to seize more funds through tax increases for further “investments” in infrastructure and other Obama priorities.  In fact, the word “investment” appears a dozen times in his remarks, and in some curious contexts. 

First, Obama insisted that Abraham Lincoln “invested” in the Transcontinental Railroad, a favorite chestnut of his speeches which he uses to paint Republicans as historically extreme.  However, the government mostly stayed out of the way of its construction, and the limited government funding that did get applied came from the sale of bonds on a voluntary basis, not from taxes seized in Buffett Rules or any other redistributive methods.  The bonds and the interest got paid by the railroads in the end, not the government.

In another example, Obama proclaimed Richard Nixon’s establishment of the EPA as another “investment.” As anyone who has had to deal with the EPA well knows, that agency does not promote investment, but usually acts to frustrate it.  Just ask the Sacketts, who invested in land in Idaho to build a home for themselves, only to get blocked by the EPA which declared it retroactively to be “wetlands,” and refused to allow the Sacketts access to judicial review of their order.  The Supreme Court unanimously slapped down the EPA for its tyrannical approach to the Sacketts, but the agency still interferes with private property rights, especially when it comes to the infrastructure of energy production.

Finally, in a moment of sheer irony, Obama offered the example of the Eisenhower Interstate System as an “investment” that proved its worth.  President Eisenhower built the system for strategic military purposes first, and for commercial development of the U.S. second.  Following his experiences in Europe after D-Day, the former Supreme Head of Allied Expeditionary Forces understood the necessity of being able to rapidly move heavy arms to a nation’s borders.  More ironically, the Eisenhower System cost in 2006 dollars roughly half of the eventual cost of the Obama stimulus package, $425 billion to $840 billion, and delivered an entire national highway system capable of defending the nation’s borders.  Obama’s stimulus package delivered phantom “shovel ready jobs” and a huge addition to the debt while failing to dent the trajectory of unemployment.

Obama didn’t have any kind words for Romney's expressed support for the Paul Ryan budget plan, which recently passed in the House. In contrast, Obama’s budget failed to get one Democratic vote – for the second year in a row.  He poked fun at Romney’s use of the word “marvelous” in connection with budgets, without acknowledging that the only word to use for budgets in the Senate – as controlled by Obama’s party – would be “non-existent.” 

Obama also asserted that Ronald Reagan chose to make investments, proposed tax increases, and spending cuts to balance the budget, but that Reagan “could not get through a Republican primary today.  That’s rather rich coming from a President who has presided over trillion-dollar deficits in all three years of his presidency – the first coming from the FY2009 budget that Capitol Hill Democrats (including then-Senator Obama) kept from George W. Bush in 2008 and which Obama signed in March 2009 after a series of continuing resolutions.

Romney, of course, balanced four budgets as governor of Massachusetts, even with a heavily Democratic legislature.  His speech on Tuesday night went more to the heart of the question voters will face in November.  While Obama offered a “stay the course” approach earlier in the day, Romney responded by reminding voters exactly what that course has produced:

“Millions have lost their homes. A record number of Americans are now living in poverty. And the most vulnerable are the ones that have been hurt the most. Thirty percent of single moms are now living in poverty.  New business startups -- and that's normally where we get job growth after a recession -- new business startups are down to the lowest level in 30 years. And of course, you know our national debt is at a record high. And when you drive home tonight and you stop by the gas station, just take a look at the prices. And then ask yourself, four more years of that?”

Romney drew a bright line between himself and Obama on visions for America.  Obama, he said, sees America as a “government-centered society [where] the government has to do more because the economy is doomed to do less.”  Instead, Romney sees America as a nation where property rights allow people to make good economic choices that benefit everyone.  Instead of tax increases imposed for “social justice,” Romney wants tax reform to accelerate investment and return to post-World War II patterns of recovery and economic growth that Obama’s central planning and increased regulation has disrupted.  The alternative, Romney warned, was a path that other Western nations have already trodden to “chronic high unemployment, crushing debt and stagnant wages” – a pattern we have already seen as the hallmark of the Obama economy.

The two likely presidential candidates have made their visions clear.  One wants a commitment to the stagnant status quo and a continuation of the fruitless economic policies that are aimed at resentment rather than growth.  The other offers a return to sensible American values and economic policy.  In the fall, that choice will be very clear indeed, and it will make the election a referendum on stagnation.  By November, America will be ready for change … back.