Streetwise Professor

Yesterday, Obama formally requested that Congress raise the debt ceiling by $1.2 trillion. This came only days after Federal debt surpassed 100 percent of GDP–and that doesn’t take into account the vast sums in future government spending commitments, on entitlements particularly.  With deficits running about 10 percent of GDP, debt will increase to about 110 percent of GDP in a year, 120 percent of GDP the year after that . . . I’ll leave the rest as an exercise for the class.  In the meantime, growth remains sluggish, thereby making it progressively more difficult to pay for that mounting debt.

Meaning that the country’s fiscal situation is fraught, and only likely to become more so, due primarily to the growth in entitlement spending.

So what is Obama’s response?  Supporting passage of a serious budget?  Advancing a credible and enforceable plan for containing entitlement spending growth?

Surely you jest.  The actual response is to reorganize the deck chairs on this fiscal Titanic:

President Obama announced Friday that he is elevating the head of the Small Business Administration to a Cabinet-level position, as he urged Congress to also grant him permission to consolidate that and other federal agencies in an attempt to make government more efficient.The decision to bring SBA Administrator Karen Mills into the president’s Cabinet does not need congressional approval. However, Obama’s much broader proposal to merge overlapping agencies does — the president appealed to Congress Friday to help make that happen.

“This is the same sort of authority that every business owner has to make sure that his or her company keeps pace with the times,” Obama said. “Let me be clear, I will only use this authority for reforms that result in more efficiency, better service and leaner government.”

Under the proposal, six major trade and commerce agencies with overlapping programs would be merged. The Commerce Department would be among those that would cease to exist.

Overlooking Obama’s typical defiance of Constitutional niceties (he said he’d do this with or without Congress), maybe this makes sense, when evaluated on its own merits.  But any efficiency improvements that result are rounding errors on rounding errors. To say this is an irrelevance and a distraction is the understatement of the century.

The disconnect between this proposal (and the lack of serious proposals on the real problems) and fiscal realities is stunning.  Hell, this doesn’t even rise to the level of reorganizing the deck chairs: it’s more like flicking a speck of dust off of one of them.  It is, in a word, madness, given the times and the circumstances.

This is boob bait intended to fool enough of the people at one particular time (November, 2012, to be exact) that Obama is the voice of fiscal sanity.  That he is a responsible steward of the nation’s finances.

The crucial issue is whether enough people are, in fact, boobs.  There is reason for fear.  The media will certainly never point out the utter absurdity of such nanomanagement at a time we face looming fiscal problems–and when Europe is giving us a Ghost of Christmas Future demonstration of how scary those can become, and quite quickly.  Indeed, the media are like the sycophants in the Emperor’s New Clothes, treating this decidedly unserious nanosurgery as a serious response to a potentially fatal affliction.

An enabling press is to be expected.   In a healthy political system, one would rely on the opposition to point out the insanity of making a big deal out of ensuring that several departments have one phone number and one web site when the time to avert fiscal disaster is dwindling rapidly.  But the Republicans seem hell-bent on cementing their reputation as The Stupid Party, engaging in a very 80s debate over the economics and ethics of leveraged buyouts (LBOs), with self-styled conservatives making arguments and using rhetoric  that are indistinguishable from the editorial position of The Nation.  That’s when they aren’t (as R tirelessly points out) indulging a codger who favors a smaller government, but has no remotely realistic way to achieve his goals, and who routinely spews anti-American venom that would also fit quite well in The Nation–all in fear of upsetting his touchy–and often ‘tetched–supporters.  The Republican campaign is just one, long, nightmarish friendly-fire episode, allowing the real opponent to pose unscathed, and the real vital issues–the ones that galvanized the Tea Parties, no less–are all but ignored.

This is both politically stupid and grotesquely irresponsible.

And this is the way that nations careen into catastrophe.