Dean Baker on the SOTU

[ProSense]

Dean Baker

It's great that President Obama took the high ground and refused to cave to the pressure from the Wall Street crew to go after Social Security and Medicare. There has been a massive effort in recent months to take advantage of the large budget deficit - itself the result of a collapse caused by Wall Street greed - to go after Social Security and Medicare and other social programs.

The facts are very clear. Social Security is fully funded for decades into the future according to the Social Security trustees, the Congressional Budget Office and all impartial budget experts. Medicare and Medicaid are projected to see sharp increases in costs but this is the result of our broken health care system. If we paid the same amount per person for health care as any of the countries with longer life expectancies, we would be looking at huge budget surpluses rather than enormous deficits.

This is why honest people focus on the need to fix our health care system and to bring our costs in line with the rest of the world.

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President Obama resisted this pressure and reaffirmed his commitment to protecting Social Security both for current and future retirees. This was very courageous - he would have received much support from business and from the elite media if he had come out for gutting these programs - but he instead stood by these essential programs. This gets the second half of his term off to a solid start.

[paulk]

1. Dean Baker on the SOTU

“President Obama laid out an ambitious investment agenda, although it is not clear whether Congress will be prepared to fund it. He noted the extent to which the United States is falling behind other countries in areas like clean energy and high-speed rail and also in educational attainment. It is difficult to envision major progress in these areas without very substantial spending. While there are always opportunities to eliminate waste and improve funding priorities, it is not plausible that major new initiatives can be financed through these routes.

“The discussion of trade was also somewhat disconcerting. As a result of a seriously over-valued dollar, the United States has run a bloated trade deficit since the late 90s. President Obama promised more trade agreements like the ones that provided the framework for this deficit. The trade deficit is the largest imbalance in the economy today. As a matter of logic, if the country has a large trade deficit then it must have either a large budget deficit or low private savings, or some combination of these two. It does not seem that President Obama is prepared to address the fundamental issue of the over-valuation of the dollar.

“The most disappointing aspect of the speech is that it largely skipped over the current economic crisis. This may reflect a view that there is little that Congress will agree to do to at this point. But it still is unconscionable to accept the idea that 25 million workers will go unemployed or under-employed, with millions more losing their home, because of the economic mismanagement by the country’s leaders.

“The first stimulus was signed into law by President Bush at a time when the unemployment rate was just 4.8 percent. It is difficult to believe that a Democratic president will sit back and do nothing when the unemployment rate is 9.4 percent. The unemployed should have been featured prominently in the State of the Union address. They are suffering enormously for the greed and incompetence of others.”

[ProSense]

2. ""President Obama laid out an ambitious investment agenda, although it is not clear whether

...Congress will be prepared to fund it."

At least he didn't refer to it as an "ambitious (right-wing) investment agenda."

Thanks. Here's the link.

[Blue-Jay]

3. I'll reserve judgement until I hear from Joe Don Baker.