Obama's Dismal Second Term
Americans are still struggling at Obama's halfway point.
Nothing in the cosmic laws of the universe makes the halfway mark sacred. Nevertheless, we often treat that dividing line as more important than others: Victory in a democracy usually requires crossing the 50-percent threshold. All other things being equal, a 50-50 split is considered fair. The question dividing optimists and pessimists asks whether the glass is half-full or half-empty. We encourage others by saying, "You're halfway there already." Et cetera.
So with the Obama administration now at its halfway point, perhaps it is worth noting the many ways the United States is approaching, or already has crossed, the halfway mark in fiscal and economic matters.
For the first time, a majority of Americans now say the federal government is a threat to their rights and freedom. That's according to a Pew survey released Friday.
Some of the other metrics you probably already know: E.g., nearly half of Americans pay no federal income income taxes. There are reasons for this, but those reasons do not change the fact. Nor do they change the fact that that the share of Americans paying no federal income tax has been growing. According to the Tax Foundation: "In 1990, only about 21 percent of [federal] returns had no tax liability."
On the other hand, roughly 165 million Americans—more than half—depend on the government for income or support. The figure includes welfare and Medicare recipients, members of the armed forces, judges, and so on.
That figure helps explain why another halfway mark is disappearing in the rearview mirror. "In 1960, according to the Office of Management and budget, social-welfare spending accounted for less than a third of the federal budget," writes Nicholas Eberstadt in The Wall Street Journal. Today it accounts for nearly two-thirds of the (now vastly larger) budget.
In a recent piece for National Review, William Voegeli—author of the excellent Never Enough: America's Limitless Welfare State—draws attention to another unsettling trend. In 2010, he notes, "all government spending in Sweden equaled 53 percent of GDP. The same figure was 55 percent in Finland, 56 percent in France, and 58 percent in Denmark." In the U.S., government now consumes 42 percent of GDP—up from 34 percent just 12 years ago.
Despite President Obama's rhetoric—in his inaugural speech two weeks ago he said, presumably with a straight face, that "we must make the hard choices to reduce the cost of health care and the size of the deficit"—U.S. debt has grown like fungus in a high-school locker room. In 2008, the national debt as a percentage of GDP stood at 40.5 percent. Within three years, it had grown to almost 68 percent. (Those figures include only debt held by the public; add intragovernmental debt, such as the I.O.U.s for the money Congress borrowed from the Social Security trust fund, and total government debt exceeds 100 percent of GDP.)
This trend is not irreversible. But it is growing harder to reverse because of another trend, noted in a paper by Daniel L. Thornton in the November/December 2012 Review of the Federal Reserve Bank of St. Louis.
From 1979 to 2011, Thornton writes, discretionary spending—outlays for things such as defense and education—fell from just under half of all federal appropriations to 37 percent. Mandatory spending—driven chiefly by Medicare and Medicaid—has crossed the halfway mark going the other way, by growing from 44 percent of the budget to 56 percent.
Mandatory spending is not truly mandatory, since Congress can change the rules at any time. But unless Congress intervenes in such a manner, mandatory spending largely flies on autopilot. And Congress is not free to change the rules without the president's assent.
In his inaugural address, President Obama immediately followed his comment about "hard choices" with a "but"—as in: "But we reject the belief that America must choose between caring for the generation that built this country and investing in the generation that will build its future. . . . The commitments we make to each other through Medicare and Medicaid and Social Security, these things do not sap our initiative, they strengthen us."
This sets up a false choice, but never mind: The president has made it clear any effort to reduce mandatory spending will face a steep uphill fight.
In light of those facts, all of the above lead to an overwhelming question: At the halfway mark of the Obama presidency, is America's glass half-full – or half-empty?
This article originally appeared in the Richmond Times-Dispatch.
