By Louis Avallone
Investment. Obama used this word 13 times in his State of the Union address last month, when proposing new programs in information technology, clean energy, and science research. In January 2009, in his first address to a joint session of Congress, he used the word “invest” many times also, to urge significant expansion of programs in areas like “energy, health care, and education that will grow our economy…”, he said. And he even used the word “investment” 15 times during the February 2009 signing ceremony of his nearly $1 billion stimulus package.
Of course, the dictionary defines “investment” as, “the outlay of money usually for income or profit.” But for at least the past 20 years, “investment” is what Democrats say when they want to spend more of your money. In fact, Bill Clinton used the word nearly 24 times during his 1993 State of the Union address (coincidentally, just before the Republican Party gained a majority of seats in the House for the first time since 1954).
So, when Obama uses the word “investment,” translate that to “government spending.” And when he says “reinvestment,” translate that to “government redistribution.” Whatever the word selection, and however polished the delivery, or clever the refrain, it remains inescapable that you simply cannot make chicken soup out of chicken poop.
For substantially all of the “investment” our government has made, allegedly on our behalf, and with our monies, chicken poop is about all there is to show for it. For example, Congress passed a nearly $1 billion “stimulus” spending bill in February 2009 and the economy has still shed more than two million jobs since. Unemployment has risen to 9.8%, and that doesn’t even include those discouraged workers who have given up looking entirely.
Our government has invested billions of federal dollars in education, for over 40 years, and test scores have barely budged. Taxpayer funds were invested in mortgage backed securities through Fannie Mac and Freddie Mac, resulting in the collapse of the housing market in 2006, and that “investment” has continued to pay “dividends” to the tax pay payers, in the form of one million foreclosures in just 2010, when sales of new homes hit a 47-year low.
Now, Obama wants government to step up its subsidy “investment” of alternative energy, even though we have been doing so since the 1970s. Want to know what the return will be, on our government’s investment in a “green” economy? Call up Spain, which has greenest economy in all of Europe. They call it an “investment” there too. They also have 20% unemployment and their government’s own report found that Spain’s “green economy” program cost their country at least 2.2 jobs for every job “created” by the state. Makes no sense.
The truth is that government “investment” is most always about expanding the size of government, and its influence, instead of the expenditure of money for income or profit. In fact, municipalities all over the U.S. are on the verge of bankruptcy. Half of the states’ pension funds are expected to run out of money by 2025.
California’s pension shortfall, for example, is greater than the gross domestic product of Saudi Arabia, oil production and all.
Yet these state and local governments continue to borrow money to fund their inefficient (and non-existent return on investment) operations – $2.4 trillion borrowed as of mid-2010, up 35% from five years ago.
It is estimated that state and local government debt is nearly 10 times the national debt. Yet Obama tells our nation that prosperity can be attained by more government spending, even as the national debt grows to 70% of our gross domestic product (from 40% in 2008).
Large, federal spending projects, such as manufacturing solar shingles and building high-speed rail lines, merely create temporary, unsustainable jobs only, because the object of such spending projects is of dubious consumer value to begin with. The private sector can create permanent jobs by allowing the market to determine the investments in new businesses and technologies.
Government investments are not, in fact, investments. From the debt levels of our federal, state, and local governments, to rising unemployment, despite billions of dollars of stimulus, it is all incontrovertible evidence that government spending is rarely so prudent as to result in an income, or profit, of any kind. In the words of Ronald Reagan, it is as simple as recognizing, from history, that “outside of its legitimate function, government does nothing as well or as economically as the private sector.” That’s simply the truth, and for all of you unconvinced, taxing and spending liberals, the “truth” is a secure investment, with limited potential to lose “principal,” or loss of purchasing power due to inflation, and there are no surrender charges or maturity dates. Maybe that’s an “investment” this administration ought to look into.