Let's Make a Deal

Second quarter GDP numbers were released Friday. Most observers focused on the sobering adjustment to GDP growth, which was "revised lower to 1.6% for April through June from the initial estimate of 2.4% made a month earlier."

MaxedOutMama, however, identifies the problem-behind-the-problem. Pointing to Table 10 of the full release, she notes that while personal income rose (slowly) between 2007 ($11.9 trillion) and mid-2010 ($12.5 trillion), the share of income derived from government transfers over the same period jumped from $1.7 trillion to $2.3 trillion. In other words, right now, public assistance is what's keeping our economy moving. As M_O_M says, "This explains EVERYTHING about our current fiscal crisis." And, as I have argued, about our future if we don't change course. Such "social engineering" doesn't work, Wolf Howling concludes. Even Arnold Schwarzenegger is worried.

It doesn't have to stay this way, says Victor Davis Hanson:

In the age of Obama, the notion of not being exceptional or preeminent comes as a relief to millions on the left who pretty much are in sync with the protocols of the United Nations. On the right, there is a sense that Obama is the ultimate expression of downfall; given the wild spending, the iconic efforts abroad at apology, and the rampant entitlements we simply aren’t what we once were. In between, most aren’t quite sure--but sure are worried that we may never climb out of our self-created indebtedness crater, and that the culture’s education, the nation’s borders, and the civilization’s values are eroding. . .

On the plus side, as I mentioned last time, our economy is almost three times larger than China’s. American agriculture is the most productive in the world. There is simply nothing like the farmland in the Great Plains, or the 400 miles of irrigated expanse between Bakersfield and Red Bluff. For all the damage done by the federal government, we remain the most orderly free society on the planet, where merit still to a large degree determines success--not class, race, or tribal affiliation. While our universities in the humanities are increasingly corrupt, their science, engineering, and computer science departments, as well as professional schools in business and medicine, are the best in the world. It is not that Cal Tech, MIT, Harvard or Yale or Stanford are better than counterparts in Germany or Russia or China, but that an entire array such as UCLA, USC, Texas, Ohio State, Duke, and dozens of others is as well.

We have huge reserves of both coal and natural gas, and can quite easily quadruple our nuclear power generation. The U.S. military is not just the most technologically advanced and supplied, but the most experienced in all phases of modern challenges, from air campaigns to counter-insurgency.

I have lost confidence in American arts, in the sense of fiction and poetry, which are now in large part warped by the cult of race/class/gender orthodoxy that brings intertribal awards and recognition, but American scholarship in science, medicine, and the professions remains preeminent. . .

If we are headed back to the Clinton income tax rates, why will we not then head back to the two years of Clinton surpluses? All that would require is a similar across-the-board freeze on government spending, as we saw in the early 1990s, that in the ensuing two decades has grown exponentially. It is not just that a great deal of the money is often wasted, but is counterproductive in creating a culture of dependence on the lower end, and crony capitalism on the upper. The entire farm bill should be scrapped; Social Security must be radically refashioned; and everything from corporate bailouts to unemployment payouts and food stamps must be drastically reformulated. The solutions do not require a great deal of material sacrifice. No, the problem hinges on how much abuse one can endure to see through the needed reform.

As Instapundit says, "Obamanomics has been a failure, as it was clearly destined to be from the beginning." Partly from ignoring the first rule of holes--"when you're in one, stop digging." Will November 2nd settle whether America chooses door number 1 or door number two?