Tuesday, August 26, 2008

Election Year Math

The Wall Street Journal Tuesday ran an interesting chart of the economic conditions in the United States to be inherited by a Democrat President.

Tacit was the implication that Sen. Barack Obama will be the next U.S. President. The Journal may be proven correct in that notion, but it’s certainly not balanced reporting to assume such before the votes are counted.

The chart also implies that each of the past three Democratic Presidents to take over the White House all inherited a similar set of economic and domestic issues. The Journal cites three prime concerns for each in-coming administration; Lyndon Johnson had to deal with an un-popular foreign war, domestic race relations, and health care, for example. Interestingly, the next President will be facing the tri-conundrum of an unpopular foreign war and health care, plus a level of economic lethargy.

Tacitly implied, then, is the fact that neither Republican or Democrat has been able to solve the health care puzzle, get a grip on the principles that make for a sound economy, nor solve the festering problems of the rest of the world. I don’t think the next guy will, either, regardless of who wins the election.

The biggest problem is a Government that refuses to use simple math to balance the debits and credits in the national budget (and include all expenses, like the Iraq War, in the balance sheet), and continues to outspend more than it takes in. That seems to be a common character flaw in both parties. But it all gets back to simple math.
The Federal Deficit as a percentage of Gross Domestic Product when Lyndon Johnson came to office in 1963 was .9%, and inflation-adjusted growth was running north of 5%.

Today’s economic barometer shows the deficit running just under 3% from nearly 5% (if you believe the government’s numbers), and growth limping along at 1.5%: Hardly the environment in which tax increases being promised by the Obamalites would make financial sense.

Perhaps our elected officials should all be required to take Accounting 101 before returning to Washington, or at least be able to balance a checkbook before taking office.

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