President Obama : Clear Questions, Hard Answers

The last election brought some interesting changes to the USA. You might say it brought "The Change" that some of us were looking for. The question now is "What does change look like?" and what shape will it take going forward.

President-Elect Obama's inherited problems are mounting by the day. Today brings us a bailout which is approaching nearly 5 trillion dollars, due to a bait and switch that was approved by both elected parties.The auto industry is on the edge of collapse, along with American Express. This all comes before the holiday season, and the dismal retail reports that we about to see (of course, this is all great news from Wal-Mart's perspective).

These are challenges that hope alone will not solve. We are looking at the imminent meltdown of the global financial system. The fate of the world is based upon the United State's ability to repay debt. If the US defaults on any of the treasury bills that it is currently holding, then we will see world economies fall apart in a matter of hours.

This instant, China is holding between $600 billion and 1.3 trillion in government backed treasury bonds, depending on which reports you want to believe. Japan holds right around $700 Bln. in bonds. Our credit rating as a nation is about to lose its "AAA" best-of-the-best rating.

What does this all mean? President Obama will be at the helm of a rapidly deteriorating economy, pushing policies that limit free trade, virtually eliminating any way to make up the debt through reduction of import tariffs, etc.

He's going to lose his sweetheart status with the rest of the world pretty quickly.In fact, he is already putting the pieces in place that will make him even morehated than George W. Bush. How? Well, Obama is heavily indebted to the Labor vote,based on his strong campaign for American-based manufacturing. This includes keepingin place generous pensions, wages, and health care plans for the automotive and mining industries. He can't retract his promises now without a severe backlash occuring.

On an international front, he has hired Rahm Emmanuel as his chief of staff. While mostknow him domestically as a Democratic operative with really sharp elbows, the internationalcommunity knows him another way: A staunch Zionist. With the nation of Israel increasinglybecoming a thorn in Europe, Russia, and Africa's side, the thought of a former IDF member counseling President Obama is sure to cause some severe uneasiness concerning US foreign policy, especially within the coalition of Arab nations. Let's not forget the current situations in Iraq, Afghanistan, and any other challenges that might possibly arise.

From an environmental standpoint, his challenges are even more steep. How will President Obama balance an aggressive climate change policy when faced with the increased costs ofimplementing such regulations? The bureaucracy required to govern such a vast effort would be incredible. Let's not forget, that while cleaner, the new policies will cost more. So- called "cap and trade" schemes will charge businesses for outputs above what the government deems appropriate. While this will be an additional revenue scheme, chances are that money will be used to repay debt, rather than finance cleaner technologies. Will he be forced to delay or abandon such a program entirely when confronted with a full-blown recession?

One problem President Obama will face is the tack to take with the financial markets. Stricter regulation is a given, but what about the increases on Capital Gains that he promised? He walks a tightrope there, as most people will take their profits(if there are any) before an Obama administration can raise the rate from 15 up to 30 percent. If he doesn't enact them, then by virtue of the fact that he did not raise rates, it will be seen as a continuation of the policies of George Bush.

Along the same lines, what will Barack and Co. do regarding regular income taxes? The ceiling fell from $250,000 to an official $200,000, with Joe Biden at one point speaking of a $150,000 ceiling for those who cannot expect tax increases. The exact number has yet to be named. Some are saying that that level will fall to $100,000 or possibly further. Given that John McCain and Barack Obama both proposed adding an additional trillion in spending above our current levels, it is almost a foregone conclusion that tax cuts are not in the cards. In fact, a vast rate increase would be needed to offset our current liabilities, not mention policies that have not seen the light of day yet.

I wish President Obama success with these challenges, as they are surely myriad.His destiny and mine are seamlessly interwoven.As Americans, our national fortunes will rise or fall based on his handling. The questions remain but hopefully the answers will be clear, and correct when President Obama is called to answer them.

Resource Box
Kurt Hartman is Head of Employee Training at Mobile Fleet Service, Inc. They sell tires to the mining, construction, and heavy equipment industries. You can find news, commentary, and tire videos on their website:

Comments (0)

New comments are currently disabled.

Email to Friend

Fill in the form below to send this article to a friend:

Email to Friend
* Your Name:
* Your Email:
* Friend's Name:
* Friend's Email:
* Security Image:
Security Image Generate new
Copy the numbers and letters from the security image
* Message: