Obama’s sputnik moment

According to President Obama (State Of The Union Address) this is the current US generation’s “sputnik moment”. The sputnik moment (1957was the year the first sputnik was put in orbit) precipitated US investment in space to counter the Soviet Union. Technological innovations followed. What then are to be the fruits of the new sputnik moment? No prizes for guessing that it is clean energy and lots of clean energy jobs.

At a time when the US federal debt is $14 trillion and the fiscal 2010 budget deficit (to end September) was $1.3 trillion (almost 9 percent of GDP) and projected to be higher in 2011, Obama has promised to send a budget to Congress with spending on “biomedical research, information technology, and especially clean energy technology”. Apart from “protecting the planet” this will apparently “create countless new jobs for our people”. He lauded the efforts of a small roofing company in Michigan that was helped by a government loan to manufacture solar shingles, as evidence of “the promise of renewable energy”. No I am not kidding.

He issued a challenge to America’s scientists and engineers to “assemble teams of the best minds in their fields and focus on the hardest problems in clean energy”. He promised to “fund the Apollo projects of our time”. To help, he wants to reduce tax concessions for those dreadful oil companies.

“Some folks”, he said, “want wind and solar. Others want nuclear, clean coal and natural gas…we need them all.” His goal, which he challenged others to embrace, was that by 2035 “80 percent of America’s energy will come from clean energy sources”.

It by no means stops with clean energy. He has many goals. Within 25 years he has a goal “to give 80 per cent of Americans access to high speed rail.” I suspect he has been talking to our Bob. “Within 5 years we’ll make it possible for businesses to deploy the next generation of high speed wireless coverage to 98 percent of Americans.” Has he been talking with our Stephen? He has set a goal of “doubling exports by 2014”. Didn’t the Soviets announce these kinds of economic plans when they were launching sputniks?

Of course all of this is complete pie in the sky. Utopian dreams befitting the socialist mindset and all inspired and triggered by beneficent government. No real clues as to how to bring any of it about without further crippling an economy with close to 10 percent unemployment.

What needs doing is to drastically reduce spending and cut taxes and regulations; and let business do the rest. Unfortunately, this might mean efficient ‘dirty’ energy, no loss-making high speed rail, and lesser subsidised internet speeds than ma, pa and the kids would like. It would certainly mean cutting into entitlements, including Social Security (universal pensions) and Medicare (universal health benefits for those over 65) and Medicaid (means-tested health benefits), and abandoning Obamacare. What he has promised is to cut $400 billion out of discretionary government spending over the next ten years. That is an average of $40 billion a year, just 3 per cent of the 2010 deficit. It would be called denial if proffered by an impecunious debtor to his bank manager.

But hold on, Obama does recognise the need to cut more, to have a “government that lives within its means” provided “what we’re cutting is really excess weight”.

We have a situation in the United States which is common throughout Europe, and would exist in Australia if it were not for the bounty of resources against a small population base. People think they are entitled to benefits that cannot be paid for. The difficulty in combating this is that one side of politics (the left) leaves the other to do any heavy and unpopular lifting. So Obama wants to “strengthen Social Security spending for future generations” (not anything as specific and crude as cutting spending), “without putting at risk current retirees, the most vulnerable, or people with disabilities; without slashing benefits for future generations; and without subjecting Americans’ guaranteed retirement income to the whims of the stock market”. It is a complete and cynical abdication of responsibility.

He is “eager” to work to improve Obamacare legislation but not to “go back to the days when insurance companies could deny someone coverage because of a pre-existing condition”. Apparently this drew applause – presumably from the simple-minded who don’t understand the concept of insurance. “As we speak this law is a making prescription drugs cheaper for seniors and giving uninsured students [up to 26 years of age] a chance to stay on their parents’ coverage.” This also drew applause. Why not? These are benefits. Everyone likes benefits. Surely only the cruel (read Republicans and Tea Party zealots) would ever contemplate taking them away.

Conservative parties, in the US and elsewhere, have a problem. Either they join left-leaning parties and abdicate all responsibility for controlling the size of government, or they risk making themselves electorally unpopular by advocating deep and painful spending cuts. The glimmer of hope is that enough taxpayers (assuming they remain in the majority as those on the public teat grow in number) can be convinced that you must earn a dollar to spend a dollar. It is a simple enough proposition. My parents and their neighbours understood it. It will mean turning back years of delusion. Misery is the penalty, as Mr Micawber said, if it proves impossible to do; as it well might.

More guff can be found by reading the whole speech. I am convinced that if more people actually listened to, or read, what he says rather than just admire the timbre in his voice, his reputation would deservedly plummet still further. There is reason to despair.