On the State of the Union, and Deficit Spending

So, as a disaffected liberal, I had no real intention of watching the State of the Union. At least, not all the way through. But old habits die hard, and I turned on the State of the Union to catch a few minutes. Well, a few minutes turned into the full hour and ten minutes, plus the post-speech commentary. I did skip the Republican response, but it looked like it didn't suck, so the GOP has that going for it.

Anyway, my quick thought was similar to the iPad - if you're an Obama fan, there was a lot to be happy with. For the first time in a long time, I was reminded of why I voted for the guy. I loved that he told the Democrats to stop being pussies, that he told the GOP that they're going to own the obstructionism, and most of all, I loved that he chastised the Supreme Court for its decision. That Justice Alito reacted was all the better. If ever there was a President who would make a good Supreme Court Justice, it would be Obama.

Now, if you're not an Obama fan, this speech probably pissed you off. It was combative, and sarcastic, and worst of all, really, really good. Obama in a formal speech setting is like Peyton Manning just before the two minute warning: you know he's going the score, and there's not much you can do about it.

That said, I have a nit to pick with Obama - the budget freeze. Per everyone's macroeconomic course, we all know that the GDP is made of up three things: consumer spending, business spending, and government spending. Because of the current economic conditions, consumer spending and business spending is down. Also, local and state governments have cut back their spending as well. So, the only thing that can prop up the economy right now is the Federal Government, and increasing overall spending. Freezing domestic spending in this climate is dumb.

Now, I understand why the GOP wants to prevent any government spending - once the government starts spending money on something, its hard to stop. That's why the Bush Administration and the Republican Congress spent like crazy. And when asked what to cut, most Republicans sound like this.

So, what to do? I think rather dramatic spending on infrastructure is called for, but with clear sunset provisions. The beauty of infrastructure spending is that once the infrastructure is built, the spending stops. However, the benefits last for 10-20 years after. So, let's keep spending for a short period of time.