Go ahead and comb through the transcript of Obama's inaugural speech . All in, Obama hit all the liberal themes: Eat the rich, public spending on infrastructure is key to create wealth, teachers are awesome (and they are, but, strictly speaking education is a local issue), equality under the law for gays (I agree with that one), and "sustainable energy." And don't forge the ladies! He pushed for "equal" pay for "equal" work. Oh, and he gave a nod to the importance of public spending (roads and bridges) to presumably fuel the economy and etc. And he invoked God to prove that we should follow the aims of the environmental lobby. Yep, it was all in there. I will get to his remarks about entitlements (Barry hasn't a clue about economics), but this remark is Orwellian and, well, scary (to me at least): . . . "But we have always understood that when times change, so must we; that fidelity to our founding principles requires new responses to new challenges; that preserving our individual freedoms ultimately requires collective action."
It was a wonderful spectical, even I have to admit. Beyonce and Jay-Z were there, Beyonce killed it today. So did Katy Perry (pictured), ever the patriot given that she is clobbered out in some fine red-white-and-blue sequined number, for the Kids' Inaugural on Saturday (must start "influencing" the kids early!). I get the feeling that was a veiled suggestion that the Constitution is outdated (i.e. especially the Second Amendment) and that only "communitarianism" can set individuals be free. I get the feeling that he does not believe in individual libery, only the collective, groups. He didn't say it, but judging from his past policies and stated aims, it is obvious that Obama would like to re-write the Constitution.
What does all this mean to the capital markets? To individual retirees? Barry implied that he intends to spend, spend, spend on entitlements we can no longer afford (mandatory payments already accounts for 62% of the federal government's spending). Obama is apparently ignoring the fact that current spending is unsustainable. In November 2008, in our annual survey of retirement issues, we wrote in our cover story, "Promises Will Be Broken ":
Not only are private companies buckling under the strain of fulfilling their future pension obligations . . .
The government itself is also facing some tough times ahead: It is running historic deficits and, recently, the national debt has been growing at a pace never before seen in this nation's history. (And that's saying something.) The promises on the books for future payments from entitlement programs — from Social Security to Medicare — already represent $53 trillion. That works out to about $175,000 per person.
The trouble is, we haven't got $53 trillion. “Social Security trust funds are a misnomer, and, in fact, they're an oxymoron,” says Peter G. Peterson, a former secretary of commerce and chairman of the Blackstone Group. “They shouldn't be trusted and they're not funded.”