Just 17 years ago that the American Journalist Charles Krauthammer spoke of the dawning of a new era in which, for decades to come, the United States would serve as the epicenter of the world order. Only five years have passed since then-US Secretary of State Colin Powell told an audience at Davos that America claimed the right to initiate unilateral military action.
Fast forward to today, the day after President Obama's State of the Union speech. You will discover that we have elected a President that has forgotten what a Constitutional Lawyer should have ingrained upon his mind. Last night, Obama said he believes the role of government is to lay the foundation “for our common prosperity.”
Somebody should remind this Constitutional scholar that the Federalist Papers tell the President that his first responsibility is the safety of the PEOPLE!
Instead his speech detailed his three most important issues are National Health Care, develop a Carbon Trade system as part of energy conversion and pouring more money into a failed Education System. At the same time he is going to try to cure cancer, save Detroit auto works, save the banks or take them over and rebuild the infrastructure of America.
What he neglected to mention is what he will do to perpetuate the safety that former President Bush provided US with after 9/11/01! In fact a close look at his proposed budget shows that he will cut the Defense spending by cutting back the production of the F-22 fighter jet , reducing the size of the Nuclear Submarine fleet and stopping the construction of super carriers for the Navy.All this while the mullahs in Iran put together their nuclear bombs! And if you have not noticed the Russians are making overtures that appear to be a prelude to establishing Naval bases in Venezuela and even possibly Cuba!
Meanwhile,the government faces mounting pressure to put billions more in some of the biggest U.S. banks( B of A and CITICORP), two of the biggest Detroit automakers and the biggest insurance company(AIG), despite the billions it has already committed to rescuing them.
The government's boldest rescue to date, its $150 billion commitment for the insurance giant American International Group, is foundering. AIG indicated Monday it was negotiating for tens of billions of dollars in additional assistance as losses mounted.
Separately, the Obama administration confirmed it was in discussions to aid Citigroup, the recipient of $45 billion so far, that could raise the government's stake in the banking company to as much as 40 percent.
In an unexpectedly assertive joint statement after two weeks of bank stock declines, the U.S. Treasury Department, the Federal Reserve and bank regulatory agencies announced that the government might demand a direct ownership stake in major banks that do not have enough capital to weather a deeper downturn. The government will begin conducting a test of the banks' financial health this week
As the administration takes bigger stakes in companies, the value held by existing shareholders is being diluted, which could make it even harder to attract private money in the future. Timothy Geithner, the secretary of the Treasury, recently outlined a bank recovery plan that included a new program to attract a combination of public and private money to buy troubled mortgages and other assets.
The difficulty of shoring up AIG must weigh on the administration at this moment. The administration's banking statement amounted to plan of action demonstrating a way to demand a major and possibly a controlling stake in systemically important banks like Citigroup and Bank of America.
Yet the President had the fervor to pledge that he would cut the budget deficit in half by the end of his first term in office. That deficit reduction will be accomplished in part by tax hikes on high earners – those making more than $250,000 a year, he said. There goes the middle class of the USA!!!!
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