as part of our
"So, together, we have cleared away the rubble of crisis, and
we can say with renewed confidence that the state of our union is
- President Obama during Tuesday's State of the Union address
I'm all for leaders inspiring optimism. But not when it entails
lying to my face! Is the United States stronger from an economic
standpoint? Compared to 2008, absolutely. Out of the woods and on
solid footing? Not even close!
The President went on to say that there's still an "unfinished
task" ahead of us. Instead of calling that a lie, too, I'll give
him the benefit of the doubt and say it was merely an
understatement of epic proportions…
Although the official unemployment rate is exactly the same as
it was when President Obama first took office (7.8%), the labor
participation rate keeps trending lower, and currently rests at
I'm sorry. But when more than 40% of all working-age Americans
aren't working, that's not good for our economy. Investing in
education might be a long-term solution. In the here and now,
though, we simply need to create more jobs. And not just in the
It's not good either when 1 in 4 children are on food stamps. Or
when 1 in 13 Americans are collecting disability. Or when the
median household income falls for four consecutive years.
I could go on with a laundry list of statistics testifying to
the persistently sad state of our economic affairs. But that's not
my intention today. Instead, I want to share the biggest threat
facing our nation and, in turn, our investments.
And I can do it with a single chart.
When President Obama first took office, the U.S. debt-to-GDP
ratio checked in under 50%. It's now nearing 100%, according to
BlackRock's calculations. Other calculations peg the current ratio
But that's beside the point. What matters most is that by
calculations, if our government continues on its current
trajectory, we're going to be in rarefied air with Japan. And not
in a good way.
Forget about blaming any President or political party for the
problem. First, we need to get politicians to realize that it's
actually a problem.
Minority Leader of the House, Nancy Pelosi, recently said we
have a "budget deficit problem." Then, House Minority Whip, Steny
Hoyer, said it's really just a "paying-for problem."
Come again? For those of us who confront the reality of home
economics with every paycheck, it's a spending problem. Plain and
simple. And denial is the first indication that there
Bottom line: The "state of our union" might be stronger. But
much more progress is necessary. Otherwise, it's going to get much
weaker… in a hurry!
Straight up, it's time for politicians to stop
about debts and deficits, and instead start
something about eliminating them. They remain the biggest threat to
our democracy and our investments.
So don't be afraid to speak up and let them know that the time
to act is long overdue. After all, this is a democracy.
Feel differently? Let me know at
. I could use some fodder for an upcoming question and answer
column. So feel free to fire away the most challenging investing
question, the most over-the-top testimonial, or the most biting
criticism you can muster up.