If you believe what you read, the battle over the stimulus package has been a partisan one. The Democrats want it - the Republicans don't. And that story has played out as the vote squeaked through in the middle of the night.
So, if you buy that line of reasoning - President Obama's plan is now in place.
So, with that in mind - I found myself sitting in an auditorium in Long Beach with some of the smartest people on the planet this week. And as the stimulus debate raged in Washington, I listened to Juan Enriquez present a contrarian view of the country's financial crisis that was chilling. And perhaps made more chilling by the fact that Enriquez says the stimulus package will in fact make things worse.
Said Enriquez: "We're living in a debt crisis not a liquidity crisis. The fundamental problem is too much debt. And now we're adding debt and adding debt and adding debt. We're adding that debt in places that are not going to generate more jobs or economic output."
What is critical here is to know that Enriquez isn't preaching pop-economics. Rather, he's presenting a deeply analytical and carefully researched argument. And with his triple threat background in business, economics, and science - he's got the processing power to actually lay out a cool and calculated argument that bears investigation. In his view, the stimulus is going to pour gasoline on the fire. Otherwise, in his words: "the Dollar is toast."Says the Harvard trained MBA,
So, has the administration reached out to Enriquez? Clearly not.
The only part of the economy that generates new output are start-up companies. The fortune 500 have generated net negative jobs over the last 30 years. It's startup companies that are .2 percent of GDP that have generated 17.8 percent of economic output. That's where we've got to be investing.
Enriquez has a strongly worded warning for President Obama: "Quit spending money you don't have, because our kids - it isn't just our kids who are going to pay for it, we're going to pay for it and this crisis is going to get a lot worse if we don't start controlling our spending."
The other thing we've got to do is politically untenable but absolutely essential. The country has a crisis - a cancer - that is called debt. If you've got cancer you've got to go through radiation, you've got to go through surgery, and you've got to go through chemo. That chemo looks like capping medical spending which is going to eat the entire budget. It looks like asking people to retire two years later if they're fifty to sixty, four years later if they're under fifty. And cutting back on the military about 3% a year. If we don't start doing these things and show those that own the US Debt, which is mostly foreigners that that trend line is going to start to come down instead of accelerating very quickly in terms of overall debt we're going to be in real trouble.