I dislike Gary North’s writing style immensely and as a prognosticator North has done much to destroy his own credibility. However, in his brief analysis of Dinesh D’Souza’s documentary film 2016: Obama’s America,1 North presents a straightforward critique directly related to his field of expertise (economics), and I found this article to be a worthwhile read.
In his article entitled If Only D’Souza Were Right, North incisively takes issue with the primary thesis of D’Souza’s documentary, that our national economic woes are primarily due to the policies of the Obama administration. On the contrary, North argues, the Obama administration is the ‘operational successor of the Bush administration.’ I’m sure that must sound preposterous to Democrats and Republicans alike, but on the matters in view, especially the economic matters, North backs up his apparent overstatement.
North focuses our attention upon what he deems to be the best part of the documentary, an interview with David Walker, the former comptroller general of the United States under the last Bush administration. North makes three important observations here.
‘The deficit is vastly worse than the movie portrays.’ Specifically, the documentary focuses attention upon the ‘on-budget debt of $15 trillion’ while the far more economically relevant figure is the ‘$222 trillion present value of the unfunded liabilities of the off-budget deficit’.
North cites a Bloomberg article, and here’s the relevant part. ‘The U.S. fiscal gap, calculated (by us) using the Congressional Budget Office’s realistic long-term budget forecast — the Alternative Fiscal Scenario — is now $222 trillion. Last year, it was $211 trillion. The $11 trillion difference — this year’s true federal deficit — is 10 times larger than the official deficit and roughly as large as the entire stock of official debt in public hands.’
Seriously, stop a moment and take that in. It’s an unimaginable mountain of debt obligation, and far more important to recognise than the much smaller (though equally unimaginable) figure typically bandied about.
‘[Walker] blamed George W. Bush as much as he blamed Obama. He says on camera that the turning point on the deficit began with Bush’s presidency. He showed that we are headed for a fiscal disaster, and it may overtake us during the presidency of whoever is elected in 2016.’
North agrees, and emphasises that in relation to our economic situation we are ‘dealing with a single political administration, which began in January 2001.’ That is, both administrations have pulled in the same direction in relation to the most critical political and economic policies.
- ‘[N]either Walker nor D’Souza mentions on-screen what should be the obvious constitutional fact — namely, that it is the Congress that legally initiates all spending bills, and it is the House of Representatives that holds the hammer constitutionally.’
As North points out,
We are living in a bipartisan, congressionally mandated, slow-motion train wreck. The Congress of the United States could stop Obama today as easily as it could have stopped Bush. Congress is not interested in stopping the deficit; it is interested in avoiding all responsibility for the annual $1.2 trillion on-budget disaster that is the federal budgetary process.
Finally, North points out that the documentary leaves unaddressed the other big player in the economy, the Federal Reserve System. This agency operates largely as a private banking conglomerate with some Federal governing oversight and involvement at the highest levels. It’s structure is designed to allow it to act independently in relation to its most critical powers over the U.S. economy.
North concludes, D’Souza keeps the ‘Federal Reserve in the background in the thinking of the viewers, when the Federal Reserve ought to be in the foreground, with the presidency in the background. This is basic economics. D’Souza does not know what he is talking about with respect to economics.’