By Kevin McElroyNEW YORK ( TheStreet) - "Wealth must be produced. It can't be borrowed or printed." -- Ian McAvity I didn't pay much attention to President Obama's State of the Union address on Tuesday night. Most of my colleagues in this business use these types of major news events as a pump-primer for sales efforts. But to be honest, I just can't get myself psyched for this type of marketing opportunity. I see these State of the Union addresses the same way I see the cheerleaders at football games: nice to look at, but really of not much material importance. Our federal government is beyond broke, and it has neither a coherent plan to cut spending enough to allow current taxation to start paying down deficits nor any stated plan to raise taxes to the sky-high levels that would be necessary to fund deficits. So when Obama says something like, "We've already identified $20 billion in savings for next year," and the lawmakers and dignitaries in the audience applaud, I just think of all the pretty cheerleaders saying "rah-rah-rah sis-boom-bah." Twenty billion dollars isn't even enough money to mention in the State of the Union address -- and the fact that people applaud that savings shows you everything you need to know about the address. But then a few seconds later the president said something that tells you that he either knows nothing about the real world, or that he's a liar. "I would have liked nothing more than to start bringing down the deficit. But we took office amid a crisis. And our efforts to prevent a second depression have added another $1 trillion to our national debt." His assertion is that he and the Congress were forced to bail out banks, car manufacturers, insurance companies, and buy other troubled assets in order to help the economy. In order to fund those expenditures, the federal government created money out of thin air. Of course, we know that creating wealth out of thin air is not possible, so the fact that Obama undertook to do so shows that he is either a fool or a liar.
His statement on Tuesday night compounds his guilt. "I'm absolutely convinced that was the right thing to do." You might be thinking that Obama has no choice but to play the part of the optimistic cheerleader in his State of the Union address. The truth of the matter is already a foregone conclusion, so we and Obama would be better served hearing it. There's no sense in sugar-coating the truth. Americans will find out that our debt levels are unsustainable, that the dollar is in danger of insolvency, that our children will be tax slaves to pay for the federal government's spendthrift habits. Here's what President Obama should have told us during his State of the Union address: "My fellow Americans, we stand here on the precipice of a great danger. The standard of living we have all enjoyed for the past four decades has been built on unsustainable debt loads. "The State of the Union, in the simplest possible terms is that we are bankrupt. And since we are the lender of last resort to so many people and institutions, our fiscal infidelity has had and will have drastic consequences. "But I'm standing here today as the last American president who will kick this problem down the road. Starting tomorrow, I will push Congress to enact a drastic budget revision which will cut all but the most important federal services. "I will pull all troops from overseas so that these brave fighting men and women -- in the prime of their lives -- can come home and help rebuild America. I will deploy these troops to infrastructure rebuilding projects for the remainder of their service, after which time I will cut the military down to a strong force capable of defending American shores from any foreign invasion. "I will reduce and in many cases abolish many of the cabinet departments that have been a leech and a drag on taxpayers and small businessmen alike. "I will abolish the Federal Reserve and move all fiscal and monetary powers into the hands of the Treasury and the Congress. No more will an independent group of bankers have the power or mandate to micro-manage the greatest economy on the planet.
"I will end all forms of welfare. No more will any individuals or corporations receive special dispensations. In order to enact this ambitious promise, I will propose a flat tax for earners and businesses which will reduce the tax burden for all Americans. "No longer will American taxpayers bear the brunt of corporate and personal irresponsibility. The American taxpayer is too big to fail -- no one else. I will let bankrupt corporations go bankrupt. I will let individuals do the same. "No more special treatment. And I will propose a constitutional amendment which makes it illegal for state or federal governments to go a single penny over their budgets. "These measures will be strict, difficult and painful -- but they're absolutely necessary to guarantee the future livelihoods of hardworking, honest Americans, and they're the only way to salvage this Federal Government from total insolvency. "Good night." If President Obama gave this speech, I would sell all of my gold and silver and open up an apple pie business. But the fact is, he's either unwilling or incapable of doing what's necessary to save the federal government from itself. So I'll be buying gold and silver. Good investing, Kevin McElroy, editor of Resource Prospector