Morici: Eurosclerosis Comes to America

NEW YORK ( TheStreet) -- Abroad and at home, President Obama with unprincipled pragmatism is undermining America's most cherished values, economy and liberties.

When the Egyptian military ousted a duly elected government, Obama didn't cut off aid as required by U.S. law. Instead, he validated a libertine mob, generals and bureaucrats who felt their interests threatened by the majority of voters who preferred a more conservative regime founded on traditional Arab values.

Limiting U.S. objectives in the region is justified as part of the U.S. pivot toward Asia, which the Commander in Chief fashions as countering Chinese influence. However, whether the issue is currency manipulation, refusal to behave responsibly on environmental issues or human rights, the president protests verbally but appeases Beijing in his actions with a terrible loss of jobs at home and a loss of face with Asian allies.

The commitment of additional naval resources to the Pacific is small and inadequate. That leaves Japanese Prime Minister Shinzo Abe to weigh bending Japan's post-war constitution and rearming, lest he risk American abandonment when it counts in its territorial disputes with China and access to Middle East oil.

It's really all about a diminished America retreating because the president has cut military spending to expand the welfare state and now can't afford the fleet the country needs to sustain its historic commitments.

Europeans from France and Spain to Greece have demonstrated governments obsessed with sheltering their citizens from all risk and redistributing income can't grow.

Now, Eurosclerosis has come to America.

The Congressional budget office projects that if federal spending on health care, social security and other pensions continue on the course charted by the president, Americans at all levels will pay more taxes over the next two decades than those prior to the financial crisis, deficits will spin out of control and economic growth well below 3% will be the norm through the mid-century. The country simply won't be able to sustain its military at anything like its present level as entitlement spending squeezes out resources for defense, science and technology, and just about everything else.

Corporations and wealthy individuals are already taking their money to foreign shores -- even changing their nationality and citizenship -- to avoid stagnant opportunities and oppressive taxation.

Now, many more ordinary Americans receive means-tested federal benefits than work, and the number of adults not wanting any job at all is at a record level. The combination of guaranteed health care, other benefits and high taxes has consequences for ordinary people's inclination to work for a living.

Obama is right that a nation with a leisure class at the bottom will reliably vote Democratic, making party elites happy. However, the United States can't afford the military it needs to defend its interest or meet its foreign obligations and will have to seek whatever accommodation it can with a rising China over the next several decades.

The pivot to Asia and "changing America" are nothing more than a veiled surrender, not to France as many conservative critics lament, but to China.

Anyone who cares about liberty should be frightened by that more than anything else.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.
Professor Peter Morici, of the Robert H. Smith School of Business at the University of Maryland, is a recognized expert on economic policy and international economics. Prior to joining the university, he served as director of the Office of Economics at the U.S. International Trade Commission. He is the author of 18 books and monographs and has published widely in leading public policy and business journals, including the Harvard Business Review and Foreign Policy. Morici has lectured and offered executive programs at more than 100 institutions, including Columbia University, the Harvard Business School and Oxford University. His views are frequently featured on CNN, CBS, BBC, FOX, ABC, CNBC, NPR, NPB and national broadcast networks around the world.

If you liked this article you might like

Economy Would Be Better Off With a Republican President

Economy Would Be Better Off With a Republican President

A Professor's Message for the Holidays: Time to Celebrate!

A Professor's Message for the Holidays: Time to Celebrate!

Paris Climate Conference Is a Bad Deal for America

Paris Climate Conference Is a Bad Deal for America

Weak U.S. Jobs Growth Is Only Part of a Bigger Problem

Weak U.S. Jobs Growth Is Only Part of a Bigger Problem

What Walmart's and IBM’s Troubles Really Tell Us About the U.S. Economy