1. Contents:
If you want to skip the detail , the conclusions provide a
reasonable Cliff notes summary (page-14)
1- Where we are: The Promises: This is what we were
promised by this president:
2- Where we are today….. The Result of the Promises:
3- This is where we are going : This is where we are headed
with this presidents policies: Apocalypse Now:
4- Conclusion: The Report Card and Implications
Gary Crosbie
1

2. This was what we were promised by this President:
 Promises made as a result of passage of the two flagship pieces of
legislation by the president relative to the economy :
 868 billion Stimulus Bill:
 Remember Obama stated ….”President Bush’s increase in spending of
4-5 trillion dollars was unpatriotic” .
 But… He would cut spending and reduce the deficit in Half by the
end of his first term:
 The 868 billion( 1 trillion with interest) stimulus package would
result in peak unemployment of 8% and 6.7-6.9% by the end of his
first term
 Create or save(?) NET three or 4 million jobs
 Obama Care:
 The president said that he would not pass a healthcare bill that would
add one DIME to the deficit. Obama Care would cost aprox 900
billion dollars and decrease the deificit by approx 140 billion over 10
years
 That you would be able to keep your doctor if you chose
 That the bill would be transparent with input from both sides 2

3.  Result of the Promises PART-1
 1- Stimulus Package: Instead of cutting the deficit in half and reducing
spending ……………….to the contrary:
a) The total debt was approx. 9-10 trillion dollars at the end of the Bush administration. An increase
of approx. 4-5 trillion(>approaching 17 trillion) dollars over 8 years.
b) This president has not cut spending …to the contrary he has spent 4.5- 5 trillion dollars over 3.5
years. So…this president doubled down on the debt…Obama spent in 3.5 years what Bush spent
in 8 years bringing our spending from 18-20% to 24-25% of GDP. The average is 18-20%.
c) The deficit has increased from 479 billion in Bushes last year to over I.2 trillion dollars every year of
O’bama’s presidency
d) The unemployment rate that was supposed to peak at 8% in 2009 has exceeded 8% every month
and averaged about 9.4 % since 2009 .
e) The result of the stimulus, instead of saving or creating 3-4 million jobs ..the economy , by the end
of 2011 has a net loss from his first day in office of more than 2 million jobs. 23 million Americans
are either unemployed or underemployed with the lowest participation rate of 63 % since 1981 .
f) Because of the low participation rate the real unemployment rate is between 15-18%. As an
example in April despite the fact we added 116,000 private sector jobs , 343,000 totally dropped out
of the work force…. This is why the unemployment rate went down from 8.2 to 8.1 . Because more
and more people are either losing there 79-99 months of unemployment and or are just totally
discouraged and there fore are NOT counted by the bureau of labor and statistics. This is also why
we have a NET loss of jobs in 3.5 years. 3

4.  Result of the Promises PART-2
 2- Obama Care: Instead of modifying and improving the entitlement
system (Medicare and Social Security) the president established a brand new
entitlement program……therefore to the contrary:
 Obama cuts 500 billion dollar from a bankrupt entitlement, Medicare to fund a
brand new entitlement program for 7-15 million people.
 Obama care based on new CBO estimates states that the plan will cost twice as much
as the original 940 billion dollars to 1.76 trillion dollars
 This Increases the deficit to plus 340 billion over 10 years.
 It should be noted this is a very conservative estimate because once the law is fully
implemented in 2014 there will be a mass exodus of companies from providing
private heath care to there employees. The penalty will be 2-3K per employee..With
the average cost of Healthcare of 12-18k per employee this is an obvious business
decision. For a 2-3k penalty per employee, employers will eliminate healthcare
coverage for there employees in mass. This will force increasing costs on the new
health care system not included in the study.
 This will also mean individuals will NOT be able to keep there personal
doctor/Physician
 Note…this moves us closer to the long term strategy of the left for a single payer
socialized healthcare system
4

5. 2-This is Where We Ended Up:
 By the Far Worst recovery of any
recession since world war 2-Chart-
1 By Far the worst
recovery of 19 post
 Only two other recessions WW2 Recessions..
achieved -4% job losses at its
trough. This recession achieved
-6.5% and is just getting back to
the worst previous achieved
trough of -4% 38 months
later.Chart-1
 While the recovery is positive it’s a
Jobless and a growth-less recovery
 Note every other recovery
achieved positive job losses >0 on Lowest participation
Rate since 1981.=24
chart 1 million people are
 This recession.... has lost a net of 1- unemployed or
underemployed- Real
2 million jobs since the president unemployment 16-
took office due to the lack of 18%
growth and low participation
rate(workers dropping out of the
work force) Chart-2
 No other president has had less
employment at the end of his term
than when he started 5

6. 2-This is Where We Ended Up:
1. The change in
employment is by far The slope is neg indicating
the economy is worse than
the worst of any post
when the president took
office
world war 2 recession.
See blue line in chart-.
It has a negative slope
reflecting no progress
in 3.5 years.
2. The percent change of
the worst recession
was -5%
3. This recession is
approx. 20% worse at
- 6 % -Chart-2
6

7.  The consensus GDP forecasts are around 2. to
2.4% not sufficient to significantly reduce
unemployment . Barely sufficient to maintain
sufficient growth to avoid a double dip. We
need 4-5% growth , 250-300k jobs created a
month just to keep up with job participation
and 300-350k jobs consistently per month to
make a significant difference in
This is where we
need to be to unemployment statistics.
create jobs  The poor growth is due to a lack of
leadership and uncertainty in this
administrations position on tax policy ,
healthcare and regulations.
 There are 10 new regulations coming out of
the govt. per day placing business in the
position of spending more time on
compliance than generating new capital
formation for growth and job creation.
Where we are 1.7- Regulations are stifling new C&I loans which
2.2 % growth are the drivers to new capital formation
,growth and jobs.
 This particularly applies to small business
who is responsible for 70-75% of GDP growth
7

8.  First Chart: This president has increased the debt 4-5trillion
dollars in 3.5 years that it took Bush 8 years to accumulate. This
has resulted in deficits that have exceeded 1 trillion dollars a year
for every year he has been president putting him as the only
president to accumulate more in deficits in one term than ANY
president serving one or two terms in the history of the country
 Note that Obama’s deficits are two to three times Bush’s at there
highest year by year and are greater (sum of deficits) in 3 years
than all of Bushes 8 years. Also note the dramatic reduction in the
The downward slope of deficits in 2003-4 and 5 down to 167 billion was due to tax cuts
deficits in the Bush admin
was due to the tax cuts which flushed the treasury with new revenue due to new
business capital formation
Bush Obama
 Note the presidents budget (red in chart-1) sets the country on a
dangerous fiscal course leading to massive future deficits ranging
above the 900-1 trillion dollar range in the majority of future
years. Also NOTE these huge deficit projections by the CBO occur
The apocalypse for EVEN WITH the presidents assumption of the end of the Bush
future generations tax cuts in 2013 and therefore even with 2 trillion in tax increases
The slope the presidents budget pushes the country off a fiscal Cliff.
increases  Second Chart: Note chart to the left: As Washington continues to
exponentially spend dramatically more than it can afford, every American will
be on the hook for increasing levels of debt. Without reining in
spending, the amount of debt per citizen will skyrocket from
approx. 36k per capita in 2012 to over 100K in 2031 and approx.
136k in 2036.
8

9.  1- Chart - The major entitlements.— Medicare, the
Obama-care subsidies, and Social Security are pushing
spending to unsustainable levels. These programs must
be restructured to prevent crippling debt or tax burdens
on future generations. This president has offered NO
plan for restructuring Social Security Or Medicare. In
Note the
significant
fact he is using funds for Medicare to fund a brand new
increase in the entitlement program , Obama care.
slope and area
of net interest
 2- In fact the presidents own Fiscal commission headed
by Bowles and Simpson who had a bi-partisan fiscal
plan on tax reform; lower tax rates thru eliminate
deductions broaden the base , cut spending and initiate
entitlement reform was rejected by the president . HIS
OWN COMMISION.
15%  3-Bottom line….Spending on Medicare, Medicaid, Social
Security, and the Obama-care subsidies will soar as 78
million baby boomers retire and health care costs climb.
Currently Revenue to
GDP approx. 15%. Total spending on federal health care programs will
Barely covers more
entitlements and
defense in 2012-2015
• than double. Future generations will be left with an
untenable debt burden.
 4-Note the red line which assumes 18.1 % revenue of
GDP ..a long run average barely covers defense and
entitlements with the remainder to be borrowed including
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accumulated interest on the debt.

10. Refer to chart previous page
 5-Due to the poor policies of this administration low growth has resulted in
an actual revenue to GDP% of around 15%.(see green line in chart on
previous page ) . Thus barely covering defense and entitlements till about
2017-2020 but not discretionary spending or the interest on the debt.
 6-Thus this chart exemplifies the fiscal cliff facing the country today. Note the
exponential growth of the net interest on the debt. This assumes the current
rates which is unreasonable. As future charts will show as that rate goes up
which will happen closer to the average rate of 4.5-6 % net interest alone
will squeeze out entitlement obligations.
 7-The key to increasing the revenue to GDP ratio is simple…..follow the
Regan, Clinton and George W Bush economic plans…..improve incentives to
business to generate NEW capital formation by cutting marginal tax rates
 8-That would include cutting capital gains and dividend rates that would
have a multiplier effect on new capital formation for business .which
geometrically generates investment , consumption and employment.
 9- Now…There is a lag of about 1.5 to 2 years but the result is significant
increases in revenues to the treasury as a result of this policy. 2 Years after the
Bush tax cuts additional revenues resulted in a deficit for George bush of 165-
176 billion dollars in 20007. Similar results for Regan and Clinton.( See chart
on previous page 8)
10

11.  As previous slides illustrate the current slide
simplifies the point that we are spending more (red
line) than we produce (Total GDP), blue line.
Total Debt
is 102% of  This is the Fiscal Cliff and really underestimates
GDP the problem .
 In the chart to the left we include only current debt.
GDP When we include unfunded liabilities ….
 15.6 trillion for Social Security
 82.06 trillion for Medicare
 With Medicaid the total reaches a staggering
118 trillion dollars.
Debt Fiscal Cliff  As previous discussion pointed out, without
significant reform in entitlements , given the
retirement of baby boomers and soon(2019) only 2
people working for every one on benefits our
financial system will collapse and we only need to
look across the pond at Greece or Spain to see the
9/2011 4/2012 game play
2
 The presidents budget FY 2013 despite 2 trillion in
tax increases actually increases the debt to GDP
ratio. 11

12. 3-This is Where we are Headed with This Presidents Policies
Apocalypse Now:
 Given the serious Fiscal Cliff defined previously
remember this assumes a rational term structure of
interest rates…a market based yield curve.
Currently the yield curve on the short end has been
artificially manipulated by the federal reserve.
Bottom line the cost of debt is artificially
Assuming current low….when the fed takes off the breaks or the bond
low artificial rates vigilantes decide interest rates need to normalize
to reflect market risk premiums, rates are going to
increase to norms with the 10 year normalizing
around 5.5-6 %. This is not discussed enough
because tripling of the interest rate will
geometrically negatively effect the magnitude of
the Fiscal Cliff as well as the time to provide
workable solutions without significant pain.
 In 2011, as the chart reflects, the U.S. spent more
on net interest—interest paid on publicly held debt
—than it spent on many federal departments,
including Education and Labor.
 Again this result is an optimistic short term view
given the artificially capped low interest rate by the
fed with the fed funds rate at.025 and the 10 year
Bond rate at under 2%..
12

13. The Nuclear Falling Knife
- The Bond Vigilantes
The Red line assumes, like today that the
A. The chart to the right is the nuclear bond rates are artificially pegged at 2% for the
falling knife where the deficit and debt 10 year bond. The rates will go up and if they
assume the 30 year average of 5-6% the debt
situation results in another downgrade cost would exceed the defense budget mid
or a normalization of rates by the bond 2014 and in 2019 would be 1.5-1.7 trillion
dollars a year literally exceeding expenditures
market… higher….an average would on Soc Sec and or Medicare.
be 5-6 percent having a draconian
impact on our cost of debt.
B. In the chart to the right the redline Interest rates
increase to free
shows as the debt grows the interest market rates of 4.5
cost on the debt overtakes the cost of -5.5%
defense spending in 2019.
C. If entitlements are not reformed the risk
premium for debt will go up
dramatically. Assuming a best case
scenario If it just goes up to the average
of the past 30 years of 5-6% the effects
are catastrophic….not only exceeding
the defense budget by mid 2014 but
pushing out expenditures for all
entitlement programs, Medicare, social
security, Medicaid etc. etc.. 13

14.  Report Card:
 Cut the debt in half by the end of first term.
 Failed…
 We spent 1 trillion dollars on a Stimulus package. The result was the debt went up between 5-6 trillion
dollars….
 a 50% increase in spending
 More in 3.5 years than Bush spent in 8
 No shovel ready jobs (by the presidents own admission..”Shovel ready jobs weren’t very shovel ready”)
 Result is we have a 102% debt to GDP ratio which means we spend more than we bring in’
 Reduce the unemployment rate as a result of the
stimulus to 8% by 2009 and to 6.5-7% by 2012 .
 Failed…
 Despite his promise….The unemployment rate has never been below 8% .
 This is the longest term of unemployment greater than 8% since World War 2.
 The average for his tenure is 9-9.4%
 For the first time There are 1-2 million fewer people working than when the president took office
 Total Transparency in Governance:
 Failed
 Despite the Presidents promise for leadership that cronyism would leave capital hill and
legislative decisions would get bi-partisan support ….
 both the stimulus and the Heath care bill were passed behind closed doors and even with a
majority house and super majority senate required payoffs to senators to pass the Healthcare law
14
(La purchase, Cornhusker kickback etc.)

15. Report Card (con)
 Leadership: On budget, Jobs, energy, deficit and fiscal
reform.
• Failed:
• What kind of Leader establishes a Fiscal Commission and TOTALLY
IGNORES the results: The president established his own Fiscal commission
headed up by Erskine Bowes and Alan Simpson. There was bi-partisan
participation to deal with the budget , deficits and recommendations for
entitlement reform that are driving us toward the Fiscal Cliff defined in this
paper. The results were completed and approved December 2010.
• Now there were some problems with pieces of the legislation from both sides
of the aisle ..but with presidential and congressional leadership we could have
at least tackled the tax reform issue that is such a critical first step(50% of the
people in this country pay no taxes) to helping us deal with our long run fiscal
problems.
• The president refused to further review, take up, act on any of the
recommendations of his own commission. As a result nothing has been done
by the president to engage in anyway with republicans to attempt a first step to
resolve the issues that threaten our fiscal solvency within the next 2-5 years.
• The House has incorporated most of the recommendations of Simpson Boles in
15

16. Report Card (con)
 Leadership: On budget, Jobs, energy, deficit and
fiscal reform.
• Failed:
• What kind of leader other than a radical environmental socialist invests in
green technologies that go bankrupt (e.g.Solyndra etc.) costing the taxpayers 100’s of
millions of dollars despite the fact cost benefit analysis from the Bush administration
refused loanable funds because the companies were financially unsound..
• What kind of leader while still in the midst of a recession recovery increase
taxes on those earning >250K a year (the producers) to 44%(including Obama care
taxes) and triples the capital gains tax on new investment to 30% when 70-80% of
those are small businesses that contribute to 70% of new employment and 75 % of
GDP. Studies show for every dollar that reduces marginal and capital gains rates
generates $1.7-$2.5 in additional revenue to the government.
• Finally the ultimate confirmation of leadership. The president has
submitted two budgets to the senate. The first was voted on and was voted down
97-0. The second was voted down by 99-0.
• Forget republicans….NOT ONE DEMOCRAT voted for the presidents budget
for TWO YEARS.
• What kind of leadership presents two budgets that not ONE PERSON
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17. Report Card (con)
Leadership:.On budget, Jobs, deficit and fiscal reform.
(Con)
• Failed…
• What kind of leader In a job and growth less recovery would deny the completion of
the Keystone Pipeline. A project that has been fully vetted by state and federal
environmental agencies (with the exception of a very few ideological environmental
extremist) for over 3 years and would guarantee 20K direct union jobs (150-200k
complimentary jobs)and more energy independence from the middle east. The result would
be …if this does not get resolved quickly because of Obama…..Canada will sell the oil to
China.
• What kind of leader….except the most arrogant, egotistical and self centered individual
would go back and adjust all the official biographies of past presidents to insert his
supposed accomplishments…to self aggrandize his presidency to include Factoids on
nearly every president's bio page going back to Calvin Coolidge.
• What kind of leader would in the process of bailing out General Motors for 50 -100
billion tax payer dollars literally destroy contract law by subordinating secured bond
holders assets (who were first in line in the division of ownership). This in effect destroyed
there wealth by subordinating them to the unions and union pension funds and giving
ownership to the UAW who were responsible for the demise of GM in the first place.
• What kind of leader would allow the Senate to by-pass its constitutional responsibility
to the American People by NOT PASSING A BUDGET IN OVER 3 YEARS.
17

18. Implications:
If you have problems as I do with this presidents policies today.
Think what it will be like when he does not have to worry about re-
election. Bottom line if we re-elect this president ..everything
discussed previously will continue and we will be on the “Road to
Serfdom” with:
Higher taxes that will stifle GDP growth, capital formation and job
growth
Bigger government which will insert itself into every aspect of
your life..Freedom as we knew it will be a memory.
Cradle to grave entitlements will bankrupt the country and when
its to late ……the pain for correction will be severe and our
evening news will remind us of Greece.
Fiscal policy will center around class ware fare...re-distribution of
wealth from those who produce to those who do not.
18

19. Implications: (Con)
 Our credit will be downgraded due to our 118 trillion dollars of unfunded
liabilities for entitlements and no plan to become more fiscally
responsible
 The bond market will increase our risk premiums on loanable funds through
higher interest rates which will grow so dramatically that the cost of net interest
on the debt will approach and eventually exceed our expenditures for entitlement
programs.
 The result will be more borrowing and higher interest rates thus hyper inflation
that will challenge the misery index of the Carter administration.(>20%)
 Stagflation will be the way of the future where inflation is greater than the growth
rate of GDP.
 We will continue to be over regulated(10 new regulations a day) with Dodd Frank
as a classic example. So while you can’t walk around a financial institution
without being run over by a regulator who won’t allow banks to lend or create
capital….JP Morgan Chase just lost 2-3 billion dollars in questionable derivative
trading….So where was the savior 2600 page Dodd Frank??????
 Welcome to the USA of Greece and a lost Century.
19

20. Given the previous conclusions the question becomes:
1- How did this guy get elected in the first place……?
2- Why do we pay him ?
3- How can we stop paying him since all he does is
campaign , play golf and vacation on taxpayers
money.
4- Who is going to vote for this guy in Nov?
5- If you are going to vote for him….
WHY?
20

21. As Jerry Seinfeld once said in one
hilarious episode …..
In response to a Kramer
-ism………………
“You are an Idiot wrapped in
a Moron.”
(IT’S A JOKE!)
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