New dawn? This looks more like a new dusk

PUBLISHED: 17:19 EST, 7 November 2012 | UPDATED: 03:39 EST, 8 November 2012
The next four years for America look bleak. It’s not so much a new dawn as a new dusk. And with 50 months left in power, President Obama, his hands tied by a Republican-controlled House of Representatives, is a lame duck already.
He was re-elected despite a majority of voters thinking the economy is on the wrong track. And with tax rises that could wreck recovery due on January 1 – the so-called ‘fiscal cliff’ – experts fear a recession here in 2013.
The most sensible policy – which a Romney administration would have pursued – is deficit reduction. Instead, the second Obama term will increase the deficit, further diminishing America’s economic power and credibility.
Lame duck :President Obama, pictured with his wife and daughters at an election night party, has his hands tied by a Republican-controlled House of Representatives
Contradiction: Obama won the election with a decent majority over Romney, despite a majority of voters thinking the economy is on the wrong track
Around $1trillion a year will be added to debt – bringing the total to $20trillion by 2016. This will drive up interest rates on US bonds, and hard-pressed Americans will have to pay more taxes to fund higher interest payments.
Meanwhile, the President is determined to push through his ‘Obamacare’ health insurance policy, which would account for a large part of that increase.
 

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But the Democrats are well aware that the pumping of federal money into corporate bail-outs and infrastructure projects in declining regions is the key to creating a state clientele that keeps voting them back into office.
The administration is already devising stealth taxes to help pay for the bribes it wishes to offer the coalition of minorities that comprise its supporters. Some will corrode the core of American self-reliance, such as taxes on any substantial capital gains made from house sales. Others are simply opportunist, such as a tax on tanning salons.
Obama's 'Obamacare' aims to increase the governments funding of healthcare for Americans, but will cost billions- adding to the crippling debt
These are all measures of how desperate the financial situation is – a reality apparently kept from most of the American electorate, so far.
Washington observers speak of the incompetence of the Obama administration – not just its ability to waste money, but also to target funds so badly. There is very little to show for the $787billion fiscal stimulus of 2009. A fraction of it could have been used to create serious sea defences around New York and New Jersey, to avoid the devastation of last week’s storm, for example.
Sensible: Mitt Romney (seen here with his wife Ann during his election night rally in Boston) would have pursued deficit reduction, which is the most viable option to save America's economy
Sensible: Mitt Romney (seen here with his wife Ann during his election night rally in Boston) would have pursued deficit reduction, which is the most viable option to save America's economy
Many feel that Super-storm Sandy occurring so close to the election swung many voters in Obama's favour
Many feel that Super-storm Sandy occurring so close to the election swung many voters in Obama's favour
Swingeing taxes that fall disproportionately on wealth-creators and entrepreneurs will not be all that stalls an economic recovery. So too will a failing national infrastructure whose state of disrepair is beyond pork-barrel handouts from Washington to local communities, but requires a big federal programme – and big federal money.
Roads, rail and airports all cry out for investment and improvement. But as long as money is thrown at failing industries – such as in the car industry bail-out that helped Mr Obama win Ohio and Michigan this week – the administration cannot afford to take big strategic decisions such as these.
The domestic economy is, however, only the beginning of Mr Obama’s problems. The Republicans will do all they can in the House to obstruct high-spending and socially damaging policies – creating legislative deadlock.
 
  
And as America subsides into a welfarist, subsidy culture, so will its paranoia about China – already running at near-hysterical levels in some manufacturing regions – grow. America increasingly fears China both as an economic and a military titan – the two components of being a superpower.
Defence cuts in America are inevitable once the borrowing binge brings serious damage to the economy – as it will by mid-term, if not before – and that will increase the nation’s sense of vulnerability towards the Chinese. 
And America’s intractable unemployment problem – it was 8 per cent when President Obama assumed office and is 7.9 per cent now – is increasingly perceived as the result of a highly disciplined and well-trained workforce in China that systematically undercuts over-regulated American business.
Mr Obama must choose a new Secretary of State. Hillary Clinton – who may well run for the Democratic nomination in 2016 – has signalled a wish to stand down. Whoever succeeds her – and a favourite is John Kerry, who lost the 2004 presidential election to George W Bush – has to deal with Iran’s determination to become a nuclear power, and that state’s continuing threats against Israel.
The human cost of such a conflict would be terrible, and American diplomacy might not be equal to preventing either Israel or Iran choosing to strike at the other. 
Less widely appreciated is the catastrophic effect it would have on the global economy through oil prices, and especially on an America that is already hobbling.
Team: Obama called Biden 'America's happy warrior' as he paid tribute to his role in the election campaign
Team: Obama called Biden 'America's happy warrior' as he paid tribute to his role in the election campaign
Obama’s supporters claim the worst is over, and the best is yet to come.
Such clichés patronise not merely the American public who, by re-electing him, have chosen the soft option rather than a confrontation with economic reality. They also patronise a substantial part of the developed world that, even if it no longer looks to America for political leadership, relies for its standard of living on the US being economically strong.
On the evidence of the past four years, notably Mr Obama’s record of serial economic incompetence, the next four are going to be exceptionally trying – and, sadly, not just for Americans.