Admittedly, it was an inadvertent lie. Perhaps Adam Smith's publisher made him do it with an eye toward spurring sales of his book, popularly titled 'The Wealth of Nations'. Had Obama been aware of the full title of the book, An Inquiry into the Nature and Causes of the Wealth of Nations, perhaps he could have penetrated the 'lie', but perhaps not. Obama has already established a great track record for borrowing the lies of others if they are useful to his political agenda.
In any event, Obama obviously believes that national governments can either generate or produce wealth when, as Smith goes on to tell us in his book, they cannot.
You see nations, as entities per se, do not and cannot produce wealth. Nations acquire or accumulate wealth by spoiling on the successful economic activity of their residents and citizens. It's a symbiotic and parasitic relationship. If the host (the population of the nation) prospsers then so does the parasite (the government of the nation). If the host suffers, then so does the parasite. The host that the USA nation spoils upon is suffering and is about to suffer much, much worse.
It is, indeed, just as if Obama were killing the goose that has laid so many golden eggs to make us the richest nation in history. It's as if he intends to cut the goose open to get all the golden eggs inside at once.
Although it's probably not true for the last 2 or 3 generations, almost every schoolchild 40 years ago could have told you a little bit about Adam Smith and his 'invisible hand' that magically compels any product or service to eventually settle at it's true price through market mechanisms. As communists and socialists have historically learned to their sorrow, market distortions and displacements can be introduced and temporary advantages gained, but the market, even in command economies, will eventually force almost every market distortion to settle at it's true value to the marketplace, even if it takes a black market to do it.
Command economies have historically dealt with this using a measure called tyranny.
That 'invisible hand' is about to smack Obama and the US economy really hard. The mechanism, of course, is escalating debt and monetary destruction. The result will be misery and suffering for millions of the US population.
Signals are already coming from the bond markets and our efforts at quantitative easing. Neither are working and the market is seeking solutions (safer havens for excess capital). Obama's treatment of the GM bondholders just made the situation much, much worse. If he will enthusiastically give GM bondholders the shaft, what does he have planned for other bondholders, whatever their flavor?
We (our Treasury) are seeing our bond sales undersubscribed (we are not able to borrow enough of the newand huge amounts of money at reasonable interest rates on the bond markets). In order to try to stimulate demand (attempting to create a 'shortage' and thus higher demand) for our bonds and lower the interest we must pay for this borrowing, the treasury has been 'buying' our own bonds. Except, of course, when the treasury is 'buying' it's own debt (bonds) it doesn't really have to pay for them. Nor does it really have to 'pay them back' or redeem them. The net effect is the creation of new money - 'printing money' if you will - but this 'quantitative easing' activity is much more efficient and creative than simply running the presses all night, every night, at full speed.
It's like taking a year's US currency production from the presses and making it magically appear in an instant with a couple of simple computer transactions at the Treasury Department. No paper and ink required - who would be so stupid as to waste time printing money?
The documentation of a 24% shortfall in expected IRS revenues in April (the month when our government expects the highest revenues) just adds to the pressure. Borrow more. At a higher interest rate, so carrying and servicing the debt is more expensive. More debt on the debt.
As we borrow more, and interest rates rise from this excessive borrowing, we pay more and more of each month's revenues just in interest. Pretty soon, it will take all, or almost all our revenue just to service the debt. With nothing left over for essential government services like police, fire, ports, roads, and defense. Or the redistribution of wealth.
But of course, we will continue to print money and engage in the quantitative easing illustrated above to get the new funds to continue. In historical terms, it's always been called debasing the currency. They tried it in Rome and it didn't work. They tried it in the Weimar Republic and it didn't work.
Plenty of other historical precedents obtain, and always the result has been disaster and misery for the governed.
It means, of course, more and more dollars chasing fewer and fewer goods and services through our economy which means inflation. BIG inflation on the scale we are discussing here.
This is bad enough, but it gets much, much worse.
So let's consider for a moment those 'fewer goods and services' because this is where the squeeze really comes in. The production of goods and services - all the thingsd you and I want and need to buy from bread to gasoline require capital to produce. And capital is fleeing our shores. Just google 'offshore domicile' and you will see the burgeoning industry growing around helping even the smallest company domicile itself offshore or provide safe investments for dollars that wish to flee US jurisdiction. And foreign capital which used to rush to our shores is now vigorously avoiding us.
Obama wants 'social justice' and 'economic justice' and wants to 'redistribute the wealth' but it must all be done in just the right way don't y'see? Cars must be green (and I'm not speaking of their color here). We have seen how this government is going to stimulate our auto and our energy industries. Every industry in the country is going to come under cap-and-trade and Obama will deliver on his promise to make energy prices skyrocket. With Obama's green industrial and economics policies, we are seeing unemployment soar during a recession (we would probably be emerging from the recession now if now for his policies) we are seeing our economy wither.
Add to that that our new 'Smart Power' is alienating our friends who are threatening trade wars and ignoring genuine security threats in Iran, North Korea, Israel and many other places, and you have a formula for global depression - with the US mostly to blame.
Obama thinks he can fool and command the market, but he will discover to his sorrow that he cannot. While he is currently successful at commanding and fooling the mainstream media, that is not the same as fooling and commanding the global economy. Many in the political corpus (the voters) are willing to allow Obama to take a swing at this foolishness, hoping that Obama's success will mean 'free money' and 'wealth' for those who choose to be economically unproductive.
The actual result will be global depression, and an absence of the reliable rule of law, which will simply further delay the recovery after a serious period of diminished productivity and wealth creation.
Because of this, thank goodness, Obama will be a one-term president. But the damage he will do to every global citizen will take much longer than 4 years to repair.