The unexpected victory by Scott Brown in last week’s Massachusetts special election to fill the vacancy created by the death of Sen. Ted Kennedy last year has cast a pall for the Democrats over tonight’s State of the Union address.

Just a few weeks ago the White House was preparing for what they thought was the guaranteed passage of the president’s health care reform package and the retention of a Senate seat that has been in Democrat hands since 1952.

Well what a difference a few weeks make.

The Democrats not only lost the Kennedy seat but in doing so they may have lost the health care battle.  Scott Brown campaigned on the fact he would be the 41st vote against health care and there is no doubt that he will keep his promise.  In the meantime the Democrats who have been trying to work some back room deals in order to get a bill to the president have been bickering over what to do leaving the president little choice but to go ahead with his first State of the Union speech without the benefit of his key prop.

Now the president is left with trying t convince the American public that we are on the right track despite an unemployment rate that has risen to a twenty-six year high throwing another four million people out of work that has contributed to a rising tide of home foreclosures despite the administration having thrown billions of dollars at the industry in an effort to stem the flow.

Obama will also have to defend his $787 billion stimulus program which has failed to create the jobs or stimulate the economy as promised while running up a deficit that topped $1 trillion last year and will do so again in the current fiscal year.

So what is Obama’s answer to the deficit?  It is to freeze spending except for certain areas that are deemed essential.  This is from a man who previously said that spending freeze’s don’t work.  That’s one thing he has right.  With all the exceptions to the freeze and working from inflated baseline figures the budget will grow while tax revenues continue to lag.

We don’t need a spending freeze, we need spending cuts combined with tax cuts to stimulate the economy.

The Democrats who just a year ago were brimming with confidence and optimism that the 2008 election results would cement their power for decades to come thanks to Obama’s promises of bipartisanship and transparency are now fighting amongst themselves as they watch their health care bill die an ignominious death and face the prospect that they will lose control of the House in November.

For Barack Obama a night that was supposed to be a celebration of his first year in office has turned into a fight to regain the public’s confidence in him and his party.

The Obama administration’s attempt to revive the economy by increased government spending has resulted in the federal deficit topping the $1 trillion level for the first time.

According to the Treasury Department the June deficit was $94.3 billion pushing the current year total to $1.09 trillion with 3 months remaining in the budget year.  The administration is expecting the total deficit to come in at $1.84 trillion but that may be optimistic based on how the economy is performing.

And so far the economy isn’t cooperating.  The White House pushed for and received a $787 billion stimulus program and the money has been trickling into the economy at such a slow pace that not only has the unemployment rate risen to 26-year high but there is now talk of a second stimulus package.

Obama and the Democrats seem to be wedded to the idea that increased government spending is the only way out of this recession.  But the only thing we have to show for all the taxpayer money being spent is a record deficit that is expected to grow larger, possibly to $2 trillion before it heads lower.

Add to that the fact that overseas investors especially from China who have been large buyers of U.S. government debt are now getting nervous that their once safe investments may not be so safe after all as the deficit soars.

Apparently the administration isn’t too concerned about the long term damage that their policies are inflicting on our economy.  Maybe, just maybe some of the government spending will actually spur some parts of the economy back to life, but at what cost?  Our national debt is already at $11.5 trillion and growing fast.   As interest rates will likely rise when the economy does eventually recover the cost of servicing that debt will soar further crippling the U.S.   A vicious cycle to be sure.

Instead of the real hope and change that the Obama promised he would deliver if elected we are getting more of the same tax and spend policies that Democrats love.

Buddy can you spare a trillion?

Chicago’s famed ritzy shopping district known as the Magnificent Mile is a little less magnifent these days as the recession has taken told in the windy city.

According to an article in the Wall Street Journal this week vacancies in the area are at the highest level since 1992 when another Democrat was president versus 4.4% in 2007 and just 1% in 2002.  With the almost daily announcements of job losses it is a a good bet that more stores will pull back from the pricey real estate and drive the vacancy rate even higher in the months ahead.

There are currently about 450 shops that line Lake Michigan and the Chicago river, but retailing is under heavy stress as shoppers switch from luxury to lower end stores to take care of their basic needs.

Local politicians haven’t helped the situation any either by raising the sales tax in surrounding Cook County to 10.25% which is the highest in the country and privatizing public parking meters where the rates have soared to $3.50 an hour.

These moves were an attempt to close a $12 million budget deficit but the real effect has been to curb spending even more by consumers who are already wary which leads to lower overall sales tax revenue.  Call it a destimulus package.

The country is currently in the worst economic situation than most people can ever recall having lived through.  That is particularly true for local and national elected officials who are now facing steep budget deficits as a result of years of profligate spending.  Rather than make the truly necessary budget cuts, they resort to increasing taxes and fees to plug the gap.  It may look good on paper, but history has shown that the net effect is to balance the budget while killing future growth.

If the pols continue to raise taxes and fees in thename of balancing the budget the Magnifient Mile will be more like a Magnificent Mess.

When the Democrats took control of Congress in 2006 they imposed their own version of fiscal conservatism known as pay as you go budgeting or “paygo”.  Under this policy the Democrats promised to offset any new spending increases or tax cuts with comparable tax increases or spending cuts.

It didn’t take long for the Democrats to quickly abandon their newly found spending restraint by waiving paygo restrictions no fewer than a dozen times that accomodated nearly $400 billion in new spending.

Yet despite this reckless behavior House Majority Leader Steny Hoyer reiterated his support as well as Speaker Pelosi’s support for paygo.

Now comes word from Rep. Jim Cooper (D-TN) that the Democrats are going to do away with paygo.  Why would they do that?  Because as Cooper was quoted as saying “It would be unfair to the new President to put him in a budget straitjacket.”  Whate he really means is that now that we control the White House the rules have changed regarding spending.

Conservatives complained about paygo and called it a sham which it was though the mainstream media said nary a word about this deceptive policy.  It’s just the first step in a return to the Democrats favorite tax and spend policies which undoubtedly receive little attention from the press especially under a new Democratic administration.

The people spoke last Tuesday and everyone will now pay a steep price for their folly.  Don’t say that you weren’t warned.