Here is a good example of the fundamental problem, as the administration throws away $2.1 million for nothing.

President Barack Obama is spending $2.1 million to help Suntech Power Holdings Co. build a solar- panel plant in Arizona. It will hire 70 Americans to assemble components made by Suntech’s 11,000 Chinese workers.

…

“The cost of manufacturing here is too expensive compared to Asia,” said Guy Chaffin, chief executive officer of Elite Search International, a Roseville, California-based executive search firm that has found employees for Tempe, Arizona-based First Solar and Solar Millennium AG. “As far as a flood of good jobs coming to the U.S., we’re not seeing it.”

The U.S. is simply not competitive. It is running on its credit cards.

What’s worse, it is wasting the money it is putting on its credit cards on consumption, when it could be borrowing to invest. When it finally figure that it needs investment, it won’t be able to borrow anymore. It is violating rule one – when you’re in a hole, stop digging.

Speaking of digging, Bloomberg’s Caroline Baum writes, on the subject of Obama’s “job-creating” initiatives:

The only thing missing from the energy-cleansing, rural- community-assisting, climate-change-mitigating, health-food- promoting blueprint is money for pyramid building. In Chapter 10, Section VI of “The General Theory of Employment, Interest, and Money,” John Maynard Keynes advocated building pyramids as a cure for unemployment.

In fact, “Two pyramids, two masses for the dead, are twice as good as one,” he wrote in his 1936 treatise.

How hard is it to see the absurdity in that statement?

It is true that hiring people to produce unneeded and unwanted goods and services boosts employment. But it is pure waste. It is neither enjoyment or investment. It simply manipulates the numbers into a false picture of the economy. Which of course is being extensively done these days. Productivity growth is reported, but is simply the result of incorrect accounting for the impact of imports, as if those 70 workers were producing the output of the 11,000 Chinese. Employment is misrepresented by the birth/death adjustment, which we will learn tomorrow added more than 800 thousand jobs in the year through last March which simply never existed. Since then the same model, estimating jobs in new small businesses, has added nearly a million more jobs, which clearly don’t exist either. The administration certainly doesn’t want honesty, because that would further exacerbate the building rage. But it is like setting the mileage back on a used car. It doesn’t make the car less worn or more reliable.

It is also clear the the government’s biggest Ponzi scheme, Social Security, is coming unglued. It will be cash-negative for the first time this year, meaning that it will start to be a drain on the beleaguered Treasury, rather than a source of funds. Look for panic in the next year or two.