Despite the public outrage with and spectacular failure of his signature policy initiatives, in last night’s State of the Union Obama confidently promised to pursue an ambitious liberal agenda of intrusive government. Like a desperate poker player with a losing hand, Obama is too proud to fold, and hopes to bluff his way to victory. Along with the usual tedium, vacuity, and arrogance of any Obama speech, the State of the Union was also rank with deceptive rhetoric, misleading half-truths, and outright lies. Some of the most egregious examples are described below.

1) “Let me repeat: we cut taxes. We cut taxes for 95 percent of working families.”

First of all, 95% of Americans do not pay taxes, and it is impossible to cut taxes for those who pay none. In fact, according to the latest Census, the bottom 40% of Americans paid no income tax, while the top 5% (whose taxes Obama refuses to decrease, and is in fact planning to increase) paid 60% of income taxes. True, “working families” pay the payroll tax, but that grants eligibility in entitlement programs like Social Security and Medicare, as well as insurance for unemployment or disability.

What Obama and Congress did was issue “refundable tax credits” to Americans, most of whom have little or no tax liability. Typical tax credits are reductions in an individual’s owed taxes, but “refundable” tax credits  are not limited by any tax liability. So even if an individual owes no taxes, he is still eligible for a refundable tax credit (or according to Obama, a “tax cut”), paid to him as income rather than as a decrease in tax liability. A more accurate term for this policy is “income redistribution,” since it is essentially redistributing income from taxpayers to non-taxpayers.

Refundable tax credits have no significant effect on long-term economic performance. People’s consumption is based on a projection of their permanent income over their lifetime, and is not very responsive to brief fluctuations. Effective tax policy should permanently decrease tax rates on payroll, income, and capital gains. Permanently lowering these rates creates firm incentives to spend, save, and invest, which will increase output, improve economic efficiency, and expand employment. Temporarily redistributing income does nothing to ensure lasting prosperity.

2) “Because of the steps we took, there are about 2 million Americans working right now who would otherwise be unemployed.”

Obama is referring to the utterly specious “created-or-saved” concept, something never before measured in economics until his infamous stimulus. White House economists concocted this bogus metric to insure against the failure of the stimulus; “jobs saved” could always be cited as an illusory caveat to “jobs lost.” When the stimulus failed to keep the unemployment rate below 8% (it has grown to 10.8%), Democrats began trumpeting “jobs saved,” rather than “jobs created.”

To illustrate the absurdity of the “created-or-saved” fiction, if there are only 3.5 million jobs – the amount which Obama swore he would “create or save” – left in the United States in 2012, Obama will be able to claim that he fulfilled his stimulus promise.

3) “According to the Congressional Budget Office — the independent organization that both parties have cited as the official scorekeeper for Congress — our approach would bring down the deficit by as much as $1 trillion over the next two decades.”

This outrageous claim is based upon a deceptive budget trick devised to hide the full cost of ObamaCare from the public. Nevertheless, Democrats have shamelessly seized this flawed factoid to hype healthcare reform as fiscally responsible, though in reality it is prohibitively expensive and ultimately unsustainable.

The Senate healthcare bill implements new taxes years before new expenditures, phasing in the full cost later to make it appear more affordable in the short-term. In fact, 98% of the bill’s new expenditures occur after 2014 – so much for all the hysteric the-time-is-now rhetoric – though new taxes – such as a payroll tax increase of .9% on income exceeding $200,000 – begin immediately in 2010. Unsurprisingly, the media has mostly fallen for this gimmick – front-loading taxes and back-loading expenditures – and have only publicized the Congressional Budget Office’s evaluation of the deceptive initial ten-year projection, ignoring that the next ten years are estimated to cost an additional $2.8 trillion (three times the cost of the first decade), totaling $3.6 trillion over 20 years, or $180 billion per year.

4) “We have made substantial investments…”

The Democrats have cleverly misappropriated the term “investment” to replace “spending.” In the State of the Union, Obama celebrated new government “investments” – rather than more spending – in environmental technology, education, healthcare, and the military. Investment has a more positive connotation than spending, since the former expects a return while the latter does not. Describing government expenditures as investments makes the spending sound less wasteful and arbitrary, and gives the impression that it will yield something valuable over time.

Government expenditures, however, do not even slightly resemble investments. An investment is the purchase of an asset – such as a stock or commodity – which may depreciate or appreciate in value over time. When the government budgets tax revenue, it is not investing in assets, but either consuming goods and services or redistributing income. Neither of these activities can be considered an investment in anything except perhaps the careers of politicians.

5) “Starting in 2011, we are prepared to freeze government spending for three years. Spending related to our national security, Medicare, Medicaid and Social Security will not be affected. But all other discretionary government programs will.”

This pledge is mere political posturing, not meaningful policymaking. Obama has shown no real concern for the economic consequences of deficit-financed spending, though he is fond of lecturing others about them between bouts of fiscal incontinence. Over the past year, Obama presided over an 18% increase in federal expenditures of $536 billion. After accounting for all the exceptions to his “spending freeze,” the proposal only applies to 17% of the federal budget, the annual appropriations of which Obama already increased by 22%.

This spending spree is not fully financed by tax receipts. The Congressional Budget Office estimates that in the next three years of the Obama Administration, outlays will exceed receipts by $3.7 trillion. The CBO projection, however, fancifully assumes that Congress will repeal all of Bush’s 2001 and 2003 tax cuts, make unrealistic decreases in Medicare reimbursements which lawmakers have avoided doing for over a decade, and does not even include the impending cost of ObamaCare. Discounting the CBO’s optimism, Obama’s deficits could easily exceed $4 trillion.

Now, after setting record increases in the budget, senselessly approving wasteful deficit spending, and adding vast sums to the national debt, Obama is now preaching fiscal discipline, and will “freeze” his recently bloated budgets to much fanfare. This utterly insincere gesture will have a negligible effect on the government’s unsustainable spending trends and mounting debt, forcing future generations to answer for the fiscal profligacy of politicians like Obama.

The State of the Union betrayed Obama’s ideological radicalism and staggering arrogance. Obama has committed to a divisive agenda of intrusive government, and is employing dishonest tactics to disguise his liberal agenda of intrusive government as “common sense” and “pragmatism.” Rather than assume responsibility for his failures, Obama blames others – Republicans, Wall Street, Big Oil, Fox News, and insurance companies – for the country’s problems. The redistribution of resources from useful sectors of the economy to useless sectors, nationalization of failing industries, corrupt dealings with favored special interests, and shakedown of businesses will continue to plague American prosperity. Under the Obama Presidency, the United States faces a dismal future.