During the Vietnam War, Senator Aiken of Vermont became famous for allegedly saying that the U.S. should “declare victory and go home.” He didn’t say anything about going home, but the phrase lives on in American folklore as a solution to intractable problems. President Obama adopted the stratedy in his Saturday radio address, saying that the America is “more than halfway” in dealing with its massive budget deficit, thanks to his January budget deal with Congress.

What a joke.

That unilateral declaration of half a victory was based on totally unrealistic assumptions, such as projections of future economic growth more than double the rate of the last four years. It includes the delusion that current near-zero interest-rate monetary policy, and thus the cost of financing the deficit, is sustainable out into the future.

The fact that they were attributed to the Congressional Budget Office makes them no more plausible. The CBO bases its projections on assumptions of future policy, no matter how unlikely it is that such policies will actually transpire.For instance, the Fed can’t hold the line on interest rates forever. It’s only a matter of time before the dam breaks.

But this false vision from the President’s crystal ball cleared the way for what he will say tonight in the first State of the Union address of his second term, make still more promises of manna from Washington. He will promise government measures to create jobs, lower college tuition burdens and work other miracles that somehow didn’t materialize from the similar promises he made four years ago in his first State of the Union address. To finance them, Mr. Obama will need more money added to the already swollen government budget.

The President tipped off in his Saturday address that he will ask the Congress to take a more “balanced” approach toward budgeting. That’s a codeword for agreeing to yet more taxes and giving up the only weapon House Republicans have to try to control this President’s spending appetites, the budget sequestration calling for 10% cuts in controllable spending due to kick in on March 1 if no further budget deal is reached.

“Controllable” spending, of course, doesn’t include the massive entitlement programs, so 10% is not a huge impact on the overall budget. “Spend, spend; elect, elect” is still the President’s political strategy and his success with it in getting himself reelected is something to lose sleep over in the wee hours of the night. .

A pre-emptive declaration of victory over the deficit is a clever tactic for hoodwinking the voters. But it only emphasizes that the President has willfully ignored the issue of monetary policy since he took office, specifically the damage his policies, and accommodation to them by the Federal Reserve, is doing to the dollar.

The President loves the Federal Reserve’s near-zero interest rate and its extravagant monthly purchases of $85 billion in new federal debt, because it finances his dream world of a beneficent Washington that addresses all ills and miraculously cures them with borrowed money. But Federal Reserve acquiescence doesn’t make it less of a dream world.

In his one-sided January deal with Congress he got higher payroll and upper income taxes for mere token cuts in spending. Those taxes will stifle economic growth. So will Obamacare, which this year begins to offload new costs onto state governments and business, not to mention taxpayers. The prospect that economic growth will significantly lower the government’s borrowing costs is dim indeed.

The dollar will continue to weaken. Inflation pressures will continue to mount. In short, don’t look for anything in the President’s speech tonight that will reveal the true state of the union. Mr. Obama’s administration of federal economic policy has left the union in a state that can be summed up with a single word: precarious.