The constant refrain from the Democrats these days is that they are fully justified in the massive spending programs they are racking up because the last administration also ran up massive deficits. The fallacy of this argument should be self evident, yet somehow they are not being called on it. Washington has now committed well over $12 TRILLION worth of spending thus far and that figure seems to be climbing daily. For perspective, if one adds up the Louisiana Purchase, all New Deal programs, the Marshall Plan, the Korean War, the Vietnam War, the S&L bailout, the Second Iraq War and the space program (adjusted up for inflation) the entire package would only come to $3.9 trillion.
And so the spending spree goes on at an absolutely astonishing rate, making the last Bush Administration almost look like fiscal conservatives in comparison. Whereas Bush racked up new borrowings to the tune of roughly $500 billion a year, the Obama administration is projecting next year’s deficit at roughly $1.85 trillion. Worse yet, these deficits are projected well into the future by a number of independent analysts such as the Congressional Budget Office.
Of course, these massive spending levels are being justified as needed to kick start the economy again. This is, at best, a lame excuse. Economists are evenly divided as to whether such spending will work. Half say yes, half say no. The standard statistical approach suggests that the best way of measuring the impact of such spending is to say that for every dollar spent, fifty cents worth of stimulus will be realized. Considering that we are both borrowing massive amounts of money and printing just as much, this can hardly be said to be a wise move.
Nor is the spending in anyway well thought out. Apart from the massive and unprecedented levels of pork that have been layered in, now in the hundreds of billions of dollars, it is reasonably clear that the proposed new programs will not work as intended. It takes talent to turn-off the full spectrum of commentators, yet this is precisely what the new bank bailout proposal has done. From the Wall Street Journal on the right to Nobel Prize winners in economics Paul Krugman and Paul Stiglitz on the left have all decried the proposal. Even the very liberal New York Times columnist Frank Rich has called this Obama’s “Katrina moment.”
As far as stimulus is concerned, the authoritative Economist magazine has estimated that 77% of the proposed spending will not occur until 2010. By then it will be way too late to have the desired stimulatory impact. No, it is becoming evident that something else is happening. It is very much starting to look like the Obama Administration has learned another bad lesson from the just departed Bush Administration.
It is now clear that the current spending spree is to the economic crisis what the Iraq invasion was to the 9/11 attacks. If the Bush Administration used 9/11 as a pretext to attack Iraq (something the were itching to do) then the Obama Administration is using the crisis to undertake all of the liberal spending programs that the Democratic Party has built up on the shelf for the past eight years. Worse yet, they are engineering a radical shift in the economic affairs in America.
In the confusion they are hoping we will not see what is going on. The big question is, are they right – the American people won’t catch on? Only time will tell. But as the saying goes, “Fool me once, shame on you. Fool me twice, shame on me.”
Bob Bestani is a resident of Newmarket, NH a Visiting Scholar at Stanford University and a candidate for Congress in NH’s 1st Congressional District.