I know that the President’s words in his inaugural address are true — America is, and Americans are, capable of doing great things under very pressing circumstances when they are of a mind to do so. We have done much more remarkable things than we are called on to do now, in more trying times and against greater odds, than we face now. There are yet alive many people who saw America through some of her darkest days and emerge not just victorious, but brilliantly so.
So why can’t we do it now? Why can’t we remake our nation into something much greater than it is today?
Well, for one, there’s no plan in place to do anything. For all of the high-flown talk of hope and change and possibility and responsibility, we have yet to see any substantial and concrete policy agenda from Team Obama. That will change, I know. The question is whether the policies that are ultimately advanced are stopgaps, accomodations, and compromises (which is what I’m expecting) or whether they’re going to fit together into some kind of a grand plan like the New Deal’s basic idea of using the government as an economic instrument of creating infrastructure. Obama mentioned something like that, but it seems almost an afterthought.
But more to the point, unlike the New Deal — which was also funded with deficit spending — we are hip-deep in debt already. Nearly a dime out of every dollar that the government collects from you goes to servicing the national debt. Our national debt right now is more than three-quarters of our GDP. As a nation, we are broke.
If we weren’t paying today for things the government did when people were still watching Love At First Bite and The Muppet Movie at the movies, back during the Carter Administration, we could have had more than $260 billion more than we did to spend on all those good governmental things we enjoy so much, like the military, Social Security, bridge building, and prisons. Or even a little bit of governmental regulation and oversight on the financial industry.
To have those things now, we have to deficit spend. Which means financing these things with a variety of instruments, including the beloved 30-year T-bill. What that means is that when my next door neighbor’s daughter is my age, she’ll still be paying for the economic relief that’s allegedly underway right now. That’s simply not fair to her and her contemporaries — they will have problems of their own to address in thirty years, and making them pay for us solving our problems today is going to tie their hands. Probably a lot more than ten cents’ on the tax dollar’s worth, too, the way things are going.
Now, I’m not the only Obama skeptic out there. But these are my big reasons — so far, it’s all talk, and I’m hoping that by the State of the Union an action plan will be in place; and no one has any idea of how to pay for whatever it is that we’re going to do.
I realize that there can never be zero debt. Day-to-day financing of governmental activity requires the use of at minimum short-term debt instruments (things like 90-day, 120-day, and one-year T-bills) and other efforts by the government to cover shortfalls and keep the government operating smoothly. But if we define reducing the federal debt to a manageable and sustainable level — say, 10% of GDP — as a great national goal and achievement, that would make me happy.
Won’t happen, of course, until we’re out of the rescession. But when it does, I’ll be looking for the politician and the party who truly embrace and pursue fiscal responsibility.
