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Jewish World Review July 5, 2010 / 22 Tamuz 5770 Swimming upstream: Even ‘spendaholic’ Europe is urging fiscal restraint on the United States By Jack Kelly
http://www.JewishWorldReview.com | The Canadian government spent more than $1 billion (Canadian) on the G-8/G-20 conferences last weekend, epitomizing the wretched excess that's largely responsible for the worldwide economic crisis. Most of the money spent for the three-day gathering of the leaders of the world's largest economies was for security. But the tab included $2 million for a marketing and media pavilion in Toronto, which included a $57,000 fake lake. "There is a nagging sense police, public servants and politicians are wallowing in a bottomless trough they figure Canadians will constantly replenish," wrote James Travers of the Toronto Star. Canadians didn't get their money's worth on what was spent on security. Toronto police officers, decked out in newly purchased body armor and riot gear, made some arrests but mostly stood idly by as thugs broke windows, looted stores and burned automobiles -- including police cars. Other than the rioting, nothing much usually happens at these annual confabs. "As predicted, it cost much and accomplished nothing," said Walter Russell Mead of the Council on Foreign Relations. "No decisions were taken, no minds were changed. Politicians had their pictures taken; the press hailed mushy communiques as breakthroughs and delusional protesters played silly 'revolutionary' games." But this summit was noteworthy in that for the first time ever, nobody else paid much attention to the president of the United States. Reuters published a list of "winners and losers" at the G-20. There were just two losers, according to the British news service. One was Brazil, because its president didn't show up. The other was America, whose president did. "President Obama enjoys summits," said George Wittman, founding chairman of the National Institute for Public Policy. "They give him a chance to posture on the international scene. Both the G-8 and the G-20 have figured out they don't have to do anything but let him preen. They then go about their own way without losing a step." "President Obama ... was rudely ignored," agreed Andrew Leonard of the left-wing Webzine Salon. This happened partly because some of his fellow heads of state think Mr. Obama is a lightweight. (His first remark upon arriving in Canada was to inquire about golf courses in the area.) But it is mostly because he was calling for more deficit spending at a time when the leaders of Canada, Britain and Germany have concluded this will result in fiscal catastrophe. "You know the United States has gone way, way down the path to unsustainable debt when governments in Europe -- spendaholic Europe -- lecture the administration on fiscal restraint and ultimately carry the day," the Chicago Tribune said in an editorial Tuesday. Mr. Obama didn't cause the recession. But his policies have deepened and lengthened it. Only one economic downturn in modern U.S. history has lasted longer. You know which one that was. "The president, his friends and advisers talk endlessly about the circumstances they inherited as a way of avoiding responsibility for the 18 months for which they are responsible," wrote Carnegie Mellon University economist Allan Meltzer in The Wall Street Journal. Mr. Obama thinks we can spend our way out of recession, which is kind of like a fat guy thinking he can eat his way out of obesity. But Mr. Obama's call for more deficit spending indicates even he realizes his stimulus measures have failed, Prof. Meltzer thinks. Underlying the president's $862 billion stimulus package is the belief that consumer spending drives economic growth. But this is exactly backward, a confusion of cause and effect. Economic growth makes it possible for consumer spending to increase. The problem is made worse because the president keeps heaping additional burdens on the private sector, the engine of economic growth. Obamacare was a savage blow. The 2,000-page financial "reform" bill -- which does absolutely nothing to address the causes of the subprime mortgage crisis -- will be another. "The contrast with President Reagan's anti-recession and pro-growth measures in 1981 is striking," Prof. Meltzer said. "Reagan reduced marginal and corporate tax rates and slowed the growth of nondefense spending. Recovery began about a year later. After 18 months, the economy grew more than 9 percent and it continued to expand above trend rates."
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JWR contributor Jack Kelly, a former Marine and Green Beret, was a deputy assistant secretary of the Air Force in the Reagan administration.
© 2009, Jack Kelly |
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