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Jewish World Review
Jan. 13, 2009 / 17 Teves 5769
My city, Washington, D.C., is going bonkers for Obama. So is yours no doubt. Shopping for party favors, I came across in addition to key chains and light-up necklaces T-shirts and coffee mugs emblazoned with the Anointed One's photograph. Jan. 12's Washington Post carries a story about Obama attorney Greg Craig. He took the job imagining he'd be confronting knotty separation of powers issues. And he may. But for now, he's "charged with stopping the commercial exploitation of his client's image the Obama can openers, Obama chocolate chip cookies, Obama chocolate bars and the like now on sale just about everywhere."
I've never witnessed enthusiasm like this for an incoming president. There's always a degree of giddiness on the part of those who supported the president-elect, whoever he is, but today's excitement borders on worship. It's an interesting contrast. Times are pretty tough. Our economy is struggling. Unemployment is exploding. Once iconic American manufacturers, to say nothing of banks, insurance companies, and securities firms, are lining up for federal handouts. The greatest terror-sponsoring nation on the face of the globe is about to acquire nuclear weapons. And yet people are thrilled with Obama and convinced that he can tackle these complex problems.
I hope he can. But honestly, the noises he is making so far and his proposal for a trillion dollars in new federal spending are scary. Admittedly and sadly, this isn't much of a departure from the Bush administration's death throes, when the president terrified of being tagged forever with the Hoover label reversed a lifetime of adherence to free market principles to bail out a conga line of supplicants. (The irony is rich because Hoover himself doubled federal spending during the Great Depression. He became a Hoover anyway.) For the record, it should be noted that this was President Bush's self-description ("I'm a free market guy"), not a dispassionate assessment of his administration's economic philosophy, which was hardly small government.
The Democrats are in the driver's seat now. And with the exception of a brief period in the 1990s after Ross Perot made everyone deficit conscious, Democrats are the party of government that is, the party of domestic spending. Every indicator of economic decline seems to them a green light to do what they would have done anyway party like it's 1933! It's not that they are buying votes. No, the times demand extreme measures.
But before the first mortgage defaulted, we were already on a fast train to fiscal insolvency. The problem of the aging baby boomers and the Social Security/Medicare obligations we've undertaken but cannot pay for has not gone away. It crouches just around the bend.
And if the Obama "stimulus" bill passes, our federal deficit will top $1.7 trillion next year! As Kevin Hassett of the American Enterprise Institute has observed, "If government spending provided such a wonderful boost to the economy, we would be in Nirvana already." Or, as a cartoonist rendered it, our economy is in a hole and the Obama solution is "shovel ready." The first rule of getting out of holes is to quit digging. So the spending, while cheering a variety of contractors, unions, "green" companies, mayors and governors in the blue regions of the country is very unlikely to affect the recession at all.
Meanwhile, that murderous debt just keeps piling up and piling up. How will we pay it back and maintain America's credit rating in the world? Raise taxes? In a recession? No school of economic thought favors that. Are we going the way of Argentina?
This is a country that has adamantly declined to face fiscal reality when it comes to entitlements. We want health care reform that expands coverage and reduces costs. We acquired mortgages on the hope that housing prices would rise forever.
It's no wonder that we want to spend/borrow our way out of a deep recession.
Obama will have a few weeks or months of maximum political influence. If ever there were a time to do the really hard things reduce spending, increase the retirement age, introduce real competition to the health care system, cut corporate tax rates, balance our books this is it. If Obama used his popularity to achieve those critical goals for our nation's future, he would deserve to be on all those T-shirts and coffee mugs. He might even be a candidate for Mount Rushmore. As it is, he and we are headed in the wrong direction.
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