“[T]rying to dig out of this recession by adding a lot of new permanent programs, or by expanding existing programs, will only accelerate this fiscal tsunami… This does not mean the government cannot spend — it is fairly obvious that serious deficit spending is needed immediately.”—Senator Judd Gregg (R-NH), “How to Make Sure the Stimulus Works,” The Wall Street Journal, January 5th, 2009.
Will anyone in Congress stand in the way of the bailout mania?
If Senator Judd Gregg’s recent commentary in the Wall Street Journal is any indication, it appears that not only has Keynesian economics—the economics of stimulus through deficit spending and “pump priming”—experienced a resurgence in 2008, but that it will be the order of the day for some time to come.
By ceding even an inch in the upcoming Congressional session, Senate Republicans will give up leagues. “Going along to get along” will only hasten the nation’s descent into financial ruin. If conservatives are unwilling to take a principled stand against the maddening explosion of the national debt—even a stand that fails in the near term—the American people will once again be devoid of opposition to the unprecedented growth of Big Government in response to a crisis it helped create.
Mr. Gregg apparently believes that Republicans cannot win a debate against excessive deficit spending during an economic downturn and so is trying to water down President-elect Obama’s $1 trillion economic “stimulus” package. Or he actually thinks that said “stimulus” is necessary.
Either way, he is unnecessarily ceding ground in a debate where being wishy-washy will only result in the American people wishing they had washed their hands of tepid Republicans all the sooner.
Barring a miracle resurrection of the Blue Dog Democrats in the House, the credible threat of filibuster in the Senate is the only way Republicans will achieve any meaningful concessions in the coming session. To be fair, this is what his piece appears aimed at doing—for example he writes that if there must be infrastructure projects, make sure they are necessary projects, or that “when compiling the initiatives that drive this stimulus package, the priority should be on one-time items do not create recurring out-year costs such as expanding social welfare programs”.
But Republicans are not going to win any debate by saying, “Your deficit-spending stimulus is not the right one. Ours is better.” Simply put, they will not effectively argue against the Obama administration’s $1 trillion deficit-spending plan by advocating for it.
As radio host Mark Levin notes nightly, government spending is never reduced. In good times or bad, politicians always have an excuse to deficit-spend. Under those circumstances, the debt will never be eliminated.
By ceding the very principle over which the debate on “stimulus” will turn, Republicans miss an opportunity to argue against expanding the national debt yet more in 2009. And if Republicans cannot argue against debt expansion after the monumental debt explosion of 2008 (the debt ceiling now tops $11 trillion), they may well have consigned themselves to the scrapheap of political history.
Conservatives will have an opportunity—a slim one—with the incoming session to take a stand against the bailout mania that has engulfed Washington. How can yet more deficit spending even be considered by lawmakers when taken together the financial obligations created by the federal government in 2008 have topped $8 trillion?
How can the U.S. dollar regain its strength if government borrows and prints yet more Monopoly money with hasty abandon? What are the real implications tomorrow of today’s “stimulus”? Many analysts are projecting that the excessive expansion of the monetary base will eventually result in inflation. Are any lawmakers at all concerned by these projections?
These questions must be answered. And yet they are not.
National debt and excessive money creation is not just money that piles up without consequence. For every action, there is a reaction. And moves made by the government in 2008—and now, apparently, 2009—will have profound economic consequences for decades to come.
With the recent confirmation of Al Franken as Minnesota’s next Senator, Republicans cannot afford a single defection on any issue of importance to their caucus. And on the issue of deficit-spending—their Achilles heel when it comes to their credibility with the American electorate—there may not be a more vital time for them to take a stand than in the coming session.
Republicans do not need to be more like Democrats in order to get along. They can offer amendments that call for making the Bush tax cuts permanent. That strengthen the dollar by eliminating the dual mandate at the Federal Reserve. That once and for all privatize the mortgage industry. And that reduce the national debt. If their colleagues across the isle do not wish to consider those proposals, they can vote Nay.
Conservatives should be demanding that every penny of the national debt—and any other financial obligations the federal government has taken upon itself including the expansion of FDIC insurance—be accounted for, and construct a plan that obligates reducing and eventually eliminating that debt.
When conservatives cede that debt expansion is acceptable at a time when the financial obligations of the nation are exceeding what the nation is ever capable of paying back, it is clear that not only has the economics of Keynes experienced a resurgence, but that conservative proposals may well be dead on arrival through the coming session. The key for the GOP—if it is to regain any credibility with the American people—is to utilize every Senate rule (however obscure) to make certain the excessive stimulants are equally as moribund.
Robert Romano is the Editor of ALG News Bureau.
