The Most Fiscally Irresponsible Government in U.S. History

The Most Fiscally Irresponsible Government in U.S. History
Current federal budget trends are capable of destroying this country
By MORTIMER B. ZUCKERMAN
Posted: August 26, 2010

There is an instinctive conclusion among the American public that President Obama's stimulus package has failed to create a sustained recovery. Unemployment has increased, not declined; consumers have retrenched; housing starts have crashed along with mortgage applications; and there is a fear that a double-dip recession may very well be in the pipeline. The public perception, reflected in Pew Research/National Journal polls, is that the measures to combat the Great Recession have mostly helped large banks and financial institutions, and that's a view common to Republicans (75 percent) and Democrats (73 percent). Only one third of either political leaning thinks government policies have done a great deal or a fair amount for the poor.

There is another instinctive conclusion among the American people. It is that the national deficit, and the debts we have accumulated, are of critical political importance. On the national debt, the money the government has spent without the tax revenues to pay for it has produced mind-numbing numbers so large as to be disconnected from reality. Zeros from here to infinity. The sums are hard to describe; it is hard to describe an elephant, but you know one when you see one. The public knows that, shuffle the numbers as you may, the level of debt is unsustainable.

Who could be surprised since millions of voters have discovered that for themselves? As one realizes the morning after the night before, there is an unavoidable penalty for excess. It is unnerving to wake up and learn that you have a mortgage on your home that exceeds the value of the property. Or, and too often both, you have a credit card line that you cannot repay and the issuer has you on the rack for ever bigger compound interest on the debt. The lesson has been well and truly learned that debt catches up with you. Millions understand that they are just going to have to find a way to live within their means—and then still eke out some savings to pay down debt. And there are well over 14 million Americans without a paying job, so the level of discontent is very high. Just how are they going to regain control of their lives?

In a usnews.com post on July 26, Jodie Allen of the Pew Research Center reported that in recent weeks more academic and market economists have been urging the government to defer budget cuts and tax increases and instead provide additional stimulus to a still-fragile economy, some by continuing the Bush tax cuts. But among the public there has been a suggestive shift of opinion the other way, reflecting worries about debt. "Deficit and government spending" has jumped from 10th or 11th place as a priority for the federal government to one that is second only to job creation and economic growth. The drift of opinion is manifest in other recent polls. For instance, a CBS poll conducted July 9-12 assessed the most important problem facing the country as the economy and jobs (38 percent), with concern about the budget deficit and national debt way down at 5 percent. Yet CNN (July 16-21) has 47 percent preoccupied first with the economy, and 13 percent with the federal deficit. In a recent Time magazine poll, two thirds of the respondents say they oppose a second government stimulus program and more than half say the country would have been better off without the first one.

People see the stimulus, fashioned and passed by Congress in such a hurry, as a metaphor for wasted money. They are highly critical about the lack of discipline among our political leaders. The question that naturally arises is how to forestall a long-term economic decline.

The Fed has lowered rates dramatically to keep the economy ticking and maybe continue the painfully slow recovery, but at the receiving end there is no feeling of relief at all. People know that the stimulus is about to stop stimulating. They know that money is petering out. They know that states are preparing to cut $200 billion to balance their budgets. They realize that the Great Recession has wiped out huge amounts of wealth and that, unlike other recessions, this will not be followed by the kind of economic boom when people who had sat on their money during the lean years unleash pent-up demand for all sorts of goods and services.

There is no sign of that happening this time around. Households and businesses have kept their hands in their pockets. And so while many think that the only way to revive the economy and to inject more money into it is through governmental spending, the general feeling is that we can't afford that right now. The government will be writing more IOUs on top of those we already can't afford. Why plan a second stimulus if the first stimulus couldn't prevent high unemployment?...

more reading at:

http://politics.usnews.com/opinion/...y-irresponsible-government-in-us-history.html

 

Excellent essay. Some thoughts:

1) Everything nowadays is measured in the trillions, so let's not allow an "inifinitude" of zeroes behind our debt scare us, 'cause there is a similar number of zeroes behind our production. It's the ratio we have to keep in mind.

2) The first stimulus did prevent high unemployment, it would have been higher, much higher if no sales, not even "phony" sales generated by government (future generations) had been made, ie. if everyone had abandoned the market. But as the article noted, the stimulus bucks have stopped largely in the hands of the wealthy. It's refreshing to see that public is aware of that.

3) I believe we will in fact get through this, and we will come out ahead of competing nations. The rich always fare better, on average, in any crisis, and this one is no different. No one else has the military tonnage and reach to bring cheap raw materials to their factories than we do, and few have the very productive workforce we do, making high value added goods for sale abroad. And that's key, we're a country with a growing number of "nonsumers", so we're going to have to generate sales abroad.

4) Of course, "very productive" is a two-edged sword. It creates leverage that punishes the labor force to a multiplicative degree in an environment of falling sales. This is where Marx comes in.

 

PARTY TREND HAS YET TO KICK IN
By Dick Morris And Eileen McGann

Don’t confuse the dramatic swell of the Republican tide that is becoming increasingly evident to the pundits of the country with party trend. Right before Election Day, the numbers will get even better and presage an even larger Republican victory.

Party trend usually indicates itself in the ten days before an election when voters who do not typically follow politics closely tune in and decide for whom to vote. Until this window, they usually describe themselves to pollsters as “undecided.” There will be a huge Republican party trend this year, but it hasn’t happened yet.

The huge Republican poll numbers these days do not reflect the last minute switches typical of less involved voters but rather mirror the disappointment with Obama and with Congress among voters who do follow politics closely that has accumulated over the past year and a half. It is this reappraisal of their political opinions that is occasioning the big swing toward Republicans in the 2010 election.

The ranks of these disaffected voters who are now turning against Obama and the Democrats will soon be joined by the less involved voters who will come around in the week or ten days before the election.

From the perception of the pollster, party trend is a bit like a curveball thrown by a pitcher to a batter. The election statistics remain fairly static for weeks or even months with little change as the race unfolds through September and early through mid October. Like a fastball that comes in straight and true.

Then, suddenly, as the election nears, the vote swings wildly to one side or the other, akin to a curve ball that breaks as it approaches the batter – usually too late for him to make an adjustment. Suddenly, the tied races show up as decisive victories for the side that benefits from party trend. And the unwinnable races come into play.

2010 is a year like no other in the magnitude of the partisan shift going on. It dwarfs 1994 and even 1974 in its order of magnitude. But we haven’t yet seen the full impact of the last minute party shift that will take place. Plenty of voters who are now undecided are yet to be heard from and, when they are, they will impact the results decisively.

In which direction? Most likely they will transform a massive Republican win into an even more massive victory. The uninvolved voters who will decide late in the process are likely to break the same way the rest of the country is breaking – toward the Republicans. Surveys suggest that they share the disenchantment of the participating voters with the economy and Obama’s performance. They have just not focused on the coming election.

Democrats hope that the less involved voters are also less educated and more likely to be the young or minority voters on whom their party depends. But the lack of enthusiasm among Democrats for Obama indicates that these voters are likely to decide by staying home. In the most recent Fox News/Opinion Dynamics study, 54% of Republicans said they were “very enthusiastic” about voting in the 2010 elections while only 28% of Democrats felt the same way.

So the net result is that for those who anticipate a major Republican win in 2010, you ain’t seen nothin’ yet!