Posted by
Bert Chapman on Tuesday, July 26, 2011 9:29:53 PM
We are just a week away from Obama's self-declared debt default deadline. After two years in the White House, the apostle of "change you can believe in" has become the self-serving Washington insider and apostle of the fiscal status quo he claimed was causing our national economic problems. Despite having large majorities in both houses during the first two years of his presidency, the Barackster was unable to pass a single budget his administration introduced. Consequently, he has relied on a series of continuing resolutions, produced a inept Keynesian stimulus passage, introduced and passed an unconstitutional and unaffordable health care program, managed to increase unemployment from 7.3 to 9.2%, and has increased the size of our national debt at a faster rate than all of his predecessors. His administrative partners in crime, including Treasury Secretary Tim Boy Geithner, have failed to advance anything resembling a serious long-term plan to reduce our national debt. Consequently, it has been up to congressional Republicans to advance serious plans like "cut, cap, and balance" to restore fiscal solvency to our country.
Unfortunately, despite controlling the House and getting this legislation through the House, it went down to a debate free party line vote in the Senate. This chamber is still controlled by the Democrats whose leader Harry Reid's knowledge of substantive economic policy is limited to what his Las Vegas gambling cronies and financial benefactors whisper to him in drunken moments by the craps table. Obama's response to our likely credit rating downturn and potential default is not to show leadership but revert to the retromingent Democratic practice of class warfare including tax increases. Anyone with even a miniscule knowledge of economic history knows that tax increases are the last thing a fragile economy needs if it wants to grow and create jobs.
The tax system does need to be streamlined and made flatter and some loopholes could be eliminated and generate additional revenue without causing economic hardship. However, tough spending cuts will need to be made including to entitlement programs such as Social Security and Medicare and even to some defense programs. Most Democrats are naturally loath to trim entitlement programs because their political power base depends on increasing public dependency on government programs. Some Republicans, unfortunately, fail to realize that the government needs money to operate critical programs and that a certain amount of taxes are required to properly fund these programs. Even though I consider myself an uberhawk on defense issues, there can be a bromance element to conservative support for the military that fails to recognize there is significant waste in areas of defense spending such as health care costs, procurement, and research and development.
There will be significant consequences if we default on our debts but, hopefully, enough sane members of both parties in Congress will be able to persuade the Administration to stop the debt hemorhaging and begin the painfully long-term but essential process of paying down and eliminating our debt. Australia was actually able to do this during the conservative coalition government lead by Prime Minister John Howard and Treasurer Peter Costello between 1996-2007 and we should look to them for inspiration.
The vast majority of individual Americans and their families have no choice but to live within our means. We can't pass "continuing resolutions" or increase our personal debt ad nauseum. We have to deal with creditors, foreclosures, bankruptcies, lowered credit ratings, and other unpleasant consequences of fiscal profligacy. I know there would be serious societal economic consequences, and even international economic consequences, if we were to default on our debts, but now is the time to make a stand and stop the continuing and spiraling growth of our national debt and budget deficit. We cannot let ourselves become subject to economic blackmail by hostile creditors like China or enslave future generations. Now is the time to draw the line in the sand. Sadly, we have a President who's more interested in engaging in infantile class warfare than showing truly courageous and transformational leadership which could earn him a positive place in history. Barack Obama is now proceeding toward a historical presidential verdict that will begin with "The first President to lead the United States to defaulting on its national debt and having its international credit rating downgraded." That would rank with impeachment as being the most damning verdict on presidential performance.