Deal W. Hudson
Published July 5, 2010
The phrase “Après moi, le déluge” is attributed to Louis XV on his deathbed. Fifteen years later, in 1789, the French Revolution confirmed his prediction: “After me, the flood.” Whether the king felt a sense of foreboding of things to come or simple indifference, the expression seems an apt description of where our nation stands on its 234th birthday.
Princeton’s Nobel Prize-winning economist Paul Krugman set off a lively debate with his New York Times op-ed from June 29, observing we are in the “early stages of a third depression.” Conservative commentators like Larry Kudlow and Steve Forbes were quick to respond that Krugman’s solution of more federal spending, rather than less, was at the heart of the economic downturn.
As Forbes put it, “Well, it’s like the old physician who continues to bleed the patient and wonder why the patient isn’t getting better and then bleeds the patient even more.”
The spiraling national debt has become such a prominent national issue that Gallupnow reports that 30 percent of Americans identify themselves as Tea Party supporters, while 28 percent oppose it. Thirty-five percent of those polled remain neutral, but that number will go down as the ramifications of national debt and the creation of the health-care entitlement hit home.
On June 1, the national debt went past the $13 trillion mark for the first time. In the first 15 months since President Barack Obama took office, the debt increased $2.4 trillion. During the eight years of the Bush presidency, the deficit increased $4.9 trillion. Yet when President Obama addresses the issue of the deficit, he continues to blame his predecessor.
National unemployment continues to rise, with 15 million out of work and another 8.8 million unable to find jobs. Writing for FoxNews.com, Liz Peek rightly calls this situation “a horror.” Peek’s argument, aimed at Krugman’s suggestion of more spending, is that we have reached the “Debt/Stimulus/Confidence Frontier”:
The concept is simple: while deficit spending is sometimes necessary in the early stages of a recession to jolt the economy and especially to provide the consumer with some extra buying power, there comes a point at which increased indebtedness has a negative effect – on confidence, and then on GDP.
The more the public becomes aware of the increasing deficit, the lower goes consumer confidence, which dipped sharply and unexpectedly by ten points to 52.9 in May. Liberals never seem to take into account human nature, Peek notes. People will start compensating for what they perceive an overspending government: “The liberal notion of all-purpose government sustenance is irreconcilable with the very human instinct of self-protection.”
Even Mort Zuckerman, editor in chief of U.S. News & World Report, warns that both political parties are avoiding the central issue and have
failed to explain how we are going to address our future debt and accept the limits of what the federal government can do. If they fail, we will be saddling the young with huge debts and immense taxes, and the American ethic of believing in a better future for our children will be in jeopardy.
For example, because of an aging population, Zuckerman warns that taxes will have to double if the country is to continue our current level of Social Security and Medicare payments to men and women over the age of 65.
With that challenge lying ahead, the Congress and the president passed a health-care package with the promise it would reduce the deficit. The financial reality, as doggedly explained by Catholic congressman Paul Ryan (R-WI) and confirmed by the Congressional Budget Office, is that the new health-care bill increases the deficit by $260 billion in the first ten years and $600 billion in the second decade.
The next big agenda item for the Obama administration was to be immigration reform, a piece of legislation strongly urged by the United States Conference of Catholic Bishops. However, recent signals suggest an immigration bill is at least a year away. It’s not known whether or not the delay has to do with its price tag,estimated at $30 billion and adding another $15 billion to the deficit. That cost could run double if health-care expenses for the 11 million undocumented immigrants are included in the legislation.
Growing awareness of the national debt load is already driving down consumer confidence and leading many into the Tea Party movement. Average people are getting the sense of foreboding, that something bad is waiting for them in the future – in short, they are losing hope. It’s past time for our elected representatives, starting with the president, to realize the limits of government, or to put it bluntly, the limits on spending.