Short Memories, Bad Politics, Big Debt

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“We have
tried spending money. We are spending more than we have ever spent
before and it does not work…we have just as much unemployment
as when we started…and an enormous debt to boot!” It was
a decade of disaster and the man who spoke these words was Henry
Morgenthau, Jr., Franklin D. Roosevelt’s Secretary of the Treasury.
The date was May 9, 1939.

By then the
Roosevelt administration had been in office eight years and Morgenthau
was addressing his fellow Democrats on the House Ways and Means
Committee. In Congress and in the White House today our nation’s
leaders are repeating the same errors as their predecessors in the
midst of the Great Depression.

on the errors of the 1930s, Chris Edwards, Director of Tax Policy
at the Cato Institute, in September 2005 wrote, “Many people
think that we need a big government to prevent, or to reverse, recessions.
But the 1930s illustrate that activist policies increase, not decrease
economic instability.”

What could
be more activist than the year and a half that Barack Obama has
held the reins of power in Washington, D.C.? From the failed Stimulus
Act to the bailout/ownership of General Motors, to the forced imposition
of Medicare “reform,” to the financial “reform”
legislation, Obama has managed to plunge the nation into a level
of debt not seen since the end of World War II.

Before departing,
a Democratic controlled Congress just voted to send States $26 billion
MORE on top of previous bailouts. This isn’t governance. It’s

It is not capitalism,
nor is it a people capable of great productivity that is responsible
for the economic crisis in which Americans find themselves. It is
the government and, specifically, it is the growth of government
since the 1930s with “entitlement” programs that include
Social Security, Medicare, and endless other ways taxpayer money
is either wasted or doled out to essentially buy votes.

In January
2004 economist Robert J. Samuelson, a columnist for the Washington
Post, wrote that “immense tax increases would be needed”
to keep up with the spending mandated by entitlement programs at
a time when 77 million Baby Boomers were getting ready for retirement.
“If spending – on the elderly or everything else – isn’t
cut or taxes raised, deficits will spin out of control. What’s
astonishing is that the problem has been known for decades.”

Six years later
the warnings of countless economists have been ignored until they
could no longer be ignored. The financial crisis in 2008 should
have forced a confrontation with harsh realities, but it has not.

Almost comically,
a commentary by Jon Hilsenrath in the August 9 issue of The Wall
Street Journal was titled “Economy’s Quarterbacks
Get Out ‘Hail Mary’ Passes.” Citing the official
July jobs report which still clings to the lie that unemployment
is only 9.5 percent when it is clearly closer to 20%, Hilsenrath
reviewed the suggestions being made by various supposed experts,
noting that “new spending would spark an outcry in the face
of trillion-dollar budget deficits and no plan in place to reduce
them.” Well, duh!

Few Americans
paying any attention know that government spending must be drastically
reduced at the federal and state levels. Others know that Fannie
Mae and Freddie Mac, together asking Congress for a billion more
of taxpayer and borrowed funds, must be phased out of existence
even though they own more than fifty percent of all current mortgages.
Loaning mortgage money should be a private banking, not a government

The government
should not be in the mortgage business. It should not own automobile
manufacturers. It should not control health care, a sixth of the
nation’s economy. That’s communism, not capitalism.

Despite earlier
calls to raise taxes, the notion of allowing the Bush tax cuts to
expire is madness at a time when ensuring that Americans can hold
onto as much of their own money for both savings and spending is
vital to get us out of the present recession.

We need tax
holidays, not tax increases. The lessons from the Great Depression
are being ignored.

In “A
Rather Angry America,” commentator Victor Davis Henson, wrote
“We see the arrested adolescence and hypocrisy that come from
that sermonizing generation (those who came into adulthood in the
1970s) whether in Al Franken’s puerile face-making, the ideologically
driven suicide at Newsweek, the steady destruction of the New
York Times, John Kerry’s tax-avoiding yacht, the Great
Gatsby Clinton wedding, Michelle on the Costa del Sol, Nancy Pelosi’s
jet, Tim Geithner’s tax skipping, or the constant race-card
playing of Charles Rangel and Maxine Waters.”

America is
sorely in need of grown-ups to oversee its fiscal affairs and they
are sorely missing in the present Congress and in the White House.
This brings us to the November midterm elections, the last chance
to rid the nation of the party that trashed the economy in the 1930s
and the people who are presently destroying it again.

The U.S. Constitution
was written to ensure a small federal government with specific limits
on the tendency of all governments to stifle free speech and plunder
the treasury to advance tyranny.

Hard choices
lay ahead for Americans and only proven conservative measures will
save the nation from a decline about which a mountain of words have
been written, spoken, forgotten, or ignored.

14, 2010

Caruba founded The National Anxiety Center in 1990 where this series
is posted. An author, business and science writer, he blogs daily

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