Spokane7
55°
July 6, 2009 in Opinion
Jonah Goldberg: Crisis ‘management’ only making it worse
There’s an old joke about a fantastic three-legged pig and a farmer. It comes in many versions. In some tellings, the pig saves the farmer’s life. In another, it can talk. The punch line always comes after a visitor asks, “So how come he only has three legs?”
“Because,” the farmer explains, “you don’t want to eat a pig like that all at once.”
More and more, it seems the Obama administration has just that attitude toward the economic crisis: doling out pork for as long as possible.
Recall the White House mantra of “never let a crisis go to waste.” Though the economic implosion had specific causes stemming from the financial and housing markets and how they were regulated, President Barack Obama insisted that the items on his campaign wish list – overhauling health care, imposing carbon cap-and-trade and reforming education – would be the real solutions to the crisis.
As a result, we’re now stuck with some of the most absurdly counterproductive legislation imaginable. The national debt is growing faster than the GDP. According to the Congressional Budget Office, within 10 years Uncle Sam’s publicly held debt will double to 82 percent of GDP. The CBO predicts that by 2038, our debt will be 200 percent of GDP.
Meanwhile, thanks to ongoing trade deficits and relentless borrowing, America’s financial status is deteriorating rapidly. The Commerce Department reported recently that the value of foreign assets owned by Americans is $19.89 trillion, while the value of American assets owned by foreigners is $23.36 trillion. In other words, we are a “net debtor” to the tune of $3.47 trillion. That represents a 62 percent increase over 2007. Foreigners, most significantly China, own nearly 50 percent of our government’s public debt.
So while the Obama administration frets over the largely phony idea that we are dangerously dependent on foreign oil, we are increasingly threatened by dependence on foreign bondholders who could wreak havoc on the dollar and our interest rates far more easily than OPEC could cut off our oil.
And what are we doing in response? For starters, the House passed carbon cap-and-trade legislation that essentially adds an onerous and inefficient energy tax on everyone, outsources jobs to carbon-profligate India and China, and raises tariffs in an attempt to stem the inevitable bleeding of jobs and manufacturing. Rather than have America invest in new oil and gas jobs (among the highest-paying of any industry), House Speaker Nancy Pelosi insists that one-time gigs weatherizing Granny’s attic and replacing light bulbs are preferable.
Worse, even if you think climate change is a huge threat, the bill’s own supporters admit its impact on global warming will be trivial. But, we’re told, we must lead by example. Of course, we’ve led by example in refusing to exploit our oil reserves for three decades, and so far no one has followed us.
Then there’s health care “reform,” aspects of which the administration insists will save money. But according to the CBO, the whole thing will cost $1 trillion to $1.6 trillion. The savings will allegedly come from government-imposed efficiency – which approaches “jumbo shrimp” as an oxymoron. It’s funny how nobody has been talking up Medicare as a source of huge savings, and yet that’s the model: Medicare for everyone.
In fairness, the Obama administration did tackle the financial crisis more directly. It passed a $787 billion stimulus bill that hasn’t prevented unemployment from soaring (in January, when the stimulus was on the table, the administration estimated joblessness would peak at just above 8 percent; it’s now 9.4 percent and rising). Maybe that’s because the bulk of the stimulus wasn’t meant to kick in until 2010 and beyond – after the administration’s predicted robust economic growth began. Or maybe it’s because much of it was intended to pay for a pent-up wish list of Democratic projects.
Now Obama is publicly mulling the possibility of a “second stimulus” that would in fact be the third stimulus (let’s not forget President George W. Bush’s $168 billion “booster shot for our economy”), paid for with money we don’t have or with tax hikes we don’t need. But, hey, anything’s worth it to savor the pig for as long as possible.
Jonah Goldberg is editor-at-large for National Review. He can be reached at JonahsColumn@aol.com.
Don’t fudge fish standard 
1960 on July 06 at 6:52 a.m.
That was a highly cynical editorial if i ever read one. This country faces many challenges that have been in the works for decades not just months or a year and a half. My thoughts are of lets have some patience and work for our future.
Ninch on July 06 at 8:21 a.m.
Apparently Ed F is not familiar with Jonah Goldberg’s highly entertaining political satire (or the 3-legged pig story), which I totally enjoy… and this time Jonah hit the nail on the head.
For example, Obama uses foreign oil and OPEC as the evil specter of foreign dependence on nations led by evil dictators, but few question his “crisis” talk. FACT: The three top exporters of oil to the U.S. are Canada, Mexico, and Saudi Arabia. Only one of these nations is a “dictatorship” and Obama submissively bowed to their leader (Remember that?)
Yet, Obama ignores the ever increasing federal debt owned by the Chinese government and other foreign entitites to which he and his Democratic Congress have already significantly contributed with more “in the works.” Jonah’s article may sound cynical, but what makes it seem so are the authentic estimates of America’s future economic woes. Again these estimates are based on the Obama Plan and has NOTHING to do with previous administrations.
Finally, few realize that “surplus” Social Security funds are used to purchase Treasury Bonds, and it is T-bonds that finance the federal debt. As Baby-Boomers retire there is reduced surplus and thus less ability to help finance our federal debt. (At the nexus of retirement, social security funds will not be able to purchase any T-bonds, yet only Hillary Clinton addressed this concern during the campaign.) Without surplus social security funds, other investors will have to take up the slack on T-bond financing, ergo the conundrum. Our national debt increases requiring more investors (mostly foreign) for T-bonds alongside the capacity for a significant investor (surplus social security funds) being substantially reduced. Maybe Treasury Secretary Tim Geithner can “fudge” his income, blame TurboTax, and get away with it…. but no way can Geithner and Obama avoid responsibility for ignoring the 800# gorilla in the fiscal room of our nation’s economy.