Obama-Bush Making U.S. A Socialist Republic
Barack Obama and George W. Bush
seem to have come away from their study of the Great
Depression with similar conclusions:
To wit: After the Crash of 1929,
the Federal Reserve did not move fast enough to save the
inject cash into the economy. Second, the New Deal,
far from being wastrel deficit spending, was not bold
enough. So it was that America wallowed in depression
for a decade until the unbridled spending and mammoth
deficits of World War II pulled us out.
Bush and Obama seem determined not
to make the same mistake.
We are all Keynesians now.
Thus, we have the $700 billion Bush
bank bailout, the $700 billion
package" Obama wants by inauguration to
economy back into shape" and the $800 billion fund
Paulson created to get consumers borrowing and
These come on top of Bush $455
billion deficit, the $29 billion bailout of Bear
Stearns, the $105 billion in pork to grease the $700
billion bailout, the $100 billion to $200 billion to
keep Fannie and Freddie afloat, the
$140-billion-and-counting for AIG, the $25 billion for
the greening of GM, Ford and Chrysler, the $25 billion
more to save the Big Three and the $20 billion for
Now much of this overlaps, and some
will be retrieved. But we are still staring at a deficit
that could approach $2 trillion.
How would this stack up
A deficit of $1.4 trillion would be
10 percent of gross domestic product, dwarfing the
postwar record 6 percent run by Ronald Reagan in the
Jimmy Carter recession.
has been a staple of Democratic oratory. This will stop.
But the politics of this is not the point, the policy
Consider what we are about to do.
Bush in 2008 spent 21 percent of GDP. States, counties
and cities spent another 12 percent. Thus, one third of
GDP is spent by government at all levels. Obama and Co.
propose to raise that by another 10 percent of GDP. We
may soon be north of 40 percent of gross domestic
product controlled and spent by government.
That is Eurosocialism.
And where, exactly, are we going to
get the money?
Americans save nothing. We spend
more than we earn. Thus the levels of consumer debt,
credit card debt, auto debt and mortgage debt. U.S.
foreign-exchange reserves amount to a piddling $73
The only nation with the kind of
cash on hand we need now—if we don`t print the money and
invite another gigantic bubble—is China, with its $2
trillion in foreign-exchange reserves.
Will Beijing lend back the dollars
it has piled up by selling to us?
China certainly has an incentive to keep Americans
spending. For our purchases of Chinese-made goods have
often been responsible for 100 percent of
growth. China does not want to kill the American
goose that lays those golden eggs—until the goose can`t
lay any more eggs. Then they won`t need the goose.
But should China decide to lend us
the money, what will Beijing demand in interest rates
and assurances that we will not default. After all, the
U.S. debt is 70 percent of GDP, our savings rate is near
zero, and our merchandise trade deficit is still running
at 5 percent to 6 percent of GDP.
Unlike the 1950s, we are today
dependent on foreigners for two-thirds of our oil and
for much of our manufactured goods—toys, TVs, radios,
cameras, cars, shoes, clothes, bikes, motorcycles—and
for the $700 billion to $800 billion we borrow each year
to pay for these imports.
With U.S. homeowners, consumers,
companies and banks now going bust, why must the nation
borrow trillions more to bail them out? So we can
maintain our status and standard of living as the last
Bush and Obama are competing to
shovel out trillions of dollars, so we can return to the
good times of yesterday.
But wasn`t yesterday the root cause
of today? Didn`t saving nothing and spending more than
we earn, purchasing what we cannot afford in cars,
consumer goods and houses, buying far more from abroad
than we sell abroad—didn`t that cause this crisis and
A family man in America`s
condition, awash in debt, spending more than he makes,
would cut back consumption, find a second job and get
out of debt. Or declare bankruptcy, accept the shame and
humiliation, change his wastrel ways and start anew.
Is it different for a nation?
Yet we seem to believe we can
borrow and spend our way out of a swamp of unpayable
debt into which borrowing and spending have plunged us.
We are headed either for default on
our debts and bankruptcy as a nation, or something less
honorable: a quiet cheapening of the debts we have
incurred by inflating and destroying the dollar, robbing
our creditors of what we owe them and robbing our own
people of the value of what they have earned. And so it
has come to this.
What would the
Founding Fathers think of us now?
CREATORS SYNDICATE, INC.
Patrick J. Buchanan
no introduction to VDARE.COM readers;
his book State of Emergency: The Third World Invasion and Conquest of America, can be ordered from Amazon.com. His latest book
Hitler, and "The Unnecessary War": How Britain Lost Its
Empire and the West Lost the World,
Paul Craig Roberts.