"It`s time to stop worrying about the deficit—and start panicking about the debt," the Washington Post editorial began. "The fiscal situation was serious before the recession. It is now dire."
The editorial continued:
"In the space of a single fiscal year, 2009, the debt soared from 41 percent of the gross domestic product to 53 percent. This sum, which does not include what the government has borrowed from its own trust funds, is on track to rise to a crushing 85 percent of the economy by 2018." [The coming debt panic, December 14, 2009]
What are the risks of an exploding U.S. public debt?
The Chinese, Japanese and Arabs still buying that debt will begin to suspect they are holding onto paper on which the United States will default, or will cheapen by inflating its currency—as the Germans did in 1923 to avoid paying war reparations.
When they do, they will stop buying U.S. debt and start dumping. The Fed will then have to raise interest rates to attract borrowers, throwing the economy into a tailspin.
Is Congress even aware of what is happening?
Harry Reid is talking about doubling Medicare rolls to include folks 55 to 64. Facing a second straight $1.4 trillion deficit, Congress is moving to raise the debt ceiling by another $1.8 trillion.
And the lead story in the Post Monday began:
"The Senate cleared for President Obama`s signature on Sunday a $447 billion omnibus spending bill that contains thousands of earmarks and double-digit increases for several Cabinet agencies." [Democrats clear spending bill in Senate, December 14, 2009 ]
Total cost of the Senate bill passed Sunday was "$1.1 trillion, including average spending increases of 10 percent for dozens of federal agencies."
Ten percent hikes for federal agencies? What is going on?
Sen. Dick Durbin says the spending is necessary "to keep cops on the street ... so that families feel secure. ... Money spent to help our first responders, firefighters and policemen is a critical investment."
But aren`t cops and firemen a state and local responsibility?
"It is business as usual, spending money like a drunken sailor, " said Sen. John McCain. "And the bar is still open."
But when sailors get drunk and spend crazily, they are on shore leave and spending their own money. When they get back aboard ship, they sober up and shape up, and do the vital work they enlisted to do.
These congressmen never stop bingeing. They are addicts. They are alcoholics. And they are spending our money. According to Taxpayers for Common Sense, there are 5,200 earmarks in that one Senate bill, which averages out to 12 pork projects for every House member—and 52 for every senator.
What is going on in Washington?
Democrats are following the Rahm Rule of White House Chief of Staff Rahm Emmanuel. "Don`t allow a crisis to go to waste. ... There are opportunities to do big things."
The Party of Government is exploiting the economic crisis to grow the government. And from the standpoint of self interest, this makes sense. Most government employees are Democratic voters, as are most beneficiaries of government programs.
Moreover, Democrats have to get the money out the door before the midterms, where the party is going to take a bath and lose power.
How else to explain this lead story last week in USA Today:
"The number of federal workers earning six-figure salaries has exploded during the recession. ...
"Federal employees making salaries of $100,000 or more jumped from 14 percent to 19 percent of civil servants during the recession`s first 18 months—and that is before overtime pay and bonuses are counted.
"Federal workers are enjoying an extraordinary boom time—in pay and hiring—during a recession that has cost 7.3 million jobs in the private sector."
When the recession started, the Defense Department had 1,868 civilian employees earning $150,000. Defense now has 10,100. The Transportation Department had one person earning $170,000 when the recession began. Transportation now has 1,690 employees earning above $170,000. Recession in America means boom times in D.C.
The financial crisis that almost sank the capitalist system was the work of Washington and Wall Street. The Fed created the bubble. The White House and Congress goaded banks into making all those subprime mortgages. Fannie and Freddie bought up the lousy paper and turned it into securities. Wall Street banks bought them up and put them on their books as Triple A assets. Federal regulators looked the other way.
Yet happy days are here again on Wall Street. And Washington never saw better times, with federal workers now earning, on average, $31,000 a year more than workers in the gutted private sector.
Is this the government the Founding Fathers dreamed of—or is this the kind of arrogant government they took up arms against?
COPYRIGHT CREATORS SYNDICATE, INC.
Patrick J. Buchanan needs 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 is Churchill, Hitler, and "The Unnecessary War": How Britain Lost Its Empire and the West Lost the World, reviewed here by Paul Craig Roberts.