Let’s Fix Spending First
This nation has a multitude of problems. Chief among them is spending. As much as the incoming government wants you to believe (and the old government seemed to believe) that government spending can revitalize an economy, we have to recognize the truth. Government is a non-productive entity that relies on taxation of the productive segment of society in order to fund its operations. That's not to suggest that there is no need for government, but government lives under the same realities as you and me, and it cannot wish that away through coercive action. If the government spends more than it takes in, then it runs at a deficit, and the only way to handle that shortfall is for the government to (a) borrow money or (b) print money. If the government borrows money it must pay interest, and if it continues to run at a deficit for many years then it continues to accrue more and more ever compounding interest. If, on the other hand, the government prints more money, then it subtly "taxes" individual savings by increasing the money supply, thereby deflating the value of savings, and in turn decreasing the number and quality of things people can buy. Either way results in disaster. And yet, President-Elect Obama warns us that more of this profligate deficit spending is on its way:
Obama said Tuesday the deficit appears on track to hit $1 trillion soon. Speaking to reporters after meeting with top economic aides, Obama said: "Potentially we've got trillion-dollar deficits for years to come, even with the economic recovery that we are working on."
Of course, I recognize that the government may need to run a deficit in certain situations, but not in some naive effort to artificially raise the demand of products. What would you do if your family spent more money than it took in? You might get a higher paying job, or you might reduce spending. Let's say jobs are hard to come by, like in the current economic atmosphere. Your only option is to reduce spending. This isn't unreasonable; many people have cut back in much harder times than today. Maybe you can live without dining out, or without cable TV, or without a second car. But don't expect the government to do anything that remotely relates to reality.
Instead, we get a call for massive public works projects to the tune of $775 billion dollars. Now I know that President-Elect Obama has proposed to include some vague tax cut with his public works projects, but even so, this is not enough to salvage this rotten apple. Frankly, tax cuts cannot always solve economic problems, and just because liberals throw in some token tax cut, conservatives should not fall in love with a plan that will do little to solve the country's economic problems. In the real world, companies spend money on research and infrastructure when they have extra cash on hand, so that the company might prepare for the future. But our government thinks that in times of vanishing capital we ought to sink more phantom capital into things like electronic health records and water projects. Neither of those things will lead to a radical improvement in productivity that will overcome the costs of deficit spending and replace the capital that vanished from the sub-prime mortgage debacle.
Instead, why don't we go with a radical idea: constitutional government. Restraint of federal spending. Elimination of unconstitutional federal involvment in the economy. We can't continue on the path of spending beyond our means to fix the problem of spending beyond our means.
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