Sen. John McCain accuses Sen. Barack Obama of being a “socialist,” but it is President George W. Bush, supported by Sen. McCain, who has done the most to socialize the U.S. economy. Courtesy of the Republican Party, the federal government is set to own a sizeable chunk of the housing, auto, banking and insurance industries, as well as pieces of individual companies lining up to sell securities to Washington. Even individual homes, with Uncle Sam preparing to become the mortgage guarantor of last resort, are the targets of nationalization.
What will be left for the next president to socialize?
The Republican Party once campaigned against irresponsible federal spending and government red ink. Then George W. Bush became president. With a Republican Congress, he turned a budget surplus into a half trillion dollar deficit, added trillions of dollars in unfunded liabilities with creation of the Medicare drug benefit, and expanded virtually every federal program, domestic as well as foreign.
How is this different from what the Democratic Party has been promising to do for years?
Only after the Democrats retook control of Congress did President Bush suddenly become concerned about fiscal responsibility. But that lasted only until the subprime mortgage crisis enveloped Washington. Taking its cue from Democratic tax and spend policies of the past, the administration then opened the Treasury doors to all comers.
So far, the Bush administration, Congress, and Federal Reserve have provided more than $2 trillion in bailouts. Congress got the ball rolling, with an assist from the administration, with a $300 billion bailout of the housing industry. The president even agreed to a multi-million dollar taxpayer pay-off to the left-wing activist group ACORN to grease the legislative wheels.
Then Treasury Secretary Henry Paulson abandoned his contrary assurances and nationalized Fannie Mae and Freddie Mac at a cost of $200 billion, though the price could go higher. Bailouts began sprouting like mushrooms after a heavy rain—$29 billion to cover Bear Stearns, hundreds of billions of dollars from the Federal Reserve to banks and investment banks, as well as to buy mortgage-backed securities, $85 billion to nationalize the big insurer AIG, followed by another $38 billion for AIG and $25 billion more in loans to the auto industry.