Nothing to Fear but Fear Itself?

Brett Joshpe

2/12/2009 12:08:52 PM - Brett Joshpe

Remember those quaint days of yesteryear when we, as Americans, were only concerned about terrorists flying planes into our buildings? Politicians used to run for office on the platform of stopping mass-murdering Islamo-facists from acquiring weapons of mass destruction, and the other side of the political aisle would accuse them of fear mongering. One former vice-presidential nominee and presidential candidate even famously referred to the “War on Terror” as a bumper-sticker slogan. It turns out marital fidelity was a bumper sticker slogan for that same candidate as well, but that is beside the point.

We were young and naïve back in those days, overly concerned about international trifles. Now, however, things are different. We are fearful now, because President Barack Obama, who ran on that unforgettable platform of Hope, was ready to fetch the sledge hammer, break the glass, and press the big red button just two weeks into his presidency. In an op-ed published in the Washington Post last week, Obama warned America that if Congress fails to pass his stimulus package, “This recession might linger for years. Our economy will lose 5 million more jobs. Unemployment will approach double digits. Our nation will sink deeper into a crisis that, at some point, we may not be able to reverse.” Irreversible? As in, forever?

In that same op-ed, Obama also rejected calls for additional tax cuts, saying “I reject these theories, and so did the American people when they went to the polls in November and voted resoundingly for change.” The day before the November 4 election, Larry Kudlow wrote an article in which he said, “Wouldn’t it be the height of irony if Barack Obama wins this election as the Ronald Reagan tax-cutter…a recent Rasmussen poll shows that 31 percent of voters believe Obama is the real tax cutter, while only 11 percent choose McCain.” America: meet irony.

So, here is what we know: we are facing an economic crisis so severe that the failure to pass an economic stimulus package immediately could result in irreversible doom to the American economy, but, for political reasons, tax cuts should not be a bigger part of the solution. What exactly is the solution then to weather these “gathering clouds and raging storms”? Government spending in the neighborhood of $800 billion on everything from repairing government buildings, weatherizing homes, buying “green” cars for government employees, building “green” schools, and funding neighborhood stabilization activities (i.e. ACORN).

Basically, the stimulus bill is part incoherent mishmosh of pet projects and part wealth redistribution in the form of increased federal healthcare subsidies and unemployment insurance. Neither is very conducive to long-term growth. And while our infrastructure could surely use a little upgrade at the right time and the loss of American jobs should not be taken lightly, it is pure fallacy that that this stimulus package is the difference between prosperity and misery.

We should know better by now than to take doomsday prognostications from Washington at face value. Remember when Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke implored Congress to pass a $700 billion authorization to buy toxic bank assets, citing a meltdown if delayed? Despite eventual passage of the Troubled Asset Relief Program (TARP)—after weeks of delay and a three page bill morphing into hundreds of pages—only half of the TARP funds have been spent and not even to purchase bank assets. President Obama and the Treasury Department are once again proposing to purchase or guarantee bad assets on bank balance sheets, something we were told needed to be done months ago, lest the sky fall on our heads.

People should not be fooled by panic from inside the Beltway now either. While the recession is serious, throwing around taxpayer money will only exacerbate our economic problems long-term, and the urgency from Capitol Hill and Pennsylvania Avenue has far more to do with politics than our economic well-being. The standard-bearer for government spending in tough times, Franklin Delano Roosevelt, once said, “We have nothing to fear except fear itself.” Americans should have the courage to heed those words now, because our new President and his allies in Congress do not.