Jonah Goldberg

There's an old joke about a fantastic three-legged pig and a farmer. It comes in many versions. In some tellings, the pig saves the farmer's life. In another, it can talk. The punch line always comes after a visitor asks, "So how come he only has three legs?"

"Because," the farmer explains, "you don't want to eat a pig like that all at once."

More and more, it seems the Obama administration has just that attitude toward the economic crisis: doling out pork for as long as possible.

Recall the White House mantra of "never let a crisis go to waste." Though the economic implosion had specific causes stemming from the financial and housing markets and how they were regulated, President Obama insisted that the items on his campaign wish list -- overhauling health care, imposing carbon cap-and-trade and reforming education -- would be the real solutions to the crisis.

"The fact is, our economy did not fall into decline overnight," Obama told Congress in February. And only by "investing" in policies formulated years before "toxic asset" became household words could America get out of the crisis.

As a result, we're now stuck with some of the most absurdly counterproductive legislation imaginable. The national debt is growing faster than the GDP. According to the Congressional Budget Office, within 10 years Uncle Sam's publicly held debt will double to 82 percent of GDP. The CBO predicts that by 2038, our debt will be 200 percent of GDP. Debt siphons off growth for the simple reason that dollars go to paying it off rather than investing in something productive.

Meanwhile, thanks to ongoing trade deficits and relentless borrowing, America's financial status is deteriorating rapidly. The Commerce Department reported Friday that the value of foreign assets owned by Americans is $19.89 trillion, while the value of American assets owned by foreigners is $23.36 trillion. In other words, we are a "net debtor" to the tune of $3.47 trillion. That represents a 62 percent increase over 2007. Foreigners, most significantly China, own nearly 50 percent of our government's public debt.

So while the Obama administration frets over the largely phony idea that we are dangerously dependent on foreign oil (Canada sends us as much oil as the entire Persian Gulf region, and Mexico not much less), we are increasingly threatened by dependence on foreign bondholders who could wreak havoc on the dollar and our interest rates far more easily than OPEC could cut off our oil.


Jonah Goldberg

Jonah Goldberg is editor-at-large of National Review Online,and the author of the book The Tyranny of Clichés. You can reach him via Twitter @JonahNRO.
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