Want to hear a real laugher? Despite the current disharmony in politics, there's one policy on which all of Washington agrees. Republicans and Democrats, House and Senate, president and Congress all agree that after last fall's financial crisis, the federal government has to regulate the financial industry more closely to protect our economy from risk of systemic financial collapse.
Here's the joke. As boom- and bust-prone as high finance always has been and remains, the greatest systemic risk to our economy is not Wall Street. It's the growing federal debt (and weakening dollar) being enacted by those Washington politicians -- the ones who want to protect us from Wall Street.
It soon may be not a risk but a certainty of generations-long economic stagnation and hard times as a direct result of "unsustainable" and ever-growing national debt, driven by a federal budget almost half of which is to be paid for each year by borrowing money -- primarily from China -- and already weakening the dollar such that foreigners are trying to get rid of their dollars any way they can.
Don't take my word for it. In June, the Congressional Budget Office published "The Long-Term Budget Outlook," its summary reading in part: "The federal budget is on an unsustainable path -- meaning that federal debt will continue to grow much faster than the economy over the long run. ... Rising costs for health care and the aging of the U.S. population will cause federal spending to increase rapidly. ...
"... Large budget deficits would reduce national saving, leading to more borrowing from abroad and less domestic investment, which in turn would depress income growth. ... The accumulation of debt would seriously harm the economy. Alternatively, if spending grew as projected and taxes were raised in tandem, tax rates would have to reach levels never seen in the United States (highest marginal income tax rate so far: 94 percent, in 1944-45). High tax rates would slow the growth of the economy, making the spending burden harder to bear."
And yet the same Congress and president who want to stop the banks from taking too much risk cannot stop themselves from ever more deficits. Indeed, so intoxicated -- nay, hypnotized! -- by debt is the current government that it is not even proposing to try to cut back.
Blankley, who had been suffering from stomach cancer, died Saturday night at Sibley Memorial Hospital in Washington, his wife, Lynda Davis, said Sunday.
In his long career as a political operative and pundit, his most visible role was as a spokesman for and adviser to Gingrich from 1990 to 1997. Gingrich became House Speaker when Republicans took control of the U.S. House of Representatives following the 1994 midterm elections.