I received an e-mail from a supporter of President-elect Barack H. Obama congratulating me for having spent so much money that the President-elect is unable to keep his promises to deliver new government programs and spending schemes. First of all, conservative strategy is to live within our means. I deplore all the bailouts which have been advocated by President George W. Bush and passed by the current Congress.
The writer does have a point, though. The President-elect made major promises to all sorts of groups that he would provide a middle-class tax cut for 95% of the tax-paying public, a statistical impossibility, as lower-income individuals pay no federal income tax. Yet under the President-elect's plan they would receive checks anyway. They would not have to pay Social Security and Medicare taxes. He also promised to help those who cannot afford their mortgages, to ensure that everyone has a chance to go to college, to increase early childhood education through mandatory universal preschool, to increase foreign aid, to restore high-paying manufacturing jobs, to offer tax credits to businesses which bring jobs back from abroad and to implement universal health care.
The basic problem is that the Federal Government does not have money for these programs. It can borrow only so much, which it already has done. How much of the American gross national product (GNP) does the President-elect want the Chinese to own? If the Federal Reserve were to print more money, the country would suffer massive inflation.
This situation reminds me of an old story. An old President says to a newly elected President, "You will run into trouble. In the middle drawer in the desk in the Oval Office, I have prepared three envelopes. When you get into trouble remember those envelopes." So after six months the new President gets into terrible trouble. He remembers the envelopes, so he opens the first one. It reads, "Blame it on my Administration." He does and his problems go away. Another seven months go by and this time the President is in greater trouble. He recalls the envelopes, so he opens the second one. It reads, "Blame it on me." He denounces his predecessor as irresponsible and blames him for creating the current crisis. Again, his problems go away. Then a year before he runs for a second term the President gets in worse trouble than ever before. He remembers the envelopes. So he opens the third and last one. It reads, "Prepare three envelopes."