Obviously, Keynesians make up the backbone of President Obama's economic team, and they seem to feel that government spending is the way out of the economic crisis. But consider these facts that Hassett has marshaled. If the Obama stimulus package goes through, the deficit will stand at a whopping $1.7 trillion. What that means, according to Hassett:
When President George W. Bush was first elected, total federal government spending was about $1.7 trillion. In other words, the difference between federal outlays and federal revenue this year will be bigger than the entire government was as recently as 2000.
Why does this matter? Hassett explains what happens when 2017 rolls around and the Social Security trust fund starts running deficits:
The Federal Reserve could print enough money to accommodate all of that debt, in which case the dollar will collapse and the U.S. will be looking at a South-America-style run on its debt.
Or the U.S. government could get its fiscal act in order with higher taxes. For that to happen, income taxes would approximately have to double.
And so what, exactly, is contained in this stimulus bill that the lefties in Congress are insisting upon? Well, check out this entry from the WaPo's Economy Watch blog. Included in the bill, which even the blog calls a "classic Congressional Christmas tree" is the following:
Bonds for school building;
a $25 dollar weekly increase in unemployment checks;
"a one-time additional SSI payment to low-income elderly and disabled recipients."
In other words, it's a bunch of traditional liberal priorities being shoved down the public throat in the guise of supposedly remedying a crisis. How, exactly, all this is supposed to "stimulate" the economy isn't clear to me.
Wouldn't it be nice if someone in the press asked Speaker Pelosi or President Obama? This is no time for Republicans in the House and Senate to go wobbly -- or else they're just part of the problem.