Jun 12, 2009
How many people have gotten into serious financial trouble after running up their credit card debt? How many families borrowed against the equity in their home only to see housing values fall and realize they were buried in debt? Didn’t we, as individuals, make a lot of risky choices that pushed us into this recession?
If what I am suggesting is true, then maybe – just maybe – the federal government could learn from those mistakes.
You’re going to say that we need to borrow and spend now to stimulate the economy to get out of the recession. O.K. I accept that. But there is a limit.
President Obama said, “We can no longer afford to leave the hard choices for the next budget, the next administration or the next generation.” That sounds good. However, he has made no hard choices. He has no plan to keep Social Security, Medicare and Medicaid solvent. And we both know the Congress has no will to do anything. All they want to do is spend money to buy votes. Next year, they will have less courage because it is an election year. We need to make some hard choices now.
But instead of hard choices, the President has given us a budget proposal that runs an annual deficit of nearly a trillion dollars as far as the eye can see. We are on an unsustainable course. Of course, we have no credit limit and can just print more money. That will guarantee hyperinflation. Remember the 18% interest rates of the early '80s?
President Obama wants to spend billions on education. Where will the money come from? He wants universal health care, but how do we pay for that? He wants cap-and-trade, which will be nothing more than a huge tax on everyone.
I know that the President has a lot of challenges on his plate, but he needs to show some leadership in dealing with the budget deficit now. We don’t want to wait until China, our banker, orders us to do it.
Until next week, I am John Block from Washington, D.C.