There’s something scary about big numbers. It’s one reason we in the media often like to put the biggest number we can find into a headline.
So it was no surprise that most media outlets went gaga over the Obama administration’s projection that the nation’s debt will grow by $9 trillion over the next decade. And sure enough, critics of the administration’s efforts to reform healthcare were quick to seize on that scary number as another reason to advocate doing nothing.
But without wading into the muck of the current debate over healthcare reform, it’s worth taking stock of just how much hypocrisy there is when it comes to the subject of government spending and those big bad deficits.
Let’s start with the Republicans. They talk a good game about reining in federal spending, but they bear as much responsibility as the Democrats for the nation’s $11 trillion in total debt.
It’s sometimes hard to remember that when President Clinton left office in January 2001, the federal budget actually was in surplus. Yet by the time President Bush left town, the federal government was running a nearly a $1 trillion deficit thanks to spending on the wars on Iraq and Afghanistan, the bank bailout and increased spending on prescription drug coverage for Medicare beneficiaries.
But the Republican deficit hawks didn’t really start squawking about government spending until President Obama took office and proposed a $700 billion stimulus package for the ailing economy.
In reality, no political party can claim title to being prudent fiscal managers. All that talk about reducing the deficit often is just a wedge issue that gets used by politicians — both Republican and Democratic — to score points and torpedo legislative proposals they oppose.
So while I’m no proponent of profligate government spending, the current budget deficit shouldn’t be used as excuse to squelch a potentially worthy government program that could benefit generations of Americans.
A proposal like health care reform should be judged on its own merits and not shelved simply because government spending is currently out-of-whack largely because of a need to stave off the worst economic crisis since the Great Depression.
In considering something like health care, there’s a need to take a long-term view-not the just impact on the federal budgets for the next few years.
And don’t be fooled by conventional media wisdom that the average American is concerned about the deficit. Sure, in an abstract polling question most Americans will say big federal deficits are bad. But the truth is most Americans don’t mind government spending when it provides a useful service or puts money in their pockets. If that wasn’t true, the cash-for-clunkers program wouldn’t have run out of money so soon.
The current financial crisis is in large part due to the fact that we’re a society that loves to live beyond its means. It’s the American way to buy more home than is necessary and run-up the credit card bill to pay for a family vacation.
Credit became way too easy during the run-up to the financial crisis, but credit isn’t going away. It’s simply taken a breather. That’s because everyone in the federal government and on Wall Street is rooting — almost urging — for Americans to start spending again.
For good or ill, credit and spending is the lifeblood of a consumer economy. Yet sadly, the only real solution policymakers have for ending the economic crisis is to encourage people to starting living off their plastic cards again.
And that’s why deficit spending by the federal government is probably here to stay for a long time. The government is only doing its part to help.

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…so the more the US borrows from China, the more China gets control over US cash flow and assets to maturity ? (not to be confused with local debt, GDP’s and Reserve Currencies). The ironies, Commies taking over the World. Cheers, have a good one !
- Posted by Hour glassThis story is too much about good democrats vs. bad republicans and not enough about the catastrophe of our national debt. Mr. Goldstein advocates just going the heck ahead and borrowing more for a national health program, which is want a lot of folks on the left would like to see. What’s another trillion?
People don’t understand that there are already signs that our national credit is maxed out. Treasury auctions have started to show weakness, driving up yields (i.e., our nation’s cost of borrowing) because no buyer sees a reasonable plan to contain the debt. A lot of this debt is owned by foreign countries, esp. China. Unless it is brought under control, we risk losing control of our own financial sovereignty and with it, our ability to control our own economy. I find that people on the left often lack the most elementary understanding of economics, one of whose most basic rules is that there is no free lunch. You might as well jump out of an airplane and declare that the law of gravity “shouldn’t be used as excuse to squelch a potentially worthy government program.”
As an aside, Mr. Goldstein has confused the annual budget surplus under President Clinton with the national debt, which certainly was not paid off at that time.
- Posted by TomThe same old routine. This won’t ever get fixed just like so many other causes. No need to get exicted about things one has no control over. That’s what I tell myself…
- Posted by Down Timethat is very funny, clearly the US will have to sell off assets and/or borrow from China, haha, imagine the Lincolns being exchanged for Junkboats.
- Posted by Hour glassThat’s right. If running a $1 trillion deficit is okay then why not a cumulative $9 trillion one? Heck, why not $18 trillion for good measure? Why not a cash for clunkers program every year? If a $11 trillion debt makes Americans feel good, why not ramp it up to $20 trillion, plus $45 trillion in unfunded future liabilities, just before all the Baby Boomers start heading into retirement and start consuming more healthcare? I mean why not? You can always blame it on Bush. Or blame it on Reagan. Or blame it on the Chinese for saving too much!
- Posted by MrBill, EurasiaGo June & John Q Public ! The world has been at war and in depression since the coming of the industrial age. As Warren Beatty said in ‘Reds’: ‘War is about profits’. The US will recover its money on that account. It will however have to beg, steal, print or borrow. Only the latter option is left open. From where ? and how will the debt be serviced ?
- Posted by Hour glassok, you people need to do some fact checking and its quite simple. Got to the US treasury website here:
http://www.treasurydirect.gov/NP/BPDLogi n?application=np
then enter in jan 20th,2001 (bush’s first day) then enter Jan 20th 2009 (bush’s last day) and you will see that during his tenure the debt increased 4.9 trillion….and then add in the cost of the Iraq war at that time (roughly 660 billion) and then add 1/2 half of the tarp payments (350 billion)that were not added until obama was in office. Then try doing the same historical check for the last 7 months of president obama and see how much hes spent. And don’t forget that the iraq war and the tarp bailouts have all been added recenty not before bush’s last day.
- Posted by Harry K Kalas