I hate talking about politics sometimes because that topic seems, too often, to immediately descend into vitriol and tired party lines. If there's anything that's wrong with politics today, it is our intolerance for differing opinions. Punditry has so largely displaced discourse that the moderate voices no longer have place. Ideas are not judged on merit, but mocked or lauded by party leanings. This is why I begrudgingly write about politics at all, because I can handle the partisanship.
It is this hesitance that motivates me, because I realize that if I am weary of the political process, there must be countless other thoughtful voices that are also stifled. If we collectively remain silent, then the quiet moderate majority will constantly be held hostage by the political pendulum. With this in mind, I have some thoughts on current economic situation we face in the US.
So, sure, deficit spending didn't cause our current problems, or de-regulation of the financial markets, or the Fed keeping interest rates too low to avoid inflation, or sub-prime lending destroyed by the housing bubble, or an ill-timed and expensive conflict in Iraq, or a ballooning national debt, but surely it's some combination of all of them... which was in turn caused by some combination of Presidential administrations, Congresses, and greedy/stupid people.
While preventing any one of those problems might have mitigated our current situation, that doesn't change the fact that we're here now. Everyone is looking for the straw that broke the economy's back to assess blame, but there isn't one. I happen to think that GWB's admin has perhaps a majority of straws, but Congress and previous admins have their share, too. In the end, we have to assess each problem individually and find the best solution.
The big news right now, is, of course, President Obama's new 3.6 trillion dollar budget for 2009-2010. Yes, it is huge, and yes, numbers of that size frighten me. But then again, I'm not so sure it is as egregious as we might think.
The thing to remember about debt is that it is not bad in itself. While it is generally to be avoided, there are times when taking on debt allow us to invest in things that pay long term dividends. Home ownership and college education are two classic examples. I think national debt should be viewed in the same way. When we agree to take on debt, we have to consider where we are investing those dollars. Is out debt going to pay out long term dividends that exceed the long term costs?
So, what's the purpose of this new debt we're taking on? From what I understand, it appears to be more focused on infrastructure, energy, and health care. To me, these seem like no-lose investments. Frequently, this country has gone into debt primarily for the national defense. Unfortunately, this is less of an investment than it is an expense. Certainly we reap the benefits of a strong national defense, but the expended money seems to have little long term effect on the economy. The one notable exception to this, I think, is the success of the GI bill in growing post WWII America. That massive investment in American education largely created the modern middle class.
Back to current times, I would prefer that my tax dollars not be used for stimulus spending, but my point is that IF there is going to be stimulus spending, I want that spending to be in areas that will have tangible results after the money is gone: a new road, or new rails, or more scientists, or better pre-emptive health care to reduce costs later, etc.
If we look back to the last huge stimulus package, the New Deal, I will agree that a lot of FDR programs did not help the situation in the immediate term (poor monetary policy and counter productive price controls are two that come to mind) but the effects of the other programs can still be seen all around us: rural communities gained electricity or irrigation systems and I was educated in buildings that were constructed by the WPA some 75 years ago. Sure, it's not ideal, but if there's going to be spending, I think it should be spent in a similar way.
Mostly, I'm tired of the knee-jerk reaction to everything President Obama does, whether its pirates, budgets, or bailouts. Such vitriolic responses do little but make the conservatives seem increasingly out of touch. Though they may not be the party in power right now, the conservatives can still have a powerful voice in shaping how President Obama's agenda is implemented, and I hope they don't throw away that chance.