Five Lost Years

January 24, 2013
Dan Keating

I attended Mass recently which was celebrated by a Ugandan priest. Although his English was poor his message was obvious and clear, he was after money.

You might recall it was in Uganda where the Entebbe raid took place when Israeli Forces rescued a plane load of its citizens.  Ugandan butcher Idi Amin Dada ran the country at the time.

During the Ugandan priest’s sermon most of the congregation felt – like me – enough is enough.  If places like Uganda ever changed from endless dictatorships, there might be the funds to support the country and its people.  This thinking might work for most African countries.

Then it occurred to me.  That is exactly what Washington, D.C., is doing to America.  As the politicians of both parties spend money little by little, there will not be enough to go around to start businesses, go to school and run one’s life.  The debts for future citizens to grapple with will be enormous.

The game works like this.  Just before the fiscal cliff, Republicans are told by their leadership to go along with taxes and then we will concentrate on cutting spending.  Two weeks later, when the Sandy Aid bill comes up, Republicans vote to spend over the $60 billion requested by President Obama knowing full well over $20 billion was pork spending unrelated to the storm.

When will this ever end?  Only Congressmen Jim Bridenstine and Markwayne Mullin had the courage to vote against waste and other self-serving Republicans.

What we have created are elite politicians and lobbyists who live off the government and through the contacts they have made.  What company did Presidents Clinton or Bush start or sell to be worth $200 million plus?

As David Boaz, executive vice president of the CATO Institute, is quoted in the New York Times, “Washington’s economy is based on confiscation and transfer of wealth produced elsewhere.  Out in the country, they’re growing food, building cars and designing software – all these things that raise our standard of living.  Here in Washington, everyone is writing memos to each other about how to take some of that money and which special interest should get it.”

The article went on to define the problem.  “There’s something unsavory about having a capitol city doing outrageously well while the rest of the country is limping along, especially when its economy is premised in part on capturing wealth rather than creating it.”

Harvard economist Benjamin Friedman feels the weak economy is driving the failures in Washington.  “Consider how different our politics might be today if the economy had not collapsed in 2008.”  Some feel that a one percentage point increase each year for ten years would have eliminated $3 trillion of deficit.  “Moreover, it would happen without making cuts to a single program, like Medicare or food stamps or raising additional revenue.”

But the economy did collapse in 2008 – led in large part by real estate lending and the products created by Wall Street to support the same lending practices that proved unsound.

The federal government, our federal government, encouraged poor lending practices and allowed non-banks like Countrywide to handle the bulk of the transactions, and for agencies of the government to purchase billions of dollars  of worthless real estate paper, which were rated triple-A by government supervised agencies.

For its part, the federal government through President Obama has destroyed the economy through direct means or implied ones through poorly drafted regulation and non-support of industries they deem unsound like the Keystone Pipeline.  Anything and everything that would jump start the economy should be on the table for consideration, but it is not.

The Bush and Obama economic policies have destroyed the bulk of the net worth of most Americans and devalued the purchasing power of their dollars.

Our government is simply too big and powerful to serve the needs of its people.  As long as the political class can remain in control and use their offices for personal enrichment our economy will remain idle and citizens much poorer.