Mike
http://www.acton.org/commentary/503_moral_bankruptcy_and_bailouts.php
Acton Commentary
bringing moral reflection to bear upon current events
February 4, 2009
The Moral Bankruptcy Behind the Bailouts
by Ray Nothstine <http://www.acton.org/people/nothstineray.php>
South Carolina's Governor Mark Sanford has some advice for government's
spending problem, "When you're in the hole, quit digging." It's a blunt
message that warns us not to let moral weakness aggravate financial
trouble.
Across the country many American families, corporations, and small
businesses are trimming their budgets in this economic downturn. Last
year on the campaign trail, President Barack Obama noted in moving
fashion how some employees were sacrificing by voluntarily cutting their
hours so that other co-workers could keep their jobs.
These responses are models of sacrifice, displays of spiritual strength
in the face of material weakness. Despite such examples, government,
somehow immune from this wave of maturity and responsibility, has
decided to spend and borrow more than ever before. The new trend of
borrowed stimulus bills and bailouts only exacerbates a spending crisis
already out of control.
This is bad news for the American taxpayer and even worse news for the
quality of life of future generations. Every newborn in America is
already on the hook for $175,000 in unfunded government promises. Simply
put, the American dream is at risk for future generations.
The stimulus bill currently before Congress highlights the unsustainable
spending pace of the federal government, which is propelling us closer
to an even greater moral and financial crisis. Former U.S. Comptroller
General David M. Walker says that without fundamental changes to
spending, the United States could go bankrupt in one generation. Walker
noted, "This is not just about numbers, we are mortgaging the future of
our children and grandchildren at record rates, and that is not only an
issue of fiscal responsibility, it is an issue of immorality."
If enacted, the stimulus bill would top $1 trillion in expenses when
interest is added. "The nation borrowed $800 billion between the
Revolutionary War through Gerald Ford's presidency," U.S. Congressman
Gene Taylor (D-MS) observed. "In one vote, the nation is going to borrow
another 800 billion. This is nuts."
Long an opponent of bailout and stimulus legislation, Governor Sanford
took the unusual step of going to Washington in October of last year to
beg the U.S. House Committee on Ways and Means to stop a $150 billion
stimulus bill, declaring that his state didn't want any of the money.
Almost every other governor, even self-described conservatives, have
already lined up for yet another cut from the federal treasury.
"Essentially, you'd be transferring taxpayer dollars out of the frying
pan - the federal government - and into the fire - the states
themselves," says Sanford. Sanford's point is that state spending is
increasing at an even faster pace than federal outlays. State debt
across the country has increased 95 percent over the past decade.
In New York, the governor has proposed 137 tax increases or new taxes
altogether on things like movie tickets, cab fares, iTunes downloads and
non-diet soft drinks, all to keep up with budget increases. Opponents
have described the initiative as a laundry list of nanny state taxes and
fees. California has delayed tax refunds to its residents, simply
because no money is available.
Governor Sanford has been on a mission to highlight the fact that
genuinely stimulating the economy means making sure the country's
finances are on stable ground so that entrepreneurs and future Americans
are not paying for risky quick fix schemes for generations. He told the
Heritage Foundation, "I think God puts us all here for a reason, and
mine in this chapter is to try and slow government's growth."
Sanford has even sparred over the size and growth of government with the
General Assembly of his home state--many of them lawmakers in his own
Republican Party.
The never ending tide of federal bailouts is only delaying the
inevitable restructuring that is needed. "I think that this is the
biggest gut check we've ever had as a country, where do we go next,
towards a politically based economy or a market based economy?" says
Sanford. Put another way, do we take responsibility for the mess that we
have created, or do we shirk our duty and pass the bill down the line?
Many fellow governors and lawmakers may never buy into Sanford's ideas
about free markets, privatization, and the value of limited government,
but they may be forced to heed some of his warnings and reform
government's cost structure out of sheer necessity.
Or they could ignore the warnings, continuing down a path that may usher
in an even greater financial crisis. That would be a failure of economic
policy, yes, but even more grimly a demonstration of moral cowardice.