A while back, I had written about ‘Three Republican Untruths.’ I’ve been overtaken by other events, but Election Day is next Tuesday, so if I’m going to present the other side, now’s the time. Here goes:
Government spending is not the problem, it’s the solution: The Federal government has run deficits in excess of one trillion dollars in every year of the Obama administration. Of every three dollars spent by the government, one is borrowed. And yet, unemployment remains high, and the overall economy remains sluggish.
Some say that the answer is more stimulus: Keynesian theory says so. But Keynes also noted that government spending to generate demand should vary with the state of the economy: when there’s plenty of demand elsewhere, the government should reduce its own spending to maintain balance. We haven’t done that, and now we find that government stimulus doesn’t really stimulate very much anymore.
And yes, we could simply will more money into existence: it’s a little more complicated than that, with the Federal Reserve, but that’s already happening. The problem is that doing so inflates and debases the currency. For now, inflation has been mostly contained, but that’s unlikely to last forever.
Related to this is Social Security. President Bush was attacked in 2005 for suggesting that Social Security should be privatized. I’m not sure that’s necessarily a good idea, but the basic problem of any pension plan is how to invest the money collected today in order to pay future beneficiaries. Until now, the money collected from Social Security tax was nominally invested in Treasury bonds. In other words, it got lent to the rest of the government, which spent it. We’re now learning the hard way how that worked out.
Health care reform is a singular achievement: I’ve written about this before. Many of the provisions of health care reform are already the law in New York State, and the result is that health insurance is fantastically expensive. For most people, it will have to be subsidized. Health care reform mobilizes trillions of dollars of public and private funds to pay for health care, with very little to actually limit costs. (Or is that where the death panels come in?)
The world would be at peace if it weren’t for us: Yes, the US has gone to war for really stupid reasons at various times in our history. But, on balance, we’ve been more of a force for good than for evil. And there are still enemies out there. Romney was right when he referred to Russia as our greatest geopolitical adversary: it’s an authoritarian state with visions of its former grandeur, with the resources and the will to make good on its dreams. It’s OK, as Obama had suggested in 2008, to seek to open up dialogue with our adversaries. But it’s also very possible that our adversaries don’t want to talk to us.