While some may have misgivings about the new presidential administration of Barack Obama, legitimate concerns should be raised about the impact Obama’s proposed economic "stimulus" package will have on the inherent nature of our economic system.
Obama and the liberal Democrat-controlled Congress have made it perfectly clear that they intend to pursue a federal spending policy unprecedented in US history, and many Republicans in the Congress have made it clear they do not intend to do anything to prevent these massive spending increases.
As a consequence, in the next few months, Americans will see the most drastic – and potentially draconian – upheaval in our free -market economic system. Already we have witnessed the massive spending of taxpayer dollar on banks and financial institutions that blundered their way through the past few years, and the use of taxpayer dollars to salvage an auto industry that should have been allowed to sink or swim. The gun sights of federal bureaucracy are focused on the entire healthcare industry, and various states and cities throughout the country are clamoring for "their share" of a bailout in order to flood their botched budgets with cash to keep them in the black.
Indeed, after spending years criticizing George Bush and the Republicans for record deficit spending, Obama and the liberal-Democrats are now not only embracing deficit spending but are predicting new record levels in order to salvage an economy that has been living on a bubble for more than 16 years. And Stephen Moore, Wall Street Journal economist, has noted that the Federal Reserve Bank is printing dollars on a ’round the clock basis.
My concern over all of this is very simply: what’s going to happen when the bill comes due? The federal government cannot continue to spend money in an arbitrary manner, benefiting select groups of people – from corporate interests to "the poor" – while asking the taxpayer to foot the bill. There isn’t enough money in the country, there aren’t enough goods and services, and there are not enough "rich" people to keep flooding both the domestic economy and foreign markets with American dollars.
The ancient Roman political leaders, in the waning days of the Roman Empire,
realized that they needed to keep the masses under control or run the risk of riots in Rome; hence, they began giving free bread to the citizens and providing them with free entertainment via the circuses and coliseums.
Short of the bloodshed, what is the difference between the billions of dollars in welfare checks, medical services and free WiFi that so many Americans – potentially up to 50% of the population – are demanding of the federal government, and the "bread and circuses" of ancient Rome? In the course of time, the Roman economy could not bear the burden of all of the extraneous spending and, at roughly the same time the barbarian hordes began invading the northern regions of the Empire, the great empire fell into chaos and ruin.
How, then can the United States, with the trillions of dollars of expected deficit spending, expect to fair any better? In fact, we have tried to spend our way out of economic recessions in the past under Hoover and Roosevelt, just as we are trying under Bush and Obama, but the consequences simply led to an economic condition no better than when it started.
If the economy were permitted to correct itself, then the length of any economic slowdown ends sooner and life gets back to normal; indeed, the only time an economy benefits from government "intervention" is when taxes are cut (as occurred under Kennedy, Reagan, and Thatcher in England), permitting more money to remain in the hands of the people who earned it.
It is inevitable that the economic "stimulus" package advocated by Obama will create a federal deficit unseen before in US history; the corresponding flooding of the world markets with US dollars will ultimately lead to inflationary pressures the likes of which we have not seen since the Carter Administration. The inevitable increase in oil prices due to chronic friction in the Middle East will only exasperate what will become an increasingly desperate economic situation.
And when this perfect economic storm hits, what will become of this union we call the United States?
Petolicchio lives in Jackson Township, Lebanon County, PA and is the Immediate Past President of the Constitutional Organization of Lebanon.