The constant refrain from the Democrats these days is that they are fully justified in the massive spending programs they are racking up because the last administration also ran up massive deficits. The fallacy of this argument should be self evident, yet somehow they are not being called on it. Washington has now committed well over $12 TRILLION worth of spending thus far and that figure seems to be climbing daily. For perspective, if one adds up the Louisiana Purchase, all New Deal programs, the Marshall Plan, the Korean War, the Vietnam War, the S&L bailout, the Second Iraq War and the space program (all adjusted up for inflation) the entire package would only come to $3.9 trillion.
… It is very much starting to look like the Obama Administration has learned another bad lesson from the just departed Bush Administration. It is now clear that the current spending spree is to the economic crisis what the Iraq invasion was to the 9/11 attacks. If the Bush Administration used 9/11 as a pretext to attack Iraq (something they were itching to do) then the Obama Administration is using the crisis to undertake all of the liberal spending programs that the Democratic Party has built up on the shelf for the past eight years.
Mark Twain was famously quoted as saying that “No Man’s Life Liberty or Property is Safe While the Legislature is in Session.” The House Democrats in Concord seem determined to prove him right. Having pledged not to raise taxes they immediately ran up a $500 million deficit. Now with the severe recession upon us they are determined to make things worse by raising taxes. In the last session of the House they passed no less than 23 fees and tax increases. Taxes were raised on everything from boat fees (HB205), the establishment of recreational saltwater fishing fees (HB481), attraction signs (HB 671), and a raise in gasoline taxes (HB644) even as Washington is poised to similarly raise gasoline taxes.
In this session, they have already passed eight more increases. Of course they could not stop there; having resolved that they would increase the tobacco tax (HB 608), could not help themselves and attached eleven more tax provisions to the core bill. The list of new tax targets seems endless: taxes on charitable gambling winnings, an increase in room and meals taxes, new fees on health facilities and community living facilities, a fee for review and permit reviews and inspections, motor vehicle inspection and fees, subdivision fees, environmental services and subsurface programs, as well as several other filing fees. For “good measure”, they have also decided to throw in a capital gains tax (5%) and inheritance tax (8%) which they have added to HB2. Why not?
Much is being made these days about the unwillingness of the banking system to make the loans needed to regenerate the vitality of our economy and restore prosperity to the world. Populist rhetoric is at an all time high and the usual suspects are, of course, the bankers themselves. We are actively chastising the banks for the dumb loans they made while, ironically, castigating them for now being too tightfisted. Of course, even in the best of times, the bankers of Wall Street are never societal heroes; in the popular culture, the true banking heroes and icons are Bonnie and Clyde. Still, it is worth asking how the seemingly brilliant and highly educated people who became bankers could have been so dumb.
But, there is a striking paradox in the immediate problems we are struggling with today. On the one hand, they were brought on by a relatively small segment of the financial community. At the same time, they were passively enabled by a massive and pervasive institutional failure of good governance at almost every level. When we unbury ourselves from the debris of today’s wreckage, the key question will undoubtedly be how this could have happened. How is it that our vaunted financial system was such a house of cards?