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Dark Prospects For Spendthrift Democrats

Investor's Business Daily
June 9, 2010
By Ernest S. Christian and Gary A. Robbins

It is old news that many congressional Democrats are on the road to political oblivion - 33 House members and nine senators are already on the endangered list. Now, however, even incumbents in "safe" seats are looking toward the future with fear and trembling.

They worry that the Democratic Party's most well-known characteristic (spend a lot of money fast) may be fatal at the polls. Sen. Ron Wyden, D-Ore., a member of his party's dwindling clerisy, is sorely vexed by an epiphany full of dark portents.

"I have come to the conclusion," he proclaims, "that the voters are saying now that just throwing money at various kinds of issues - virtually all of which are deserving - isn't good enough."

Don't laugh; this may be serious political history in the making - perhaps the end of a Democrat-dominated epoch during which federal spending as a percent of GDP has already grown from 2.5% in 1929 to 25.4% today and is heading toward 30%.

Like generations of Democrats before them (and a few quisling Republicans), Wyden and his colleagues in Congress are habituated to throwing billions of dollars at every real or imagined imperfection in society, no matter how slight.

It's not that liberal applications of money actually cure anything. Usually they don't. But in politics, what counts is putting cash in the hands of favored constituents who are expected to express their gratitude on Election Day.

In 2008 under the guise of economic stimulus, Congress mailed out millions of $1,200 to $1,800 checks to constituents. Speaker Pelosi airily declared that her magical gift packages would quickly "create" 500,000 jobs.

Sadly, six months and $100 billion later, the economy had already lost an additional 465,000 jobs, and the carnage has since continued at a rapid rate to the accompaniment of even-more-extravagant stimulus spending.

Feckless spending is a disease endemic to Washington, especially among Democrats who seem to have a nearly maniacal urge to give away other people's money.

But those wasted billions are chicken feed compared to the extra $6 trillion that Obama is trying to spend in a frenzied record-setting spree so futile in job-creation (unemployment has risen to 10%), frightening in its motivation (a permanent welfare-state imperium for himself) and dire in its financial implications (national bankruptcy) that even ideologically hardened Democrats are beginning to flinch.

With other spendthrift socialists having already caused financial crises in Britain, Spain, Greece and, most recently, Hungary, can Democrats credibly claim shock and surprise? Are they actually learning for the first time that their own ongoing profligacy is not a virtue? Of course not. The iron laws of economics (and common sense) have long been flashing "Stop"!

Democrats understand (although they prefer not to) that the money they squander is not "free." Despite pretending otherwise, they also understand the fatal flaw inherent in a big-spending government: The economic feedback to society of a dollar of government spending is typically less than a dollar, whereas the cost to society of a dollar of government taxes to pay for that spending is typically several dollars.

Voters are, via the Internet and otherwise, angrily looking over Washington's shoulder. They've caught on to the scam: The more the spendthrifts spend, the worse off we all are. "It's becoming not only a fiscal problem, but also a political problem," Sen. Robert Casey, D-Pa., complained to the Washington Post.

(Normally Democrats assuage voters' discontent by throwing money at them, but that is not a smart option when government profligacy is itself the source of voter anger.)

It's too soon to start shorting the Democratic Party's stock, but the prognosis is not good for Obama's rehashed version of the big-spending, Depression-era policies of the New Deal.

Unlike the 1930s when the modern Democratic Party was born, Americans are today much better educated and far less credulous. They are prosperous by comparison and more interested in getting on with their own lives than becoming wards of the state. In most cases, their votes can no longer readily be "bought" - at least not for anything the Democrats presently have a credible capacity to offer.

The Democratic Party is today economically and culturally out of step with the great changes in attitude and outlook going on in America and the world - and to make matters worse, it is in a period of intellectual decline at exactly the time that new ideas and approaches are required.

Christian, an attorney, was a deputy assistant secretary of the Treasury in the Ford administration. Robbins, an economist, served at the Treasury Department in the Reagan administration.

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