With news this week that Congress is poised to consider a new stimulus package, I am forced to again ask a question that seems silly in Washington: How will we pay for this?
While a few Members of Congress have raised the issue, it certainly was not the primary concern of the House Budget Committee when they interviewed Ben Bernanke on Monday. And, when they did direct this question to the Chairman of the Federal Reserve, his answer was the standard rhetoric about how Congress needed to make tough choices. Needless to say, not many specifics were discussed.
One of the most liberal members of the House, Barney Frank, has at least volunteered something of a suggestion: "We can let Iraq take care of itself." This, of course, goes in the right direction, but hardly far enough.
We need to declare the facts and their obvious consequences. The deficit of the United States is now spiraling out of control, and the recent bailout package has only made it worse. Our crushing federal debt is one key reason behind our current economic turbulence.
As Congress begins to consider the third "stimulus package" of the year, we need to realize it is time to start setting priorities. Priority number one should be cutting spending in foreign countries. This does not simply mean Iraq, but everywhere.
The next stimulus package is likely to include money for infrastructure. While these investments are, constitutionally speaking, supposed to be made by state and local governments, it is not likely that Congress will suddenly begin to pay heed to the document we are all sworn to uphold. Still, we need to acknowledge the fact that the current Congress and Administration are rushing the nation toward bankruptcy.
This being the case, we could hope they would at least come to their senses regarding our debt and foreign spending sprees. Our nation's foreign-held debt is at record highs and moving ever higher. Continuing to borrow money from Red China and others in order to pay "dues" to the United Nations and run "Plan Colombia" makes no sense at all.
Our whole carrot-and-stick approach to foreign policy makes no sense. The US government simultaneously gives money to Israel, and to Egypt. We send AIDS money to Africa while AIDS clinics in America shut down. "Millennium challenge" funding goes to countries which enact "market based reforms" as we push our own country further and further into a centrally planned economy.
Economic recovery will only come through financial prudence, savings and getting back to producing things of value again. But it seems to be a foregone conclusion that we are about to enact another government initiative to "stimulate the economy." Instead, there should be some serious talk about cutting all of these foreign giveaway programs. But, alas and again, we should not hold our breath. Congress is still not close to being serious about ending its addiction to debt and spending, and is again faced with the deadly temptation to attempt to spend us out of a recession. We should not forget that in the 1930's those types of efforts gave us the Great Depression.