Government Party in Crisis
President Obama is in a dilemma from which there appears to be no easy or early escape.
Democrats are the Party of Government. They feed it, and it feeds them. The larger government grows, the more agencies that are created, the more bureaucrats who are hired, the more people who become beneficiaries, the more deeply entrenched in power the Party of Government becomes.
At the local, state and federal level, there are 19 million to 20 million government employees. And if one takes only Social Security, Medicare, Medicaid, food stamps and earned income tax credits, we are talking of scores of millions who depend on government checks for the necessities of their daily life.
These vast armies of voters — these tens of millions of government employees and scores of millions of government beneficiaries — are the big battalions of the Party of Government. They provide implacable resistance to any party that pledges to cut or curtail government. For they are fighting for their livelihood. And here is where Obama’s dilemma arises.
The progressives thought that with the takeover of both houses of Congress by veto-proof Democratic majorities, and the election of the most progressive of the candidates in the Democratic primaries save Dennis Kucinich, a new Progressive Era was at hand.
Another New Deal, another Great Society. And early passage of a stimulus package of $787 billion, nearly 6 percent of the entire economy packed into a single bill, seemed to confirm that happy days were here again.
But, at the same time, the federal takeover of AIG, General Motors and Chrysler and the bailouts of Fannie, Freddie and the Wall Street banks were igniting a Perot-style prairie fire that manifested itself in Tea Party rallies in the spring and town-hall protests in August.
Harry Reid and Nancy Pelosi denounced these folks as “evil-mongers” engaged in the “un-American” activity of shouting down Democrats — though, when college radicals do it to conservatives, it is called “heckling” and the conservatives are instructed that they “just do not understand the First Amendment.”
Came November, Republican victories in Virginia and New Jersey showed that the grass-roots rebellion was real and broad-based. This was confirmed by Scott Brown’s astonishing upset in Massachusetts, where a state Obama won by 26 points went Republican by 6 points, with Brown capturing a Senate seat held by the Kennedy brothers since 1952. Talk about a fire bell in the night.
Obama’s dilemma, evident in his State of the Union, is that the progressives, who were indispensable to his victories over Hillary, now feel betrayed, especially with apparent abandonment of health insurance reform, while conservative Democrats and independents, who were indispensable in giving Obama his November victory, are angry and alienated and disposed to vote Republican to stop what they see as America’s plunge into socialism.
The non-negotiable demands of these two essential elements of Obama’s coalition are in irreconcilable conflict. Obama tried to mollify both in his address to Congress by emphasizing aspects of his agenda that appeal to each. Thus the progressives were promised an end to the “Don’t ask, don’t tell” policy on gays in the military, while Tea Party and town-hall activists got a partial freeze on federal spending and promises of nuclear power, clean coal and offshore drilling.
Obama’s problem: He can end up satisfying no one and angering everyone. John McCain has already denounced Obama’s call for open homosexuality in the military, a position that will resonate with Middle America, while House Democrats are appalled the Pentagon will be exempt from budget caps imposed on social programs.
Arthur Laffer has pointed up the burgeoning crisis Obama and the progressives confront. Today, state, local and federal government spending consumes 38 percent of the gross domestic product. Federal spending alone is 27 percent.
“If you total what the government takes in the income tax, corporate tax, Social Security taxes, capital gains taxes,” says Laffer, “all of that adds up to $2.2 trillion in tax receipts, and they spent $3.5 trillion.”
In 2009, we had a deficit of $1.4 trillion, 10 percent of GDP. The most conservative estimate for this year is a deficit of $1.35 trillion, more than 9 percent of GDP.
Two questions.
With the public debt surging as a share of GDP, and talk of a debt default by the United States, how can Obama create or expand the social programs as progressives demand? And with the deficit running above 9 percent of GDP, how — even if the economy starts to grow — can you close this without raising taxes from 18 percent of GDP to 22 percent or 23 percent? That would be an added tax hike of $560 billion to $700 billion — a year.
That kind of hit on the private sector could kill a recovery, just as Herbert Hoover and FDR did in the early 1930s.
Obama has a problem — and so do we.
36 Comment by Sean Scallon on 31 January 2010:
Pat is right about the Democrats being the party of government. In fact they’ve been that way since 1933.
But there is another party of government, one that has many, many dependents. They include subsidy addled farmers, small businessmen dependent on SBA loans, all those in the military, the FBI, the CIA and all federal law enforcement and intelligence agencies. Then you have all the members of the military and their dependents. And I suppose we should forget all those businesses like areospace, defense contractors, and the space industry, dependent on government contracts for their livelihood. And lets not forget the retired members of such groups and their government funded pensions. This party is known by its initials GOP and this party has designated itself as their defenders, for both policy and for funding. They incur a lot of costs too to the taxpayer.
So given that we have two parties of government, is it any wonder we have deficits and is it any wonder the taxpayers suffers under their weight? What was it that Pat said about the two parties being wings to a bid of prey? He was more right than he knew.
WHY IS THIS SO HARD? THE REAL QUESTION IS WHO DO THEY WANT TO ALIENATE? THE BIG MONIED LOBBYISTS THAT GET THE DEMOCRATS ELECTED OR THE LARGE VOTING BLOCKS OF VOTERS?
The democrats could easily limit government programs, lower unemployment and be strong national security by closing the borders declaring a moratorium on mmigration (legal and illegal) and H1BVisas.
Conversely the democrats could reform healthcare by taking on caps for trial lawyers, taxing high risk trades in hedges, derivatives, credit default options, speed trading, etc (the greater the financial risk the higher the financial tax) and negotiating caps for drugs their biggest donors…but it would provide more money for actual services.
WHILE TAKING AWAY THOSE ISSUES FROM REPUBLICANS.
Republicans have their own weaknesses because the republicans also are pro-war when the country, protrade, and ignored the border and immigration for the entire bush presidency. All things their rising anti-government libertarians, conservatives and tea partiers are voting incumbants out for supporting.
So…no its not impossible and its not hard but the message is very clear: BUSH2 NEOCONSERVATIVE REPUBLICAN CONSERVATIVISM IS DEAD! OBAMA NEOCOMMUNIST DEMOCRATIC LIBERALISM IS DEAD! NO FDR! NO LBJ! NO NIXON!
THINK TAFT! THINK EISENHOWER! THINK TEDDY ROOSEVELT ANTI-MONOPOLY: Break up the banks, break up energy, privatize the schools, privatize the railroads and mass transit where government owns the infrastructure and private companies run the operations, expand free trade to exclude currency linkages and manipulations, declare population ceilings for the US and close the borders due to terrorism instead of adding 8 year old boyscouts and inspecting grammas bra and girdle.
FELLOW CITIZENS OF THE UNITED STATES, I SAY THIS LOUDLY. UNEMPLOYMENT IS TO HIGH AND THE INVESTOR CLASS CANNOT KEEP OUR IMMIGRATION BORDERS OPEN WHILE SHIPPING OUR JOBS AND INDUSTRIES OVERSEAS WHILE BUYING US OFF WITH WARS AND SOCIAL PROGRAMS AND BAILOUTS.
ON THE DEMOCRAT AND REPUBLICAN, LIBERAL AND CONSERVATIVE, INDEPENDENT AND LIBERTARIAN…ALL ARE GATHERING AROUND NATIONALISM.
AND IF GOVERNMENT CONTINUES ITS PAN GLOBALISM FOREIGN POLICY COMMITMENTS OVER DOMESTIC CONCERNS THEN THAT NATIONALISM IS GOING TO CONTINUE GROWING UNTIL IT IS POWERFUL ENOUGH TO GAIN POWER….IF ADDRESSED EARLY IT WILL REMAIN NATIONALISM…IF IGNORED IT WILL GROW INTO FASCISM IF NECESSARY TO GAIN POWER….EITHER WAY…AMERICANS WANT AMERICANS TAKEN CARE OF FIRST AND THEY WANT TO BE TAKEN CARE OF WITH LESS GOVERNMENT, LOW TAXES, LOW COST OF FUNCTIONING SERVICES AND THE DIGNITY OF JOBS….NOT THE DEPRIVATION OF GOVERNMENT SERVICES.
It is quite easy to spell out on paper what should be done. However, it is not that easy to accomplish. Our people are too prone to drastic change. They object to the Bush era…I did too. But by their rejection, they swayed so far to the left they voted in an arrogant socialist with anti American views. And gave him a majority in congress.
Now, they want to go over the cliff in the other direction. I am for less government, free trade, ethical politics and more, but you cannot take a republic in the present condition ours is, and expect to have a libertarian type overnight. What we need is a good, solid Republican who still adheres to the ideals once held by that party, give him/her at least a slight majority in congress to enable some accomplishment, then work out of this ridiculous mess.
Sarah Palin is one. Newt Gingrich is another although many consider him too liberal. He is not, he has his head straight on his shoulders with exceptional knowledge. We have a couple of other good Governors who would make a great president.
I’m not as well versed on some of these issues, but didn’t President Bush grow government more than other President? And to the pseudonymous “Prophet” do you really think that Palin is a Conservative? (Capitol C) And Gingrich too Liberal? OMG! is it because he mostly wants to stay out people’s bedrooms?