Tempered enthusiasm

February 20, 2008
As one who voted for Barack Obama in the New York primary because of the intelligent and thoughtful persona he has displayed throughout the campaign, I must now admit that I am a bit depressed about the direction both Democratic candidates are taking. Today, I will say a few words about the economy. The basic condition of the economy is that we are living on borrowed money; there is an inflationary threat fueled by increases in the money supply and the low interest rate; there is also the threat of a severe recession; there is the belief among the political class and many economists that a certain amount of inflation is normal and even beneficial and that deficits don't matter. The only long term solution is to impose fiscal discipline upon ourselves, and this means some tax increases, cuts in the federal budget, and delaying any new expensive programs (such as an expansion in public support for health care), reform of Medicare, reducing the costs of the Iraq war, and electing a president who will be willing to use the veto power to discipline a Congress that seems to know no limits and has lost any sense of fiscal prudence. But both Clinton and Obama seem headed in the opposite direction. For example, Clinton has pointed out that tax increases on the wealthy will pay for about one half of the costs of her plan to insure every citizen (not including the costs of coercion). Yet the other half is over 50 billion dollars. Where is that coming from? Both candidates have deferred to special interests to qualify their commitment to free trade. Today's "Wall Street Journal" points out that Obama is proposing "a $10 billion fund to help borrowers avoid foreclosure to buy first homes". Where is that money coming from? And why should the taxpayer pay for the mistakes and imprudence of these borrowers? Clinton wants a fund three times that size. She also wants a 90 day freeze on foreclosures, a violation of the principle of the validity of contracts. According to WSJ again, lenders oppose this idea because they will be forced to lose the interest that was contracted for and the delay would mean that the banks would foreclose on properties that have lost value during this 90 day period. These policies exemplify the point that pandering to one group means harming another and doing nothing to advance the common good. In brief, both candidates are adopting policies that will worsen our current condition rather than cure the disaster that Bush together with Congress has imposed upon all of us. The Realist advocates that both candidates step back, calm their frenzied efforts to win, and , and have more concern for the good of all and the long term interests of the American people.