My wife and I tag-team to get our four kids ready for school in the morning. She manages the lunch-packing process and I make a hot breakfast. Rarely does a lively morning pass that I don’t gaze upon my children at the kitchen table and silently lament Washington’s economic decision-making. I agree with President Obama, who says, “The situation could not be more serious.”
It has taken years of toxic economic decision-making to create the cracks in America’s economy: an annual deficit of one-trillion dollars, a national debt of $10 trillion, unfunded Social Security and federal healthcare liabilities of $40 trillion, a rickety devalued dollar, and a Federal Reserve Bank that enables all of this, including the subprime mortgage debacle that proved to be the tipping point of our current troubles. As my kids start their morning each day at breakfast, I wonder about their future.
President Obama has young children as well. He was born August 4, 1961. I was born August 3, 1961. His children attend private school and mine attend a private school that rents space in two small churches. We’re both concerned about America’s future and want the best for our kids. President Obama says he wants change, and I, too, want change. President Obama and I are similar in many respects, yet he and I are a microcosm of the polarity of American economic thought.
With Friday’s announcement of another 598,000 lost jobs in mind, President Obama chided his political opponents for not yet acting on the stimulus legislation. “The situation could not be more serious,” he said. “It is inexcusable and irresponsible for any of us to get bogged down in distraction, delay or politics as usual while millions of Americans are being put out of work. Now is the time for Congress to act.”
But how does President Obama want Congress to act? During his first press conference on Monday evening, President Obama said, “But at this particular moment, with the private sector so weakened by this recession, the federal government is the only entity with the resources to jolt our economy back into life.”
After breakfast, my wife said she doesn’t understand how the government can keep spending money it doesn’t have. Of course, the answer is that the federal government has a printing press to print money and, as mentioned earlier, we have borrowed ourselves into an incredibly deep and dangerous hole. The stimulus plan now calls for another $789 billion. My wife said we’ve got to stop. I think she’s right. The federal government may be the only entity that doesn’t have the resources to jolt our economy back to life. Lessons from the Great Depression teach us that the kind of action that President Obama advocates will cause more and protracted economic pain.
Ironically, as he announced his Economic Advisory Board last Friday, President Obama said, “The American people did not choose more of the same. They did not send us to Washington to get stuck in partisan posturing, or to turn back to the same tried and failed approaches that were rejected in the last election. They sent us here with a mandate for change, and the expectation that we would act.”
If this is true, why is President Obama not changing? Why is he following in the footsteps of earlier administrations, including that of George W. Bush? “An historic crisis demands an historic response,” he said last Friday. No, this historic crisis demands a historic change.
So far, President Obama is pursuing “tried and failed approaches”—but only bigger—that have created our historic economic crisis. Like my wife and much of the American electorate, I would like our elected officials to truly change their ways; to get spending, deficits, and monetary policy under control. President Obama has assembled a small team of economic advisors to help him manage the economy. I hope that his team will encourage him to change course, rein in government, and rely on the collective wisdom of millions of Americans who make hundreds of millions of informed economic decisions each day to manage the economy.
Although President Obama and I are only one day apart in age and both have young children, our economic thinking represents very different views for solving America’s historic economic crisis. Just a few days into his presidency, he is demonstrating that he wants to pursue old policies in a much bigger way. I’d like to see change—responsible budgeting, like the kind that Americans do for themselves around their kitchen tables. Washington is just now learning what my wife and kitchen-table-budgeters know: we can’t spend more than we take in without getting into more trouble.