It’s Time To Listen To The Other Guy
In the just-ended acrimonious debate over a stimulus package, one critical point was largely ignored by all parties—and the media as well. Both sides of this debate were expressing priorities that have to be appropriately addressed if we are to emerge whole from the present financial crisis.
The Republican opposition to the stimulus measure was totally wrong in the sense that we need to spend and spend copiously to somehow reanimate an increasingly slumping economy, This is not a time to skimp, even though it adds so greatly to federal deficits in the short run and to an already bloated federal debt that will one day have to be repaid.
Opposing stimulus now on what came across strongly as ideological grounds was foolish and very nearly destructive. The fact that born-again fiscal conservatives in Congress were the same people who so egregiously contributed to a previous surge of debt also made it appear hypocritical.
The let’s-just-ignore-debt crowd on the left is equally foolish. Just because the government pays such low interest on its new debt today because so many investors are seeking a safe heaven doesn’t mean this debt will always be cheap to finance. Indeed, when the economy does pick up, so will government borrowing costs. And then a crushing debt burden could have truly disastrous consequences.
So how should the big stimulus versus fiscal prudence debate be resolved? First, by a show of mutual respect for both sides about the validity of the other side’s arguments. And next with a very clear and very credible plan to reign in deficit spending immediately once the economy finally starts to pick up again.
We have to put an adult in charge of the on-off switch. When the many, many Americans who will have suffered in the down times demand that the newly arrived good times be let loose to run freely, the answer has to be no—not for years to come.
Today, the fiscal conservatives have to back away. Tomorrow, well-meaning free spenders have to do the same.