Communicating the Financial Disaster

By Dr. Paul Kengor
FrontPageMagazine.com | 3/30/2009

Newsflash, March 20, 2009: The Congressional Budget Office today
forecast a U.S. budget deficit of $1.8 trillion for this year.

For many Americans, including some Democrats, there’s tremendous
frustration over President Obama’s economic policies. Worse, they know
that a huge portion of the public and media so adore Obama that they
will not question anything he says or does, even as he pursues a
course that previous presidents—including Democrats like Bill Clinton—
would never have considered. Add to this the horrendous failure of our
educational system—a failure to teach market economics—and we have a
major challenge on our hands.

How do we communicate the depths of the nation’s fiscal depravity? How
do we simply—very, very simply—explain the mindboggling generational
debt being produced right now by President Obama and the Democratic
Congress?

Communicating this is crucial because Obama and the Congress, along
with their supporters and media, are trying to blame this calamity on
George W. Bush. Logically, of course, that is impossible. Politically,
it will likely be accomplished—unless we can communicate the reality.

Since we live in a world of sound-bites, here’s how to present the
argument in two basic lines:

President Bush, yes, spent money like a drunken sailor, and left the
nation with a record $400-billion deficit. President Obama, however,
is spending far more money than Bush, with a record $1.8-trillion
deficit projected for his first year.

Period. Repeat that statement. Repeat it to those who don’t
understand, or don’t wish to understand. Repeat it until you’re blue
in the face. Make the person on the receiving end recite the numbers:
$400 billion vs. $1.8 trillion.

Anyone can understand that math. From there, you can elaborate, if you
desire, explaining how Obama’s deficit is a direct result of spending
programs, like the $800-billion “stimulus,” like the $400-billion
package that followed, and so on. The subsequent prolonged economic
slowdown will pad the deficit more. The tax increases imposed to cut
the deficit will further cripple the economy, ballooning the deficit
and wider debt. The damage still to come from printing obscene amounts
of new money will be inflationary and make all this yet worse.

Those are things that should be pointed out when trying to explain
what Obama and the Congressional leadership have done in merely eight
weeks.

And it cannot be emphasized enough that no president in American
history—certainly not George W. Bush—has spent this much money in such
a short period. These are the same politicians demonizing the private
sector for fiscal irresponsibility. In fact, AIG is a paragon of
parsimony compared to the politicians currently running America.

Make those arguments, too. But stick to the script:

President Bush, yes, spent money like a drunken sailor, and left the
nation with a record $400-billion deficit. President Obama, however,
is spending far more money than Bush, with a record $1.8-trillion
deficit projected for his first year.

An American public that has not been taught basic economics—and that
includes journalists—is not ready for theories from the Monetarists,
from Friedman, from the Austrian School, from Hayek and Mises. When
Lawrence Summers cites John Maynard Keynes as his model for what Obama
is doing, it falls on deaf ears. The vast majority of our college
graduates, not to mention politicians, have no idea of the core
differences between Marx’s Communist Manifesto and Adam Smith’s The
Wealth of Nations. (For the recent Intercollegiate Studies Institute
survey on economic and civic literacy, click here.)

We cannot suddenly, over the next four years, make up for decades of
failed education in how successful economies function.

Please, I don’t mean to be condescending. My point is to acknowledge
these extremely troubling—and destructive—realities, so we can figure
out how to respond.

I’d like to share a closing illustration: I heard a caller on a talk-
radio show screaming that George W. Bush was responsible for these
deficits. The host calmly asked the caller if he knew the amount of
the deficit that Bush left behind. The caller tried to dodge the
question—he clearly didn’t know the answer. The host pushed. Finally,
the caller yelled: “Yes, Bush left a deficit of $2 billion!”

The caller figured he had picked an obscenely high figure. Hardly. If
President Bush had left a deficit of $2 billion, he would be hailed
for his fiscal management. That amount is so small that there would be
a consensus that Bush had, in effect, left a balanced budget—like what
he had inherited from his Democratic predecessor.

No, caller. Believe it or not, Bush did far worse—way beyond what you
can imagine at the height of your outrage. And guess what? Obama’s
deficit in eight weeks, not eight years, is projected to be more than
four times worse. Forget $2 billion—how about nearly $2 trillion?

One more time:

President Bush, yes, spent money like a drunken sailor, and left the
nation with a record $400-billion deficit. President Obama, however,
is spending far more money than Bush, with a record $1.8-trillion
deficit projected for his first year.

It isn’t rocket science. It is truth—a frightening truth. It is a
crying shame. And America’s citizens desperately need to understand it
so they can stop electing—and excusing—this kind of insanity.

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