Crisis
of the Government Party by Patrick J. Buchanan
- January 30, 2010
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.