How often does a conservative Republican say in public, “I actually agree with Europe”? Perhaps only when the current President insists on setting a economic-policy course that tacks to Europe’s left. The EU wants to start scaling back government spending in order to stabilize its precarious debt position, but Barack Obama warned them today to keep the spigots wide open. Rep. Paul Ryan says it’s just a cover to get progressive wish-list programs into law by exploiting the economic crisis:
A few key quotes:
We are doubling down on this neo-Keynesian borrow and spend spree. It’s not working. We’ve lost 3.6 million jobs since the last stimulus was passed and they want to do more of the same. Bailing out state governments is the next roll of the dice. We are copying European economic policies of the past and that is going to give us a European kind of debt crisis in the future if we don’t change our policies. Yet the President is doubling down, giving us a big debt hangover. …
The President got those same centrist Democrats to vote for a budget that doubles our debt in five years and triples our debt in ten years. He got those same centrist Democrats to vote for $1.8 trillion dollars in new spending and $670 billion in new taxes in this session of Congress. He has always gotten, along with Speaker Pelosi, the votes needed to engage in their continued spending spree. …
What we have right now is a neo-Keynesian model being pushed, which means spend, spend, spend — and they still have no problem with all of these tax increases. This economic doctrine conveniently fits a political ideology. This political agenda is built upon building government programs, building up spending — and they use this economic doctrine to satisfy their political pent up demand. The so-called “stimulus” was not about jobs as much as it was spending money on all these programs that they have wanted to spend on for a long time. Now that they have Congress and the White House, the spending spigot is wide open.
The New York Times reports that Obama is feeling a little lonely on the Big Spender front:
President Obama signaled on Friday that countries in Europe should not withdraw their extraordinary spending programs too quickly.
In a public letter to other leaders of the Group of 20 nations in advance of a summit meeting in Toronto next week, Mr. Obama wrote, “Our highest priority in Toronto must be to safeguard and strengthen the recovery.” …
Mr. Obama also wrote, “We must be flexible in adjusting the pace of consolidation and learn from the consequential mistakes of the past when stimulus was too quickly withdrawn and resulted in renewed economic hardships and recession.”
That statement represented a signal to Germany and other European countries, which have moved in recent weeks to pare spending, mindful of the wrenching consequences of excessive public debts in Greece, Portugal and Spain. The United States is trying to pare its own substantial deficit. Mr. Obama reiterated a pledge to cut the deficit, now about 10 percent of gross domestic product, in half by the 2013 fiscal year, and to 3 percent of G.D.P. by the 2015 fiscal year, a level he said would “stabilize the debt-to-G.D.P. ratio at an acceptable level” by then.
But American officials are concerned that fiscal retrenchment by too many countries at once could imperil the global recovery.
They’re probably not too concerned that the US will stop spending, not with this Congress and White House. The problem is that the spending spree isn’t working. In fact, it’s counterproductive, as it sends strong signals of pending tax increases and higher costs in the near- and long-term future. Those with capital are sheltering it rather than investing, and as a result businesses are not expanding or creating new opportunities.
Europe has already learned its lesson, thanks to a painful bailout of Greece that may or may not succeed, and the likelihood that they’ll have to rescue Spain as well. The Obama administration has not.