Anyone expecting Rick Perry to ease up on the throttle a bit as a presidential contender will likely be disappointed with his remarks yesterday in New Hampshire — but Republicans will likely be delighted, even if they’re not on board with Perry. The Boston Herald followed Perry’s trip in New Hampshire, where the Texas governor wants to challenge Mitt Romney in his strongest state, where Perry took aim more at Obama and the President’s call for a kinder, gentler campaign:
“The rhetoric will probably get heated. I’m going to be outspoken, I’m going to be passionate, I’m going to be calling it like I see it,” Perry told the Herald in a one-on-one interview, as he shrugged off Obama’s recent scolding that he should be “more careful” about what he says.
“And if I hurt the president’s feelings, well, with all due respect, I love my country and I love future generations more than I care about his feelings,” the 61-year-old governor added.
Perry, who embraced the Tea Party even before GOP presidential hopeful Michele Bachmann, also brushed off Democratic attempts to paint him as a marginal candidate.
“It’s the height of hypocrisy for this president to call anyone a marginal performer. If anyone is a marginal performer, it’s him. He has downgraded the good name and credit of this country,” Perry said. “Talk about someone who has marginalized America.”
Republicans will also like remarks captured in this Boston Herald video about the “experiment” with the American economy, conducted by Obama and his administration. Perry calls it a “terrible, terrible failure,” and pledges to appoint pro-business administrators to agencies, especially the EPA:
Other economists, like the University of Chicago’s Raghuram Rajan, are staunchly anti-inflation. For one thing, argues Rajan, reducing debt by raising inflation would only work if the central bank ratcheted up inflation very quickly. A slow rise in inflation, by contrast, would give our lenders too much time to demand higher interest rates on our debt, and the net effect wouldn’t do much to reduce our overall obligations. A big bout of inflation would also be hard to contain, since markets might stop believing the central bank’s mandate to keep inflation low when the needed bout was over.
Then there are problems with who would benefit from this engineered money printing. Americans borrowing for the long term could actually be worse off, if their wages didn’t keep up with skyrocketing costs, like higher food and gas prices. …
At the end of the day, it’s the foreign holders of U.S. debt (China, Japan, etc.) we’d want to target to inflate away U.S. debt. But even that could have repercussions, since we might still need foreign creditors to fund our future deficits. And those deficits would be even more troublesome if higher inflation stuck around. Roughly half of all federal debt in the next decade is for Social Security, Medicare and Medicaid, which, unlike foreign-held U.S. debt, all rise with inflation.
Now, no one can say where this higher-inflation path would certainly lead. But given all the risks involved, the question is whether it’s worth it, especially since there are other ways of sloughing off debt to catalyze growth.
Former Reagan budget director David Stockman says there is no maybe about it, Perry is absolutely correct — and that a day of reckoning is quickly approaching:
“I think he was dead on in his thought,” the former director of the Office of Management and Budget in the Reagan administration tells Aaron Task in the accompanying clip. “I think it’s time Republicans woke up to the fact that is the fundamental problem in our economy today.”
Stockman, who has long been a critic of the Fed’s low interest rate policy, says it is “totally wrong.” Stockman says “exceptionally low” interest rates have resulted in excessive speculation on Wall Street “that is utterly destroying our capital markets” and adding to the already unsustainable debt crisis. He goes on to say, “The fact is the Fed is the number one problem holding back this economy, punishing savers, savaging low income people trying to buy food, energy or fuel.”
Stockman fears the worst is yet to come when current tax breaks and stimulus come to an end in 2013. “The mother of all Keynesian contractions is coming in 2013 — when all these tax cuts expire, when all this stimulus is gone.”
The New York Post’s editors concur:
Stipulated: Perry’s words fall heavily upon the ears.
On substance, however, Gov. Perry was quite right. For whatever purpose — policy or politics — simply printing money in large amounts is a recipe for catastrophe. (The stock market barely tread water yesterday on reports of a major inflation uptick.)
Indeed, the substance of Perry’s message was so unremarkable as to go largely uncriticized.
And to a certain extent, overlooked by the rhetoric — which is another reason that it was a poor choice. Perry has the right idea on policy, though, and he needs to keep pressing the issue.