Spending isn’t the answer
The U.S. economy may no longer be in recession, but just about no one would claim that more than a modest recovery from a protracted downturn has been achieved.
Politicians in the nation’s capital fall basically into two philosophical schools with regard to how best to restore prosperity and put the far-too-many unemployed and underemployed Americans back to work.
Some believe that the federal government should increase spending even if that requires deficit spending. They argue that this is necessary to stimulate economic growth. Others counter that the cause of the economic woes is federal spending that is not sustainable without higher taxes. The solution they advocate is reducing federal outlays – or at least the growth in those outlays.
Sen. Charles Grassley is clearly in the latter category.
The Iowa Republican took to the floor of the U.S. Senate on June 25 to explain why his approach is the better choice for America. His remarks referenced heavily the current economic troubles in Europe and cautioned that our nation could be headed for a similar crisis if we do not learn from the past mistakes that have been made both in this country and abroad.
“For Europeans who have grown accustomed to generous social benefits, even modest reforms to government programs are apparently cause to take to the streets,” Grassley said. “But, for the millions of Americans who still believe in limited government and who do not feel entitled to programs or benefits paid for by the earnings of others, there’s nothing ‘austere’ about government spending within its means.”
The senator believes strongly that keeping spending in line with government revenues is the key to long-term prosperity. He contends that those in government and elsewhere who claim that economic growth and frugal spending are incompatible are quite simply mistaken.
The lesson of the stimulus – spending in excess of revenues – programs of the Obama administration is that the desired growth outcome didn’t materialize. The senator argues persuasively that this approach failed because it represented a misdiagnosis of the problem.
“Not only didn’t it work, but it made things worse,” Grassley said. “All that government spending crowded out private sector activity that would have helped the recovery and saddled our economy and our grandchildren with even more debt. Conversely, reining in government spending will unleash the power of free enterprise to create wealth and grow our economy in ways that no government central planner can.”
That, of course, is at the heart of the debate between conservatives, such as Grassley, and those who assert more government programs are the key to prosperity. Grassley argues that keeping resources in the private sector is a better growth strategy than increasing the proportion of the economy devoted to governmental projects.
“If spending money like water was the answer to our country’s problems, we would have no problems now. If ever a nation has spent, spent, spent and spent again, ours has,” Grassley said. “Today that dream is over. All of that money has got us nowhere but it still has to come from somewhere.”
The senator has a straightforward response to those who claim spending discipline is a heartless approach.
“Those who urge us to relax the squeeze, to spend yet more money indiscriminately in the belief that it will help the unemployed and the small businessman are not being kind, or compassionate, or caring. They are not the friends of the unemployed or the small business. They are asking us to do again the very thing that caused the problems in the first place.”
Farm News agrees strongly.
Building an economic future based on a firm commitment to the private sector as the engine of growth is by far the best game plan for this nation. Overreliance on government solutions has weakened the American economy. Continuing down that path would be a tragic mistake.
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