So it has come to this –lawmak ers staring down a debt impasse in the dog days of summer.
All the while, liberals continue to lament the fact that Uncle Sam didn’t spend his way into even more debt in the wake of the financial crisis.
Paul Krugman leads the charge on the left. In a column on Friday, he declared, without irony: “Everything might still have been okay if other major economic players had stepped up their spending, filling the gap left by the housing plunge and the consumer pullback. But nobody did.”
Really?
Here are the unvarnished numbers, courtesy of economist Lacy Hunt: “In the three years 2009, 2010, 2011, US federal spending was an astounding $2.2 trillion more than in the three years ending 2008.”
The deficit in the first three years of the Barack Obama administration will total 28.3 percent of GDP, versus 6.3 percent the last three years President Bush was in the White House.
Looked at another way, if the Obama-era spending increases had just been cut in half to, say, $1.1 trillion extra, the president wouldn’t have had to even face a debt-ceiling debate until a second term.
Yet here we are with our once-pristine credit rating under siege and an economy that is growing about one-third as fast as in other post-recession recoveries. Unemployment is on an upswing, and this week the grim specter of mass layoff announcements returned, with Cisco, Lockheed Martin and Borders adding 23,000 to the ranks of the unemployed.
Why didn’t the massive federal stimulus work, and why is it the last thing we need more of in the summer of 2011? Hunt, long one of the best economic forecasters on the Street, puts it succinctly: “In the broadest sense, monetary and fiscal policies have failed because government financial transactions are not the key to prosperity. Instead, the economic well-being of a country is determined by the creativity, inventiveness and hard work of its households and individuals.”