In Washington, Pretenders Reign And Truth-tellers Are Silenced

July 31, 2009|By Ron Smith

Looking at the history of runaway government spending, a disturbing pattern is readily discernible: There is never a lack of observers at a given time who understand the severity of the trouble at hand, but these people lack the power to cut costs and avert calamity. An observer at the time of Imperial Spain's unwinding more than three centuries ago commented on the failure of every attempt at real reform, writing, "Those who can will not and those who will cannot."

This truism is tested time and again through history. Ron Paul leaps to mind as a recent example of the learned person who knows the jig is up economically, has a pile of evidence as to why this is so, and yet is rewarded for his expertise with denunciation and contempt. Who can forget the reactions of his fellow GOP presidential candidates at their South Carolina debate when the diminutive congressman from Texas said the American empire is unsustainable and that our financial system was a train wreck waiting to happen? Rudy Giuliani denounced him, Fred Thompson looked at him like he had three heads, and the news media rushed to assure us that the man was a kook. Everything Ron Paul said that evening, in my opinion, was reality-based and accurate, but nothing is as disturbing as an unwelcome truth.

The former comptroller general of the United States, David Walker, found that out as he traveled the country earlier this decade warning of impending fiscal doom, something he could do because as the nation's chief accountant, serving a 15-year term, he didn't need to play make-believe. He warned of a "demographic tsunami" that would come as the baby-boomer generation began to retire from the work force. He pointed out that borrowing money from foreign lenders to pay for the operation of the U.S. government was a fool's game. He urged Americans to pay attention, to understand the severity of the problem. After a time, having done his best to sound the alarm, Mr. Walker resigned his post and moved on.

It's necessary to understand that virtually everyone in official Washington knows the story. They know that economic disaster lies ahead if nothing meaningful is done to change our fiscal practices. But those who at least theoretically have the power to make such changes will not do it because the needed remedies are not politically palatable since they would necessarily mean less government largesse and higher taxes, a lethal potion for politicians to sip.

So they pretend. They pretend, as Dick Cheney maintained, that "deficits don't matter." They pretend that savings will be seen, that fiscal responsibility will be restored - but always later, always "down the road." They pretend we can afford to police the world forever. They even talk about expanding our stressed-out army, whose soldiers endure repeated combat tours in Iraq and Afghanistan. The Pentagon and its web of suppliers is above all a money machine, the military/industrial/(congressional) complex whose influence President Dwight Eisenhower warned us about in his 1960 farewell address.

Let's return to an earlier empire that spent itself into oblivion. Spain was the great power of the early modern world. It had its own confluence of powerful interests that successfully resisted all attempts to cut costs - the bureaucracy, the military, the church and the nobility saw to it that the spending continued to ratchet upward. Taxes were tripled between 1556 and 1577. In his book The Great Reckoning, Jim Davidson points out, "The deficit rose, even as Phillip II's 'six hundred ship navy,' the Armada, sank. By 1600, interest on the national debt took 40 percent of the budget. Spain descended into bankruptcy and never recovered."

Can this kind of thing happen in modern times, in a global economy? We'd like to think not, but history tells us nothing, in the end, is too big to fail.

Ron Smith can be heard weekdays, 3 p.m. to 6 p.m., on 1090 WBAL-AM and WBAL.com. His column appears Fridays in The Baltimore Sun. His e-mail is rsmith@wbal.com.

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