With negligible concern for repercussions, in three months Congress has injected the awesome sum of more than $2 trillion into our economy. It was painless, just pass the bills and everyone gets money. That was easy!
Except it does not work that way. The problem is that someone must pay those trillions back to whomever we got them from. What we have done in the way we got this money to spend was that as we staved off our own economic demise, we forced debt onto generations to come. It is sort of like we bought a fancy house for us all to live in and made our kids pay for it, but they will be prevented from ever getting to live in it. I understand the significance of why we did this, but I have not heard one word of remorse or a plan to mitigate the damage to future generations. Perhaps we were too afraid of not doing it, I do not know, but now we must live with ourselves.
Effectively the method we employed produces no return to the government or any other means of future economic benefit. And ironically, in our frenzy to spend these sums we neglected to be concerned that the manner we did so will be the cause of additional near-term detrimental effects. Borrowing so much and simply injecting it into the economy, with no possibility of economic benefit or growth, will within a few years cause serious inflation and high interest rates. So, though we perhaps saved the near term we have induced major problems to come. The specter of a 1930’s style depression with all of its trappings was just too much to accept and so borrow and spend we did.
But now, even before any short-term relief manifests itself and long before other problems could, the politicians are already lining up at the trough of “free money” to engorge themselves once again. From what has been discussed the newest proposal out of Washington is to once again rob from the future for more spending, but this time it will have little to do with averting a depression. The politicians have seen how easy it was to write checks against an empty checking account and they want more. And they know that, before the American people realize what damage we have already done, they must move fast on another spending package.
There are two parts to the next spending spree currently being discussed. One a blatant political money grab and one that at least offers the potential to pay for itself. The political money grab is made up of bailouts for profligate spending state governments, unrealistically over-generous pension plans, and other items that bear little or no relationship to our current crisis. These proposals represent the worst of American politics. They are literally theft from others, theft not to save the nation from catastrophe, but to satisfy short term political ends.
The other proposal is a massive infra-structure plan. While once again we would be asking our kids to pay for our failure to maintain modern infrastructure, at least these projects would, over time, directly benefit them. Infra-structure improvements offer the potential of sustained economic growth, resulting in enhanced government revenues. In effect infrastructure improvements will, over time, pay for themselves with new government revenues and with jobs for future generations.
Realistically we had no choice to save our economy other than what has been done. But we do have a choice going forward. We now, more than ever, have a moral obligation to our nation to prevent spend crazy politicians from undertaking more debt just to fund past bad practices. A decision to fund infrastructure, though burdensome for future generations, at least offers them something in return.
We have flattened the curve, now we must end the insanity of co-opting the well being of our children and grandchildren.