Herman

Cain

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December 29, 2008

Obama’s Big Mistake: ‘Deficits Don’t Matter’

President-elect Barack Obama has made a big mistake that, as usual, the mainstream media has given him a pass on by not making a big deal about it.

It’s not his cabinet nominations, which the mainstream media are all gushy about. It’s not whether he or any of his staff can be linked to the sale of his Illinois Senate seat by “caught red-handed but I didn’t do it” Gov. Rod Blagojevich.

And it is certainly not who Obama has chosen to pray at his inauguration. It’s his inauguration for peace sake!

“We can’t worry, short-term, about the deficit” is what Obama stated two weeks ago on Meet The Press. Deficits don’t matter.

Big mistake!

That is the last message that needs to be sent to a spend-happy Congress controlled by Democrats, where trillion has become the new billion.

When Vice President-elect Joe Biden was asked about the “deficits don’t matter” statement a week later on a different show, he defended it with pride by saying that their first priority is to get the economy moving again.

Let’s try a few metaphors to shed some light on the misguided thinking that “deficits don’t matter”: Pouring gasoline on a fire, giving a six-year-old kid a loaded gun or giving a shopping mall maniac a no-limit credit card.

If you destroy the economy it will never get moving again.

Economist Brian Wesbury published an article on his web site, dated December 8, 2008, explaining the folly of “deficits don’t matter” thinking. More importantly, he described several alternatives for stimulating the economy with something other than another “toothless” stimulus package.

Wesbury’s suggestions included eliminating corporate taxes altogether during most of 2009, a 50 percent reduction in individual income taxes, or allowing full expensing of equipment and investments made by businesses.

Those ideas would keep billions of dollars directly in the economy, rather than funneling those dollars through the federal government to become polluted with pet political projects and the usual inefficiencies.

Of course none of those ideas would appeal to Harry Reid, Nancy Pelosi and the other liberals who believe in more taxes, bigger government and less individual responsibility.

Congress has collectively been in denial for decades that deficits do matter. This is why we have over $50 trillion in unfunded liabilities associated with Social Security, Medicare and Medicaid.

This is also why we have a growing national debt in excess of $10 trillion, while partisan political fanatics focus more on who is to blame than what to do to fix the problem.

One of any president’s responsibilities is to set the tone for the direction of the country, and the tone for how we should deal with our most pressing issues. Sending Congress a message that deficits don’t matter is way off key.

We are all hopeful that Obama will be a successful president. The nation needs him to be successful, and it is unrealistic to expect him to be perfect in all of his decisions. He will make some mistakes.

But a big mistake before he even takes office is not encouraging.

Deficits do matter. Business and economic history books are littered with casualties who believed otherwise.  

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