President Obama’s policies aren’t just harmful to the economy, they’re undermining America’s morale. On Tuesday, Mr. Obama referred to congressional Republicans as “hostage-takers” for resisting White House efforts to increase taxes. He then gave in to GOP demands, explaining, “I think it’s tempting not to negotiate with hostage-takers, unless the hostage gets harmed.” One can only hope that Osama bin Laden was unable to tune in to a press conference in which the president of the United States delivered the weakest appraisal of how to handle a hostage situation since the mansion at 1600 Pennsylvania Avenue was inhabited by a Georgia peanut farmer.
The weakness extends to the world stage where Mr. Obama has apologized for America’s failure to appreciate Europe’s “leading role in the world.” He bows before foreign leaders, including a Saudi king, a Japanese emperor and China’s President Hu Jintao. It’s no wonder, then, that on Wednesday a National Journal poll found that Americans mistakenly believe our economy lacks the strength found in China‘s. According to the survey, only one out of five Americans rated the United States as the world’s strongest economic power; nearly half thought that honor belonged to the Middle Kingdom.
Never mind that the output of 310 million Americans far exceeds the wealth generation capacity of the 1.6 billion souls living in Japan, China and Germany combined. What the U.S. public sees is a president who talks down his own country’s greatness and talks up that of our largest creditor. China currently owns $1 trillion in U.S. debt in the form of Treasury bonds and notes. While this certainly is a large sum, it’s not even a third of the staggering $3,211,613,265,584.56 in red ink added to the nation’s ledgers under Mr. Obama’s watch.
A new Republican majority in the House of Representatives and a powerful bloc of Tea Party-inspired freshman in the Senate have a chance to do something about this state of affairs. In February, Congress set the limit on the amount of money the U.S. government could borrow to $14.3 trillion, an amount that - at current spending levels - will be exhausted before the end of March. That gives Republicans a unique opportunity to block further deficit spending by refusing to authorize any further borrowing. It is a nuclear option.
Even Ronald Reagan as president didn’t dare risk the full faith and credit of the United States by allowing a default on the federal government’s debt obligations. Democrats at the time used this to their advantage, securing significant spending and tax-hike concessions from the Gipper. Now that the tables are turned, Republicans should hold firm against raising the debt ceiling without a legally binding commitment to bring spending across the board down to 2005 levels - the amount needed to bring the books into balance. Doing so will eliminate the need for further long-term borrowing.
While the left will prattle about how spending “only” $2.5 trillion of the public’s money would constitute a devastating blow to education and “the poor,” the reality is America cannot continue the present spending spree. Going into this budgetary showdown, Republicans who hold firm can count on a singular advantage that guarantees victory: They know how this president deals with hostage situations.
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By Douglas Holtz-Eakin
The young drop coverage to avoid higher premiums