Anyone who doubts that the Bush and Obama administrations collectively transformed America into a socialist state should consider this - for every dollar American citizens generated last year, the federal bailout consumed more than 90 cents in outlays, loans and commitments.
Bloomberg News has tallied Washington’s spending and promises as it props up banks, insurers, automakers and seemingly everyone except hardworking taxpayers who promptly pay their bills. Bloomberg deserves great credit for focusing on this constantly moving target.
In its latest estimate, Bloomberg correspondents Mark Pittman and Bob Ivry reported on Tuesday that the Federal Reserve, Treasury, Federal Deposit Insurance Corp. and the Department of Housing and Urban Development have saddled taxpayers with $12.8 trillion so far. America’s 2008 gross domestic product was $14.2 trillion. Hence, the federal bailout now equals 90.14 percent of GDP. If that is not socialism, what is?
This $12,798,140,000,000 costs every American man, woman, boy and girl $42,105. A family of four’s share of the bailout equals $168,420. Bloomberg reckons this $12.8 trillion invoice is more than 14 times the $899.8 billion in U.S. currency coursing through the economy. This signals inflation ahead.
The only glimmer of good news is that actual outlays are only $4,169,710,000,000 to date. Think of the bailout as $4.17 trillion in spending on a credit card with a $12.8 trillion limit. While the bailout ultimately may not reach that higher figure, taxpayers are exposed up to that level.
One unintended consequence of these unfathomable sums is that they have made it almost cute to complain about federal expenditures of mere millions or even billions of dollars. It now takes an Easter parade of zeroes to capture the public’s attention, much less unleash its outrage.
Given these enormous allocations, one would hope Washington budgeteers otherwise would display a scintilla of fiscal restraint. OK, stop laughing.
Congress and the White House are as prudent as a family that greets a huge, emergency roof-repair bill by visiting gourmet bistros, booking Caribbean cruises and buying Maseratis for the teenagers.
President Obama‘s 2010 budget increases federal spending 23 percent above 2008 levels. This far outruns this period’s estimated 1 percent inflation rate, Heritage Foundation analyst Brian Riedl figures. Mr. Obama exacerbates George W. Bush‘s disastrous policy of boosting spending by a multiple of inflation; in Mr. Bush’s case, triple the 20 percent inflation rate from 2001-08. Had Mr. Bush’s spending paralleled inflation, rather than grow 60 percent, last year’s budget would have been $2.236 trillion. Instead, it was $2.983 trillion, costing taxpayers another $747 billion.
For its part, Congress exhibits all the maturity and self-restraint of college freshmen on spring break. Its 1,071-page, $787 billion “stimulus” bill includes $7.2 billion for broadband deployment. Can’t Verizon or Time-Warner Cable fund this? The 2,967-page, $410 billion omnibus spending measure includes $7.7 billion for 9,287 earmarks that range from comical to grotesque. Why did Congress charge taxpayers $6.6 million for termite research? Couldn’t Terminix and Weyerhaeuser split that tab?
The House on Wednesday defeated for the seventh time Arizona Republican Jeff Flake’s resolution instructing the Ethics Committee to investigate the nexus between campaign contributions and earmarks. Mr. Flake points to the PMA Group’s $3.3 million in political donations to some 100 members of Congress. This lobbying outfit scored $300 million in earmarks for its clients just in last year’s defense appropriations bill. What a sizzling return on an investment!
Meanwhile, President Obama just swapped CEOs at General Motors Corp. as if replacing steel radials. He also announced that Uncle Sam will guarantee GM’s auto-repair warranties. “The United States government has no interest in running GM,” Mr. Obama insisted.
Treasury Secretary Timothy F. Geithner told CBS that he “of course” envisions Washington sacking bailed-out bank CEOs who displease Team Obama.
In a likely glimpse of coming attractions, Mr. Geithner noted March 25 that “the great risk in financial crises is that governments underdo it, not overdo it.” Citing Mexico’s former President Ernesto Zedillo, Mr. Geithner explained: “Markets overreact, so policy has to overreact.”
Deroy Murdock is a columnist with Scripps Howard News Service and a media fellow with Stanford University’s Hoover Institution.