- The Washington Times - Sunday, July 26, 2009


Big new taxes. Big new spending. Big new government. This seems to be the proposed cure for the Wall Street-inspired recession.

The government now runs major banks and companies and plans to take control of the American health care system. It also aims to tax how energy in the United States is used to monitor carbon use.

But wait! Recent financial rescue and stimulus plans, together with other new government initiatives, already have led to the largest dollar deficits in American history, projected to be near $2 trillion at fiscal year’s end.

Before some of these new proposals are even enacted, public spending will eat up 45 percent of our gross domestic product — the largest percentage in our history except for the war years 1943-45. And in two years — or even less — our national debt will soar to 100 percent of GDP. Yet the pie shrinks even as we promise more slices.

Recent Rasmussen and Politico polls show that voters still like the embattled President Obama — but not so much his new policies on the stimulus, cap-and-trade and further regulations on business. Why?

First, our present troubles were not just a result of Wall Street’s undeniable graft, and bigger government isn’t necessarily the proper cure.

The incompetence of the government-run Freddie Mac and Fannie Mae — staffed by greedy Washington political insiders and overseen by blowhard politicians such as Rep. Barney Frank, Massachusetts Democrat — first triggered the September 2008 meltdown. If the present growth in government regulation is a response to avaricious bankers and investors, what is the proper antidote to the chicanery of the government-run Freddie and Fannie?

Second, well more than 40 percent of American households do not pay federal income taxes and so traditionally don’t mind getting more entitlements for which they don’t have to pay. That could change soon.

With such staggering deficits, it’s becoming more difficult to believe Mr. Obama can keep his campaign promise that 95 percent of taxpayers will not have to pay new taxes. There just are not enough wealthy sheep to shear — despite an array of new federal, payroll and state taxes.

Third, for all the spread-the-wealth talk, the new government overseers do not think the rules apply to themselves. News accounts highlight the expensive entertainment, dining and clothing tastes of the first couple.

Remember also that Treasury Secretary Timothy F. Geithner, who oversees the Internal Revenue Service, avoided thousands of dollars of his own tax obligations. So did some in Congress, including New York Democratic Rep. Charles B. Rangel, head of the House Ways and Means Committee, and a number of others nominated to the Obama Cabinet.

In other words, we typically are not seeing big-government grandees with lifestyles to match their populist rhetoric.

Fourth, it’s hard to accept the notion that the government can do things better than the private sector. If the government controls health care, will doctors’ waiting rooms soon resemble the dreaded Department of Motor Vehicles offices? Will cap-and-trade bureaucrats daily monitor our life-giving electricity-producing plants to ensure they don’t have too large a carbon footprint?

Finally, even after the financial meltdown, history is still running against collectivism. Communism self-imploded. Socialism doesn’t work in Venezuela. Even in the midst of bank collapses, European statist governments are moving rightward, not more to the left.

It’s clear that Americans are angry at Wall Street crooks and corporate elites who took megabonuses despite falling profits. But why does that mean the government, in its quest for more regulation, targets job-producing small and family businesses with steep new taxes and health care regulations?

In other words, the medicine of big government is even worse than the original disease on Wall Street, and the falling polls for the president’s initiatives show the American people are catching on to this.

Victor Davis Hanson is a classicist and historian at Stanford University’s Hoover Institution and author, most recently, of “A War Like No Other: How the Athenians and Spartans Fought the Peloponnesian War.”

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