The message from the Tea Parties
There are two types of out lays and the ones that are the most troubling are in the stimulus package and the Obama budget and not in the bailouts. The bailouts have generated a great deal of antipathy, but we are seeing that we are already starting to get some of that money back. Financial institutions can't wait to give it back. Just look at Goldman Sachs on some of the big banks and see the terms of the TARP loans as inhibiting their profitability.
The banking collapse and the economic meltdown have prompted many Americans to turn to the federal government as indispensable savior, telling Congress and the president: We hope you can fix it; we want you to do whatever is necessary to fix it; and we don't care what it costs.
That was not the sentiment in evidence at the tea party protests held on Tax Day.
There, the message was one of great skepticism about the efficacy of the government's remedies and great apprehension about the expense (along with some of the extremist lunacy that accompanies any mass movement). The scale of the federal response to the crises has come as a frightening surprise to many Americans, who suspect the cure will be worse, and less transitory, than the disease.
Since last September, a federal budget that was already growing steadily suddenly accelerated out of control. The ride began in the winter of 2008, when Congress and President Bush agreed on a fiscal stimulus package of $170 billion in tax rebates and incentives. It picked up speed in the fall, when the Treasury spent $85 billion to take over insurance giant AIG and Congress approved $700 billion to rescue failing financial institutions.
By the time Barack Obama took office in January, projected federal outlays for this year had soared by nearly $1 trillion over last year, and the budget deficit had nearly quadrupled. But was that enough? Not nearly. Obama saw Bush and raised him, immediately pushing through another fiscal stimulus program with a price tag of $787 billion.Fiscal hawks thought the budget was out of control before. Now they look back on the pre-2008 profligacy as a golden age of budgetary restraint.
The amount of money involved in all this would be staggering to anyone not benumbed by the incessant torrent of bad news. But judging from the tea party protests, the numbness is not universal. No matter what the state of the economy, some Americans are still capable of being shocked to see trillions of federal dollars pouring out like water rushing over a broken dam. And like many reputable economists, they suspect most of it will be wasted.
The long term problems are buried in the Democrat Christmas Tree known as the stimulus bill. Fortunately, much of that can be turned around if we can convince voters to elect Republicans in 2010 and later. The Tea Parties are a start and Republican politicians need to find a way to tap into this grass roots objection to spending and the taxes that will inevitably follow.
A brief word about some of the media reaction to these events. Many liberals in the media used a crude homophobic characterization to describe people engaged in a sincere request for redress of grievances. That kind of action will only further alienate the liberal media from voters.