To Pork Or Not To Pork?
No, I haven’t suddenly turned the reins over to the foul-mouthed Nutroots®; I’m asking a real question. Jay Cost makes the case today for pork as an essential part of the localized nature of Congress. Cost, as always, makes some excellent points…but I’m afraid I can’t endorse his conclusions.
Cost sees the choice as follows:
…I am to be counted as one of the few defenders of pork. Is it a good in itself? No, of course not. It is, however, a consequence, an unfortunate side effect, of an otherwise very excellent system of government. As getting rid of pork requires one to tinker around with the system, I prefer pork.
Thus, no term limits, no getting rid of earmarks, no tinkering with the American system of government.
I can’t be that sanguine. I am beginning to feel that we are on the precipice of a major financial crisis. I mentioned before that I am reading Getting America Right: The True Conservative Values Our Nation Needs Today
We are forgetting the message of small government (though some disagree – see, for example, Paul Krugman and Orin Judd). I’m not prepared to go as far as Peggy Noonan: I was a Bush supporter, and I remain one. I give the President much leeway – he has had to deal with 9/11, Katrina, and two wars. In light of these unanticipated events, however, did we need a prescription drug benefit now?
The point is that, as attractive as Cost’s defense of the American way is, a change is gonna come. It’s going to be hard either way, but if we do nothing, it will be a damn sight harder. There are two huge reasons why the status quo will collapse: (1) the housing bubble, and (2) the federal debt. As deficits rise, government borrows more, crowding out productive private sector borrowing and forcing corporations to offer higher interest rates to attract investment money. An incredibly large portion of the typical American’s net wealth is tied up in housing values, and refinancing has added trillions to consumer spending. Interest rates are rising, though, and the housing bubble may collapse – and if it does, we may – MAY – face a giant crisis that makes our currency less attractive, with the treasury forced to raise interest rates even higher to attract the money needed to finance our debt.
It’s a doomsday scenario, and it may not come to pass – but the mere possibility should be enough to wake us up out of the big spending slumber. We’ll return to this topic again soon…
Hi Mark,
In government policy, as in life, continuing on the same path has consequences and altering the path also has consequences.
If our government continues to borrow and spend, inflation will reduce and even eliminate the chance of a housing bust because while houses will still sell for the same price, the value of money will be less. Also, it will be easier for our government to pay back dollars at the inflated value than the current value.
However, lenders will need to charge more to lend money, and borrowers, including government, will need to pay more to borrow money. Therefore, the growth of government and the growth of the economy will be stymied.
Practically any change to any government policy, not just spending, will help some and hurt others.
Pork spending is a huge threat to democracy, not because government money is being borrowed and spent, but because our collective money is being used to reward campaign contributors. Pork spending is by definition corruption, and should be restricted as much as possible.
Barbara Boxer and Diane Feinstein both fight like crazy to keep military bases in California open even though neither one of them would ever support the use of the military for an important purpose.
David, excellent points – I’m a strong believer in the self-correcting mechanism of the free market – of course, I’m still looking for the free market. Hopefully, we’re close enough to one to avoid the doom and gloom – but I’m very concerned, particularly about the amount of household wealth tied up in housing…
Hi Mark,
The price of homes in many parts of the country, including Southern California where I own a home, defies logic. A housing bust would be a catastrophic scenario for many people including myself. As a mostly-libertarian I do not like all of the taxing, borrowing, spending, and regulating done by governments at all levels. However, I do recognize that government spending is not a separate part of our economy, it is a regular part of our economy. Recent government borrowing and spending has contributed to the growth of the economy, just as borrowing and spending helped the Reagan economy in the mid eighties.
The borrowing and spending done by the Federal Government in the Bush years has contributed to the increase in the price of houses in many parts of America. If government all of a sudden stopped borrowing, which they won’t, there would be a housing bust because the private sector would not immediately step in and start expanding. Also, if government all of a sudden increased taxes, there would be a housing bust because the demand for new houses and existing houses would be suppressed.
Therefore, the best scenario, from the perspective of an over-extended home owner, is for the government to gradually reduce borrowing and spending and allow the private sector to take up the slack. Most voters, even Republicans, seem to be making more demands, not less demands, on government so the scenario I envision is increased inflation and decreased buying power. No doomsday, just paying the piper for lack of discipline.