How Republicans are Bad For a Good Economy

How Republicans Have Proven Themselves to Be Bad For a Good Economy
By JOHN W. DEAN
Find Law
Friday, Feb. 08, 2008

Our country's best and brightest economists have, for over a decade now, been traveling the land to warn of the coming economic crisis. Championing this cause are a number of former government officials, both Republicans and Democrats, who have gathered at the Concord Coalition. Former senators Sam Nunn and Warren Rudman, former Fed chairman Paul Volcker, former Secretary of the Treasury (during the Clinton Administration) Bob Rubin, and former Secretary of Commerce (during the Nixon Administration) Peter Peterson together constitute the bipartisan coalition.

Peterson, a founding partner in the Blackstone Group, which manages some $80 billion dollars for investors, started the Concord Coalition in 1992. He knows his way around the economy, and since the Reagan and Bush I years, he has been expressing his concern about the way Republicans have handled it.

Peterson's most recent book, Running On Empty: How the Democratic and Republican Parties Are Bankrupting Our Future and What Americans Can Do About It (2005), along with the reports that are regularly issued by the Concord Coalition, give the distinct impression that the Republicans have not been good for our economy. While this material tries to be evenhanded in its critique, there is no escaping the fact that the Republicans have become fiscally irresponsible.

Peterson's Running On Empty

Peterson's book is a good read, if you want to learn the bad news. Like many savvy businesspeople and economists, he worries particularly about the excessive debt and deficits Republicans have created. (His principal criticism of Democrats, in contrast, is their refusal to end entitlements -- not that Republicans have done so, either.) As a Republican, he was proud of the long tradition of fiscal responsibility, for they once had no hesitation to cut spending or hike taxes, since the party abhorred deficits that burdened future generations.

Fiscal responsibility, however, is no longer the guiding conviction of Republican leaders. For the last quarter century, since Ronald Reagan arrived in the White House, Peterson writes, Republican leaders have been oblivious to the devastation that deficits bring. "Deficits have become like aspirin," he explains of their thinking, "a sort of fiscal wonder drug. We should take them regularly just to stay healthy and take lots of them whenever we're feeling out of sorts." (Peterson doesn't say it, but while aspirin is not lethal, it can be deadly when you are bleeding badly, as is our economy.)

Peterson devotes a chapter to explaining "How the Republicans Got Us Much Deeper [With Democratic Help]" - with their tax-cutting mania and undisciplined spending. And he finds George W. Bush's performance "breathtaking" in his ability to turn what was a projected federal surplus of $5.6 trillion, when he arrived, upside down and into an even greater deficit. It is not easy to dispose of over $10 trillion. As Peterson also notes, hard accounting numbers would show that, in fact, the deficit is even greater than Bush projects, and the problems created by excessive government debt are exacerbated by the failure of Americans generally to save, rather to opt for personal debt.

Where is all this going? Peterson's title makes it clear that unless business as usual is changed, our nation will ultimately become bankrupt. He offers solutions and suggestions, but he reports, "I have spoken with a large number of senior leaders, both public and private. And I'm alarmed by the number who tell me, 'Pete, I really believe it will take a palpable crisis to get us to act.'" To avoid that alarming potential, Peterson and others are trying to warn us all.