About the time community organizer Barack Obama landed in Chicago, a classic movie was released set in the Windy City entitled The Color of Money. http://www.imdb.com/title/tt0090863/
In recent days, we've discovered that the color of Barack Obama's money will be dollars colored in red ink.
Mr. Obama's team is putting together a new economic stimulus plan containing more than $500 billion in federal spending and tax cuts over the next two years, Obama aides and advisers said Sunday. That package would be far more aggressive than anything envisioned during the campaign.
http://online.wsj.com/article/SB122747905110751527.html
Of course, even without the "stimulus" package the federal deficit with all the existing bailouts will be in the astronomical trillion dollar vicinity
But as my local councilman has discovered, Senator Obama is still telling his Illinois constituents how committed he is to fiscal discipline. (H/T Tim White)
http://timwhitelistens.blogspot.com/2008/11/obama-fiscal-conservative.html
"Senator Obama believes that our current budgeting and borrowing practices are fiscally unwise and unsustainable. This is why he strongly supports and has voted for commonsense “Pay As You Go,” or “PayGo” rules, which would require any new increases in discretionary spending to be offset by a reduction in other areas of spending.
Federal Debt, Deficit Spending
Senator Obama voted against the most recent effort to raise the national debt limit. The current national debt has exceeded $8.6 trillion dollars, and nearly $4 trillion of that debt is now held by foreign governments. Our national debt and annual budget deficits effectively tax all Americans by adding to the amount of interest paid to service U.S. borrowing; Senator Obama would rather invest these hundreds of billions of dollars into national priorities, such as securing our homeland, improving our schools and providing needed benefits to our veterans."
http://obama.senate.gov/issues/good_government_responsible_spending/
The Republicans lost a lot of ground with old time moderate Republicans who never were fervent tax cutters and are out of step with the social conservatives. A party that presides over huge quantities of red ink and mismanagement simply doesn't offer them anything they don;t expect from the Democrats. So when a "Blue Dog" talks "PayGo", they perk up: it sounds like a better deal to them.
The Obama team has decided to throw their new found fiscal credibility out the window. The last thing you want to do with a huge Democratic majority in Congress is to invite them to spend money---you'll never get them to stop.
Apart from running off people who thought Bush was too big a spender, there are real fiscal concerns here. Forget the doomsday scenario when foreigners sell all our bonds and crash the dollar; well before then consumer interest rates will stifle consumption and private investment as the ravenous Treasury gloms up all the available capital to cover federal debt; leaving a limited supply of private capital to be bid up due to scarcity.
And might I point out that without turning on the federal spending machine we are still going to have a structural demogrpahic deficit in about 36-48 months as the first boomers enter their golden years (ask Rick Wagoner how well this is working for GM)....in the misery love company dept. the Eurozone will have an even bigger demographic tsunami to overcome.
Republicans may not want or be able to filibuster this spending spree to death. But trust me, after it is started there will be a "Big Dig" or "Bridge to Nowhere" in every state. A party that has lost its way on economic issues can regain it by running at warp speed in the other direction from this fiasco in waiting.
