Friday, September 19, 2008
There’s no avoiding this conclusion: The federal government’s breathtaking economic interventionism has turned America into a democratic-socialist state. The fact that these drastic incursions are happening under an allegedly conservative administration leaves this right-winger oscillating between head-spinning disbelief and exhausted disenchantment.
The $200 billion federal bailout of Fannie Mae and Freddie Mac has given Washington control of some $5 trillion in home-mortgage debt. Roughly half of Americans now live, essentially, in public housing.
The nationalization of American Insurance Group puts Uncle Sam in charge of 80 percent of the nation’s largest insurance company. Cost: $85 billion.
To finance this takeover, the Treasury Department will sell some $40 billion in bonds. After borrowing this money — to be paid eventually by Americans not yet born, conceived, nor imagined — Treasury officials will hand it to the Federal Reserve to help fund its seizure of AIG.
This month’s brutish government intrusions arrive atop July’s $300 billion bailout to refinance home mortgages up to $729,750 in value. This legislation has yielded a grotesque spectacle: the 34.7 percent of households that rent dwellings, and thus lack home equity, are subsidizing those who own homes that renters cannot afford. This program lifts the prices of those properties even more beyond reach, while further draining renters’ pockets. This makes down payments that much tougher to accumulate.
The feds coughed up $29 billion in March to unplug Bear Stearns and sell it to J.P Morgan Chase. Bear was deemed “too big to fail,” thus paradoxically requiring its federal euthanasia. Nevertheless, much-larger Lehman Brothers ($59 billion in sales last year vs. Bear’s $16 billion) was allowed to declare bankruptcy and sell itself to Barclay’s Bank. Still, taxpayers are reimbursing Chase $87 billion for covering some dodgy Lehman transactions.
Washington also has racked up some $200 billion in outstanding loans to banks through the Fed’s Term Auction Facility.
And don’t forget January’s $168 billion “stimulus” package.
Beyond Wall Street, tax dollars are churning like storm surge from America’s roads to its farms to its medicine chests.
As high fuel prices have forced motorists to drive less, plunging gas-tax revenues have carved an $8 billion hole in the Federal Highway Trust Fund. Rep. Jeff Flake, R-Arizona, has proposed filling this gap by rescinding unspent cash from among approximately 6,000 pork-barrel projects shoehorned into 2005’s $286 billion transportation bill. Instead of helping Flake transform this into a winning issue for Republicans before Election Day, President George W. Kucinich...er, Bush signed a bill Monday that simply grabs $8 billion from Treasury’s vault and shifts it to the highway fund, thus despicably leaving those earmarks intact.
Agricultural bailout
Last May’s $307 billion agricultural bailout will pump taxpayer dollars into the pockets of farmers, many with multi-million-dollar incomes augmented by record high prices for many crops. These subsidies further fatten consumers’ grocery bills. In addition, 2002’s five-year farm fiasco cost $190 billion.
The 2003 Medicare Drug Plan will cost $783 billion through 2018 to airdrop pharmaceutical benefits on all Americans over 65, regardless of personal wealth, and even if they already have health insurance, including drug coverage.
GOP presidential nominee John McCain will benefit by reminding voters that he opposed nearly all of this government largesse. He should explain that his administration thus will not be “more of the same” as Obamacrats keep chanting. To the contrary, it will embody Washington’s liberation by the forces of limited government.
The Bush administration disgracefully has requested and or agreed to everything denounced here, save for 2008’s farm bill, which Bush vetoed, albeit too late to matter. Porcine Republicans — 100 House members and 35 senators — shamelessly overrode Bush’s objections.
X Deroy Murdock is a columnist with Scripps Howard News Service and a media fellow with the Hoover Institution on War, Revolution and Peace at Stanford University.