It sounds like a terrible thing to say. At first glance, a recession of any kind, especially a double-whammy recession, doesn’t seem like the best thing for America. America needs jobs, entrepreneurship, and recovery. The last thing we need is another recession.
But if history serves us correctly, it could be the best thing to ever happen to the United States.
Let’s face it, America has gone wild. Spending is out of control, government is out of control, and people across the country are furious.
That’s why people across the country are going to tea parties, town hall meetings, and events like Glenn Beck’s 912 Project rally. People are hopping mad, and for good reason.
The national debt is $11.8 trillion — that’s $39, 333 dollars for every American citizen. In 2009 we will add over $2.6 trillion to that figure. According to the Office of Management and Budget (OMB), after the record-spending years of 2010 and 2011, the national debt will only increase by just a hair under $1 trillion for every year until 2015.
Gotta love those interest charges.
You would think that will all of that debt we would be spending less. Guess again.
The Obama administration by its own admission has said that the U.S. federal budget deficit will rise above $1.8 trillion in the current fiscal year ending Sept. 30, 2009.
Now, some people might say we just came out of a recession and the government has had to spend a little more than usual. Obama’s fiscal deficit is actually four times more than any other deficit than any other administration in the history of the United States. Sure, we avoided utter financial disaster, or so the Obama administration has told us. So, some might say all this spending is OK.
But surely, now that the Obama administration has single-handedly saved us from our own destruction, it’s time to tighten the belt and rein in on spending.
Obama has proposed a fiscal deficit for the 2010 fiscal year of $1.17 trillion. That’s three times bigger than any other fiscal deficit in the history of the United States for any administration.
All of this does not even include the cost of the bailouts. Neil Barofsky, Obama’s special inspector general for the government’s financial bailout programs, has said that the bailouts could end up costing taxpayers up to $23 trillion. That’s almost twice the total economic output of the United States for a single year.
How much has the government exposed itself to in losses from AIG, Fannie Mae, Freddie Mac, Citigroup, General Motors, and the host of other companies it has bailed out? Some of these companies with their toxic assets are a ticking time bomb for the U.S. taxpayer, and the government doesn’t even know it.
This brings me back to my original point: how a double-dip recession could be the best thing for America.
Once the new-car smell of Obama’s policies wears off, America will realize that it is deep in debt. New jobs are nowhere to be found. The U.S. dollar, the currency that the world used to rely on, is becoming a thing of the past. This could be the onset of the double-dip recession which started with the recession of 2007 to 2009, was followed by the short-lived recovery of 2009, and may be subsequently followed with the second recession of 2010.
Why is it important if a recession lasts until 2011 or even 2012? The answer is, election time.
In 2012, the United States will have a referendum on its multi-trillion dollar spending spree. If the economy is in bad shape, there is little doubt that the current party in power will not get re-elected.
Just look at our last election, when no Republican, not even John McCain, could win the presidency because George W. Bush had led the country into recession. If the double-dip recession is still around by the end of 2011 or 2012, then President Obama could face a similar fate.
Some people might say: Dan, this is partisan politics. You just want Obama out of the White House and your guy in. That’s a fair response, but the phenomena I hope for goes beyond party lines, it goes to history.
If you remember, there was a man from Texas not too long ago. He was a brilliant man who some people found to be loud and annoying but who everyone found to be highly effective. This man changed the course of the United States, and his name was Ross Perot.
Perot probably single-handedly saved the United States. At the time of the 1992 presidential election, the U.S. was reeling from a post-war recession and had seen 20 years of budget deficits. Fiscal responsibility was a word that was lost in the vocabulary of Washington, D.C.
Through his pie charts, infomercials, and relentless campaign to reach Americans, Perot focused Americans on the economy. He pointed out that he was the only candidate who had a real plan for the economy and not just the platitudes and rhetoric that Washington, D.C. has become so full of.
While the end result of Perot’s crusade was the election of Democratic presidential candidate Bill Clinton, the message that was sent was clear. In the words of James Carville, “It’s the economy, stupid.”
Because America had wanted more fiscal responsibility, Washington, D.C. responded by producing budget surpluses from 1998 to 2001, bringing America back in terms of financial solvency, and giving us a high point in American wealth.
Some critics may say this was just one time.
Let’s look a little further back in history.
In 1920, the United States again was in a post-war recession after World War I and deficit spending had gone out of control. A man by the name of Warren G. Harding, a little known Republican senator from Ohio, ran on a platform to bring America back to normalcy, to have less government in business, and more business in government.
What ensued in the 1920s was not only 10 years of consecutive budget surpluses, but some of the most prosperous times in American history.
A similar situation could present itself in 2012. We could be coming out of a war (Afghanistan), and into a recession. The focus of the American people will be towards fiscal responsibility, and politicians on Capitol Hill and the White House will get the message.
We can have this America. We can have an America that doesn’t leave massive debt to its children and grandchildren. We can have an America that is a leader in the global economy and not a burden to the global economy.
This all very possible, but America needs to wake up. Because of a deluge of government spending, people have been convinced that everything is going to be alright.
When people wake up and see the reality that the administration has created with its unprecedented spending, the focus will once again be on the economy and on fiscal discipline. This is not about Democrat or Republican. This is about America. We need to do what’s right for America, and it’s about time that the people stood up.
To quote the philosopher George Santayana: “Those who cannot learn from history are doomed to repeat it.”
What history has taught us is that we need to have less government in business, and more business in government. What history has taught us is that: It’s the economy stupid. What history has taught us is that when Americans demand fiscal responsibility from their government, politicians respond with, “Yes we can.”
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