Sections

Within the next fifty years, China will probably overtake the United States as the world’s dominant hegemonic power. When this happens, historians will ask “when was the turning point?” Indeed, at what point did America begin to decline? The answer is in the policies of the past administration, that of President George W. Bush.

The Bush presidency can be held in such low regard because of its economic policies. During his 2000 campaign, Bush touted himself as a typical fiscally conservative Republican who would cut government spending and make economically responsible decisions.

Ironically, the complete opposite held true. Before Bush ascended into the White House, the United States, for the first time in decades, was producing record surpluses that could be used to pay down the debt. By the time Barack Obama replaced our 43rd president eight years later, he was faced with a federal deficit of approximately one trillion dollars and a debt of nearly $12 trillion.

This state of affairs was the by-product of unrestrained fiscal profligacy. First, Bush passed a series of unnecessary tax cuts catered to the rich, resulting in billions of dollars of lost revenue and tax receipts. Then, with the onset of the so-called War on Terror, the government invested copious amounts of resources defeating insurgents in Afghanistan and Iraq and nation-building in those two countries. Meanwhile, the administration passed into law Medicare Part D, a program which entails the government pouring massive amounts of funds into the insurance industry to provide prescription drugs to seniors.To cap this all off, there was the financial meltdown of 2008, which was in no small part spurred on by the administration’s continued support of deregulation of the financial services sector, low interest rates, and the practices of Fannie Mae and Freddie Mac concerning mortgages.

The subsequent infusion of Troubled Asset Relief Program (TARP) funds into institutions crippled by toxic assets, in addition to the precipitous decline in tax revenue caused by the great recession, also did not bode well in terms of our immediate fiscal outlook. I am not going to debate the merits of every single one of the Bush Administration’s actions. Rather, I lament the fact these policies have left us with a seemingly insurmountable level of federal debt. Past empires, from the Romans to the Ottomans, have crumbled in part due to a lack of control over their respective economic situations.

Similarly, if we refuse to solve our debt crisis, we will face enormous interest payments, a lack of investor confidence, a decline of the value of the US dollar and a resistance by our major creditors, such as China and Japan, to cooperate with us.

In the end, this downward spiral could portend potential doom for the federal government, and an inability of it to provide essential services and administer the rule of law.

Fortunately, we are not at this level yet. However, I am pessimistic about the prospect of Congress coming together on this problem in the near future.

There are very legitimate concerns about whether either cutting spending or raising taxes, even on the rich, is appropriate during a recession.

And, neither Democrats nor Republicans are committed to making difficult decisions with potential short-term political ramifications.President Obama’s announced freeze on non-defense discretionary spending, as well as a fiscal commission, are steps in the right direction. Contrary to conservative rhetoric, he is, in reality, far from the extravagant spender he has been caricatured as, to his credit. However, there is certainly no guarantee that Congress will act upon the commission’s recommendations. This is especially the case with Republicans, who have collectively resolved that they will oppose any major initiative Obama endorses.

And if Congress fails, what will we have left? No solutions for long-term solvency, and only political inertia, paralysis, and the catastrophic fiscal legacy left by President Bush. I hope we can do better.