Strange Legacy

A Warning to Democrats: Large Budget Deficits Could Become Your “Iraq”

I read an article in Newsweek about a recent congressional hearing on the economy where Ben Bernake offered a strong warning against uncontrolled deficit spending. While Bernake is a controversial figure (many question his competence as Fed chairman), Democrats should heed his words and prepare for a coming storm if they fail to exercise greater restraint with our national budget.

There is a strong possibility that trillion dollar deficits could become a liability for the Democrats in much the same way that Iraq became a liability for Republicans. When the Iraq War began, most of the country – including several prominent Democratic politicians – actually supported it. And yet, only a year or so later people began questioning the necessity of the war. As the war dragged on, and the cost in money and lives continued to escalate, Iraq became an albatross from which the Republicans could not escape. The Iraq War is now considered a blunder by many Americans, and is largely responsible for the devastating defeats the G.O.P. has suffered in recent elections.

Similarly, America has largely supported President Obama’s initial push for widespread government intervention in the current economic crisis. During times of emergency, people demand action. And yet, optimistic projections suggest the economy is set to rebound later this year. As the economy improves, and the trillion-dollar annul budget deficits continue, questions will inevitably begin to arise about whether all this spending was truly necessary.

With something as complex as the economy, it is extremely difficult to pinpoint the precise cause of an upturn or a downturn. People still debate whether it was Franklin D. Roosevelt’s “New Deal” or World Wars II that got us through the Great Depression. While media pundits and political ideologues from both the left and the right are happy to give very loud opinions on this question, most of the true economists I know simply shrug their shoulders in response. Bottom line: it will likely be impossible to determine what effect, if any, deficit spending will have on economic improvement.

Republicans have long endeavored to paint the Democratic Party as the “tax-and-spend” party. Despite President Clinton’s success in balancing the budget, Republicans have warned that if Democrats are in power deficits will skyrocket. It is true that recent large budget deficits began during George W. Bush’s administration – a fact to which Democrats will happily point during these debates. But the projected deficits of the Obama Administration will vastly eclipse those of his predecessor. As time passes, Democrats will find it increasingly difficult to fault George W. Bush for all of our current problems. Just as Republican attempts to use 9/11 to justify their policies have become hollow and ineffective, so too will efforts by Democrats to permanently blame Bush.

Democrats can expect to take some serious fire in 2010 and 2012 from Republicans on the issue of deficit spending. While recent Republican attacks against Democrats have had little impact, there’s a good chance that national concern in the future with the deficit will increase their potency. Democrats would do well to start preparing for those debates now, or the Republicans will emerge as a strong “underdog” opposition to the reckless spending of the Democratic establishment. The collective memory of this country is notoriously short, and like the Iraq War people will quickly forget their initial support of government intervention if they feel it has gone too far.

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