The Federal Deficit and the American Dollar

John Stossel: Federal deficit is cause for worry

President-elect Obama says don't worry about the federal budget deficit.

"The consensus is this: We have to do whatever it takes to get this economy moving again -- we're going to have to spend money now to stimulate the economy. ... (We) shouldn't worry about the deficit next year or even the year after; that short term, the most important thing is that we avoid a deepening recession."

It must be music to a politician's ears when a "consensus" tells him not to worry about deficits. He can spend without limit. So Obama talks about a "stimulus package" that he says will rebuild the infrastructure and "green" the energy industry. That won't happen, of course. Government performance consistently falls far short of its goals.

Obama hasn't put a price tag on his stimulus package yet, but speculation begins at $500 billion, with some people -- like Paul Krugman, the recent Nobel prize winner -- saying that's way too small. "I'm still not sure ... whether the economic team is thinking big enough." [...]

Stossel goes on to compare our situation with the Great Depression, and how government spending and intervention in the 1930's prolonged it. And how that is relevant to our situation today? Read on:

[...] Obama must realize that government has no wealth of its own and that commandeering scarce resources from the private sector only stifles the economy. The 2009 deficit is projected to be $438 billion. Obama's "stimulus" could take it up to a trillion and beyond. That's just the beginning since the Democratic Congress' spending wish list and Medicare's $35 trillion unfunded liability loom. [...]

This is what concerns me most. Our government seems to keep spending money it does not have. The debt just keeps getting bigger and bigger. The "bubble" just keeps growing. What happens to the Dollar when the bubble bursts?

We really don't want to find out. There is no part of our constitution that requires a balanced budget, because, I believe, it was considered just common sense to balance the budget. Duh! But common sense seems to have gone out the window. It really, really needs to make a comeback. The American people and government cannot keep spending money we do not have.