An Empire In Decline
Daniel Henninger at the Wall Street Journal writes that “Americans have their first whiff of inhabiting an empire in decline.”
Going back at least to the Clinton presidency, Democratic policy analysts have promoted, as a middle way, various Western European “mixed-economy” models for the U.S.—generous national systems for health and welfare, with the economy kept going by tax-supported “investments” (spending) in infrastructure, education, research and the like. This of course is what Barack Obama has sought from day one.
The Democratic argument has been that the country could maintain its remarkable economic success while performing all these social goals, though with cutbacks in defense spending. But there has never been any sort of coherent economic argument for how we could spend all this money and maintain the U.S.’s long-term growth trend. The S&P downgrade is at bottom a repudiation of 50 years of Democratic economic theory, or its absence.
What they’ve offered is essentially a dream, often described by them as such. But if the dream requires that Washington must somehow manage spending on the scale now, then clearly the middle-way dream isn’t working.
Read the whole thing.Tags: Economy, jobs