'A radical evolution in Government Fiscal Policy '
The recent Presidential election may be viewed as a clear mandate from many segments of our society: The traditional economic policies of the 20th century have failed us, and radical change is needed.
The consensus is that right now we as a nation are facing the worst crisis since 1929. That crisis was amplified into the Great Depression by the ‘hard money’ conservative policy of the Hoover government. Apart from the effects of the victory of WWII, there were two principle factors in the ‘New Deal’ policy of the Roosevelt government that enabled a recovery:
1> the relief from ‘hard money’ constraints (partial de-coupling of the dollar from gold equivalence) which provided the government with significant funding to intervene in the crisis.
2> the spending of those funds into infrastructure projects, which provided meaningful employment for the citizens of the USA, creating public works of lasting value (even the USA involvement in WWII itself may be viewed in this context, as a whole-nation enterprise with longterm value).
These two factors can again be employed to bring our nation out of its crisis; but the specific mechanisms of the 20th century ‘New Deal’ are no longer sufficient; a radical evolution of these principles in practice is necessary. The prerequisites for this evolution are the same now as in the day of Franklin Roosevelt:
> A national consensus that the old way has failed us, and that something new is required.
> A strong leader committed to these principles and able to rally the reserve strength of a unified populace.
> The intelligence to synthesize a few simple but powerful ideas and methods into a workable plan.
> The will to focus and persevere in its implementation, with flexibility but without capitulation.
With the election of Mr. Obama as President, we have met the first two requirements. The opportunity is now. He has demonstrated a commitment to the principle that as a nation, our greatest resource is a diverse population of intelligent, creative, and industrious people, working in unison within the great democratic tradition of liberty and justice for all. Throughout this enterprise, it must be unmistakably clear that the leader’s respect for and care for this diverse people, and this great democratic tradition, are genuine and unshakable. Success depends on this.
This is why we call the ‘New New Deal’ evolutionary – because it rests upon that tradition. The specific ideas and methods that we will propose rely on the power of that tradition, while introducing innovation enabled by our national progress in economy, science and information technology:
> A relentless focus on worthy Primary National Goals reached by intelligent, creative consensus.
> A new understanding of Money, coupled to the unique global power of the US Dollar.
> A quantum leap in Government Quality: efficiency, productivity, and transparent accountability.
Some of the key ideas presented in the following brief appear ‘radical’ in the context of our Republican politics and economy of recent years. However, in the context of the mandate implicit in the election of Mr. Obama, and the severe crisis unfolding in our economy, we would urge an open-minded and careful consideration of these ‘radically simple’ solutions. The danger is that any remedial attempt that is more safely familiar will be far less than adequate. Moreover, these new ideas are a synthesis that is also consistent with proven successful 'supply-side' and libertarian aspects of the Republican Reagan era.
The proposed solutions are meant to face squarely the true seriousness of our current crisis, and to aggressively and boldly ‘get ahead of the curve’ of the impending vicious deflationary cycle and its deepening national despair.
They are more than just short-term patches; they intend to lay the foundation for national peace and prosperity well into the 21st Century, and to avoid offloading difficult choices and crushing debts onto our future generations of children.
Finally, it should be clear that the cause of the current crisis is due to the limitations of human nature; that government is human, and that failures in our government contributed as much as those in private enterprise. More government is not necessarily Better Government. For a balanced exposition, see:
L.H.White.CATO:'Imprudent Government Policy'
J.B.Delong.CATO:'Imprudent Private Risk Behavior'
W.K.Black.CATO:'Criminal Fraud and Lax Law-Enforcement'