Victor Davis Hanson notes:
…lost in such economic talkfests are the psychological implications of large deficits upon the voters. It may be true that the American people care more about unemployment and inflation than deficits. Or maybe they are not all that concerned about the interconnections between the former and the latter. But in recent years, as budget shortfalls soared, that old wisdom seems less and less compelling.
Consider the political effects of Bill Clinton’s two budget surplus years — and ignore the ongoing argument to what effect they were the result of creative accounting, not sustainable, or any of the other conservatives rationalizations use to deprecate the achievement. The truth is that they were, and are, now acccepted as unusual achievements…
…what is forgotten is that Bush paid a terrible price for his deficit spending. His unpopularity was not entirely due to Iraq, but finally in large part to the notion that our national debt after eight years of unprecedented borrowing has soared to $11 trillion. He desperately tried to convince Americans that his tax cuts had stimulated the economy (quite true), and had led to greater aggregate revenue than ever before (quite amazingly so)…
If Obama’s deficits remain high – and there is no indication that they will drop to anything reasonable before 2012 – then Obama may very well pay a high price at the polls, especially if the deficits are requiring high inflation, high taxes and high interest rates in order to maintain our bond rating. Can Obama finesse himself around this and still be re-elected in 2012? Anything is possible – but Obama’s best hope is to go on a crash course of spending reduction next year.
We’ll see what he chooses.
Blogs For Victory 