The Fall of Republican Fiscal Conservatism

By Adam C2 Posted in Comments (61) / Email this page » / Leave a comment »

On Friday, the Senate passed a slew of major bills. Looking specificially at the Transportation Bill and Energy Bill it is clear that despite the well-earned reputation of fiscal conservatism, Republicans seem determined to match or surpass the 1960-1980s Democrats on pork barrel politics. In the Senate, the Transportation Bill and the Energy Bill passed by lopsided votes of 91-4 and 76-24. The only silver lining, if it can be called that, is that Democrats generally joined in on the pork barreling thus giving up the chance of winning over good government, anti-pork moderates that put Republicans in power in the 1994 revolution.

In this sad reflection on why Republicans have turned their backs on their original Contract With America to embrace Democratic-style porking, there are a few Republican Senators who deserve praise for putting their names down as opposed to these antics. I present for your praising:

Voted Against Both Bills:

Gregg (NH)

Kyl (AZ)

McCain (AZ)

Voted Against Transportation Pork Only:

Cornyn (TX)

Voted Against Energy Pork Only:

Martinez (FL)

Sununu (NH)

Chafee (RI)

First of all, congratulations to Arizona for elected two principled fiscal conservatives and New Hampshire for being a close second. Second, Chafee's vote is most likely do to the same reason 17 Dems voted against the bill rather than a love of fiscal conservatism.

Finally, I believe it is imperative that Republicans find a true fiscal conservative to run in 2008 or we will risk losing our claim, earned in 1994, to being the party of good government. The best bet is to find a governor with a strong track record on fiscal issues such as Sanford, Owens, Bush or Pawlenty. But if we do look toward our Senators then three names stand out: McCain, Kyl, and Gregg. While The Deal is turning out to be a good one for Republicans and with most other Republicans signing on to the pork barrel train, Senator McCain's 2008 stock is rising with fiscal conservatives who span across the political spectrum of conservatives and moderates, Republicans and Independents. And these votes give me more reason to believe that McCain is at heart a conservative in the best sense.

Update [2005-7-31 13:9:22 by Adam C]: One quick note: I was very saddened to see my Senator, Mr. Coburn (OK), vote for both bills. I expected much more from him based on his House experience.


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McCain is someone that this far-left Democrat could get behind. I certainly don't agree with him on everything--he doesn't speak for me on abortion, and I'm dissatisfied with the unqualified support he's been giving Rove and Bush during the CIA leak issue. I'm also not a fan of his answer to CFR. But by and large he strikes me as one of the most principled Republican Senators, and someone I'd rather have in office than, say, Hillary.

That's something to think about. Republicans may question the conservative credentials of someone appealing to a lot of liberals, but there's also something to be said for having a candidate that has broad cross-party appeal.

Thanks for this excellent post. As I said in my Senate Report Card yesterday, both the highway and energy bills were waaay too filled with pork, and Bush should have followed through on his veto threat with the highway bill ($2 billion here, $2 billion there, soon we're talking real money).

Also, if you missed McCain's speech re: the highway bill (he was the only senator to speak against it) - he was excellent. There are a bunch of long excerpts in the report card at the link. I am still trying to find a link to the video of it.

I may disagree with you on some things, but on fiscal conservatism, we're reading from the same page. Let's find a real fiscal conservative for '08.

And agreed 100% with your thesis that the GOP is busy burying its reputation for fiscal rectitude, even if I don't think McCain is a conservative.

Starts talking about John McCain's virtues as a fiscal conservative and begins the long process of reversing all of the animosity he's generated for the Arizona Senator, I'll start taking a McCain bid seriously.  Right now, the people I know who have listened to Limbaugh religiously for the past ten years hate his guts.  

Sununu had much to do with fiscal conservatism in regards to the energy bill-it was pretty much the same reason the dems voted against it.

Getting Limbaugh to start changing his tune on McCain might amount to nothing more than a few phone calls from Bill Kristol at the Weekly Standard, and it can be done gradually over the next several years.  And dollars-to-doughnuts that McCain's articulated positions on embryonic stem cell research will precisely mirror those of Bill Kristol's most recent article here.  Frankly, I'm beginning to think of the Weekly Standard as the John McCain Journal.  Let's see if I'm wrong.

We don't have a two party system anymore.  I'd like to find out how how many "republican" congressmen are really democrats that switched parties when the public started to vote for republicans.

From MTP on 6/19 (via my write-up of it here).

On Stem Cells: McCain acknowledged having been persuaded by Nancy Reagan and other "very smart people" that embryonic stem cell research is worthy of federal funding, while making clear "all of us are opposed to human cloning." "For us to throw away opportunities to cure diseases," McCain said, "would be a mistake." Asked if he supported the use of embryos left over from fertility treatments for stem cell research, the senator said he thought that ought to be left up to the couple (as the bill currently pending in Congress would do).

I think McCain is likely with Specter on this as well.

I consider myself a moderate republican, and have alway liked McCain. But I have never figured out why so many Democrats also say they like him.  After all McCain supported the war in Iraq, supports John Bolton for UN rep., will support John Roberts for the USSC and presumably other Bush appointees, is (I think) pro-life, and now actually takes the revolutionary position of reducing gov't expenses.  Go figure.

Also, would like hear more about Sen Kyl.

is pro life.

Also the dems that like McCain tend to be the more center/center right type, and they generally do not support abortion on demand, and are in favor of some restrictions-so his pro life stance may not bother them as much.

I agree with you (as another strong backer of McCain). What is really interesting to me though is how nasty Democrats get to him when he supports Bush (see recent comments from people about his non-attack on Rove, his campaigning for Bush in '04, etc.).

I don't agree with McCain 100%, but for the most part we're in agreement (and I'd be scared if our positions matched on everything). I think some of what the Dems like about him is that he does go "off the reservation" sometimes (global warming, fuel efficiency, anti-torture amendments, immigration, etc.) - and most of those Dems you hear saying they like him are really probably closer to moderate/centrist than the liberal segment of their party.

While generally a conservative, McCain has adopted many positions of a centrist bent, and that's what's made him so popular with the middle portions of both parties (and so unpopular with the Rush Limbaughs of the world). I think at heart, most Americans are fiscally conservative, and McCain's fight against wasteful spending hits home to many, regardless of party label. As it should.

The voters and the press have failed to notice the seriousness of our fiscal situation, but the world financial community has certainly taken note. Since President Bush took office all other major currencies have appreciated against our weak dollar:  

Euro   + 28%

Pound  + 19%

Yen    + 5%

Swiss Franc  + 26%

Canadian dollar + 23%

Gold  + 62%

Because of the weak dollar, many foreign investors have lost money on their US dollar investments and are redirecting portions of their funds elsewhere. This has contributed to the depressed state of our markets. Since Pres. Bush assumed office US stock markets have been flat to negative:

Dow Jones Ind  + 0.5%

S+P 500   - 8.1%

Nasdaq    - 21.1%  

If our dollar continues to slide, it will become more difficult to sell Treasury bills to foreigners; they will certainly demand a higher interest rate to compensate for their currency losses.  

Congress won't take responsibility for the budget deficit; just last week $1.5 billion in pork was added to the Energy Bill even after the Conference but it still passed. The White House has yet to exercise a veto. Maybe it is time.

You are probably right that the Ds don't know McCain is pro-life.  I got a big kick out of all the talk of Kerry making McCain his VP candidate in the last campaign.  You know, a heartbeat away from the Presidency and all that.  Of course Kerry knew this about McCain, but, you know, "if it can just get me elected....".

Hold on Charging RINO, what's this about anti-torture amendment?  McCain is starting to loose me.  Check out my recent Diary Entry on Redstate: Should Omar Be Tortured?

I've got a whole bunch of posts on this, but basically McCain (and Lindsey Graham, John Warner, Susan Collins, Lamar Alexander) introduced some amendments to the DoD Approps bill that would allow the Army to set basic standards for interrogation techniques (the WH has threatened to veto, which is part of why Frist pulled the Approps bill last week). Here are a couple of the things I've written on this:

-Updates

-McCain's Floor Statement

I'm fully aware that McCain is pro-life. Preserving a woman's right to choose is important to me, but I'm not a single-issue voter, and I don't know many people who are.

I don't agree with McCain on everything, but I respect his honesty and integrity, which is more than I can say for Bush--or, for that matter, the majority of elected officials of either party. That counts for something in my book.

The New York Times published its editorial calling for the next step:  Therapeutic cloning.

The Senate majority leader, Bill Frist, deserves credit for moving gingerly toward a more expansive policy on stem cell research. Mr. Frist - the transplant-surgeon-turned-lawmaker who was last seen catering to religious conservatives by questioning whether Terri Schiavo was really in a persistent vegetative state - showed courage and common sense yesterday by endorsing a bill to expand federal financing for embryonic stem cell research. Such research has the potential to provide cures for a range of diseases someday, but it is anathema to the religious right because the stem cells are extracted from microscopic embryos that are destroyed in the process.

...

That is a step forward, but a pathetically small one. The bill would not allow financing for the most promising kind of stem cell research, known as therapeutic cloning, which involves the creation of embryos genetically matched to patients with particular diseases.

They want much more than what Frist had to offer at the Federal level.  Frist gave them an inch, and now, in the view of the New York Times, the entire yard is up for grabs...and the next one, and the next one, and the next one.  No wonder Frist looked so sad after making his announcement yesterday.  He knows that he just gave the game away.  The genie is out of the bottle at the federal level thanks to his speech.

If you're interested, here are the Democrats* who opposed Energy Pork:

Biden (D-DE)

Boxer (D-CA)

Carper (D-DE)

Clinton (D-NY)

Corzine (D-NJ)

Dodd (D-CT)

Feingold (D-WI)

Feinstein (D-CA

*Jeffords (I-VT)

Kennedy (D-MA)

Kerry (D-MA)

Lautenberg (D-NJ)

Leahy (D-VT)

Murray (D-WA)

Nelson (D-FL)

Reed (D-RI)

Reid (D-NV)

Sarbanes (D-MD)

Schumer (D-NY)

Wyden (D-OR)

Yeah, I was very disappointed to read that (but not surprised, it's the NYT!). I certainly don't agree with the idea of creating embryos specifically for harvesting stem cells as they advocate.

Specter-Harkin does nothing of that sort, which is why I support it. I don't believe that what the Times is calling for would get anywhere near a majority vote in either House or Senate.

Yeah, but I think we all know why they opposed it, and it had nothing to do with pork.

 And putting this guy on ANY presidential ticket would be the biggest risk in history of the USA since Clinton was the Chief of Command.

  Myself being a physician, I am embarrassed at the naive bluntness of the way he threw the bones to the wolves in this one.

       Frist, Mc Cain and Specter are becoming the biggest fools in the US senate. At least when Boxer, Kennedy and Kerry is talking we know they are opportunits that would do or say anything to get anything, but our republican (???) trio is slowly making me nauseated every time I see them in the public.

CAvH

Re: the dollar.

When Bush took office, the dollar was at a tremendous high. The dollar isn't like the stock market in that rising is good. You want a stable dollar, not a strong of weak dollar. We were just starting to feel the effects of four years of deflation. The dollar needed to lose value of we would still be in a grinding deflationary recession.

However, clearly gold at $450 is too high. You write as if the dollar has been in a continual slide since Bush was elected. To the contrary, the dollar bottomed out in late 2004, and it is pretty much where it was when 2004 opened.

You can essentially throw out that nifty percentage change table, since it is meaningless. The dollar is right about where we want it, even though $430 gold might be a touch too high. It would be nice to see the dollar brought up a little -- two or three percent -- but I'm not going to complain about something so minor.

Next time you want something to complain about, a far better grievance is the volatility of the dollar. Since we were getting gold at those 450+ numbers, the dollar has been taken some pretty wild swings, down and back up 10% a couple times like a superball.

Re: the general stock market

Strangely you would pick this week, since most indicators hit major new multi-year highs in the past few days. It is hard to blame this administration or Congress for a decline that would have happened regardless of if Bush or Gore won. The market had just run off the cliff, and regardless of who was elected, the deflationary decline would have happened.

Wait, did I say deflationary? Why, yes for quite an important reasons too. This "weak dollar" myth you keep on pushing is partially the reason for the recovery. If the dollar were to still be at those stratopheric levels of 2000, we would still be in a recession. We needed to get back to $400 gold to relieve the deflationary pressure. (We needed to get back to $360 at least overshot the target.) This has nothing to do with trade flows or anything like that. It is far simplier. Deflation is very bad of the economy, just ask Japan.

You can't just throw out numbers that start from when the current administration took office and expect them to always make sense.

Seriously, this was old news even before the prescription drug bill passed.  Did you just notice the debt that's been piling up for the last few years?  The allure of the pork barrel is not limited to any one party. Perhaps it's time to vote the bums out (again).

[Disclaimer:  What follows is a bit of a rant.  Take it with a grain of salt.  I'm being a little mean and cynical here, and it's going to offend some people, but so be it.]

Frist is not naïve; quite the contrary.  He knows exactly what the situation is:

If you're an important researcher at the NIH, you don't want to be spending the rest of your life working on toenail fungus or analgesics or urinary-tract infections or menopause.  You want to be working on the Big Stuff:  huge, life-changing, Class I Profound Things.  These aren't the people toiling away in some backwater laboratory at Kalamazoo College, this is the frickin' NIH, dude!  All these people have egos the size of Gibraltar and they all compete with each other for the Big Prizes.  Harvard jumped out in front of the Federal laboraties and said, essentially:  "neener neener neener" and that made the researchers reliant upon federal money angry.  MY GOD!  They are the NATIONAL Institute of HEALTH!  In the United States of America!  And no borderline illiterate from Crawford, TX is going to tell them what to do, especially not if Harvard can do it.  

And that's really all there is to it.  Also, the AMA is already coming out against any kind of substantive Medicare reimbursement cuts, and they want to make sure that if one cash cow has to get butchered, another cash cow is lined up and ready to take its place.  It's as simple as that.  It has nothing to do with Christian morality;  Frist isn't naïve at all.  He knows, and the NIH knows, and the AMA knows, and the Biotech companies know, and Harvard's researchers know, that this kind of reproductive engineering and therapeutic science is going to be the Next Big Thing for every person in the United States and the world.  It's too big a market to ignore, and they're adamant that they take the lead.  These are not country doctors, and the rest of us are just along for the ride.

It just so happens that what Frist said on Friday aligns with the interests of the Democratic Party right now, because it sticks it to the President and the Republican Base, both of whom they hate with a passion.  That's why DKos is running big "Thank You Dr. Frist!" advertisements right now.

in 2000 on fiscal issues alone. I'm way, way to his right on a number of issues, but I don't care what his motivation is to speak and act out against pork spending... he's right.

He's pro-life, a realist on foreign policy, fiscally disciplined. He's only really wrong on a few major issues... if he moves right on immigration and perhaps taxes I think he would be fine.

Of course, he has to reverse his image with the base, and that may not be possible.

I like Kyl and lot and think he would be a good Presidential candidate, but his political influence is kind of limited... he's overshadowed by McCain and his Senate accomplishments are not awe-inspiring (though his voting record is sterling).

Even if you don't agree that the strength of the dollar represents the confidence of worldwide investors in the fiscal soundness of the US (it does; but yes, there are many other factors at play) you have to grant that the national debt is bigger than, well, ever. I don't mean the deficit--I mean the debt. Which is financed by Chinese banks. Which could end us, I mean completely end us, by failing to continue to extend credit.

That's security?

The conservatives I grew up with, in Texas, believed in self-sufficiency. Whatever happened to neither a borrower nor a lender be?

The House had an even worse week in terms of fiscal responsibility because it considered "postal reform" in addition to the Energy and Transportation bills. On Tuesday, the House passed H.R. 22, a $6 billion boondoggle to bail out the Postal Service by shifting pension costs to the taxpayer.  This was one of those unfortunate situations when labor and business (think reduced postal rates for financial services companies and catalogue companies) get together and screw the taxpayer.  It passed overwhelmingly.  

I think it's a great topic to talk about.  Exactly what is it that we conservatives find important?

McCain gets a ton of grief and most of it is warranted.  But for the life of me I can't figure out why I read so much complaining about Bush's record on fiscal issues and yet the same people call McCain a RINO.

To me the Republican Party stands for two things above all else - fiscal responsibility (including tax cuts) and national responsibility.

McCain is solid on both.  In fact, he has been a more articulate defender of Bush's foreign policy than anyone in the administration.  I am not sure we could have a better successor to Bush on the War on Terror - period.

McCain is better than Bush on pork and rampant spending - Bush a bit better on pro-growth policies like tax cuts.  Both are a thousand times better than Hillary Rodham Carter, er, I mean Clinton - or ANY democrat...

And unlike a lot of people I see touted around here (Sam Brownback for one) - McCain is electable.

I don't love the guy - I supported Bush in '00 in the primary and am proud to have done so.  But with George W term-limited, McCain is easily the natural heir to the movement...

You talk of party association as if Republican or Democrat is a race into which you are born.  I think it's more likely that the in-theory fiscal conservatism of the GOP is being beaten out by the corrupting nature of power.  If pork brings reelection better than standing on principle, then pork will rule the day, regardless of what party is in power.

What parties stand for changes as society changes.  I read somewhere that every Congressional district in the nation received pork in these two bills, so I'd read the votes for their direct meaning instead of reading between the lines and assuming knee-jerk reactiveness.

If you continue to excuse bad fiscal behavior based on partisanship, then bad fiscal behavior is not going to change.

He was opposed to the provision that required an inventory of oil and gas potential in offshore waters. It's political poison in Florida.

So Martinez' vote was more political, parochial than principled, and it was certainly not anti-pork.

"McCain gets a ton of grief and most of it is warranted.  But for the life of me I can't figure out why I read so much complaining about Bush's record on fiscal issues and yet the same people call McCain a RINO."

And some of us can't stand either guy on domestic issues, and couldn't stomach voting Republican for President in 2000.

That's what I see happening again in 2008 at this rate...

From The Day (registration required):

And Chafee said that he had several major problems with the bill, including its failure to reduce the nation's dependence on foreign oil, increase fuel economy for vehicles and expand support for alternative energies. Expanding the Federal Energy Regulatory Commission's authority over LNG plants, he said, was another significant issue.

At least Sununu's vote against the energ bill appears based on skepticism toward economic planning. He's a reliable Republican conservative who deserves more attention and praise, I think.

#32

You are irrelevant to this entire conversation.  That's not meant to be an insult.  Just to say that if you aren't going to vote for Bush or McCain for social issues, then you are probably voting Democrat or for some wacko nutjob Pat Buchanan party.

My target audience is Republicans who either like Bush but don't like McCain or who are upset with Bush over fiscal issues and don't realize that McCain is solid on those issues and would rather stay home than vote for him over Hillary or some other Dem.

Maybe I'm not your target audience.  I'm not an open borders, Kyoto protocol nutjob McCainiac.

Well, if you couldn't vote for Bush over Gore in 2000 then I have a hard time believing you would EVER vote Republican.

For your information, I voted a mixed Republican and Libertarian ticket before the Libertarians went off the deep end on September 11, 2001.  Since then, I've voted straight Republican.

As of now, I'm more likely to leave my ballot for President blank, than vote for any of the leading Republicans.

I could never vote Democrat.  Never have, never will (barring a visit into opposite land where  Markos Moulitsas runs bluestate.org, Rich Lowry edits the New York Times, and Tim Russert is relegated to AM radio).

Voting libertarian and voting Dem are almost the same thing.  One is wasting your vote and the other is treason.  Either way you are better off staying home rather than voting.

You said you couldn't stomach voting for Bush in 2000.  Whether you actually pulled the lever for Gore is irrelevant - you were willing to risk turning the country over to Al Gore - that is sinful.

Even if you don't agree that the strength of the dollar represents the confidence of worldwide investors in the fiscal soundness of the US (it does; but yes, there are many other factors at play)

Not in the way you think it does. What does dollar "strength" mean? When we talk about stock market strength we mean a market climbing. That doesn't apply to the dollar. Dollar "strength" is stability. When the dollar is climbing from an equilibrium, that isn't good. It climbs because the Fed isn't properly balancing the supply of dollars with their demand.

When the dollar climbed way too high through the last half of the '90s to 2000, it needed to be come back down. Deflation and all that fun stuff. The dropping dollar was a good thing, so we can stop all this nonsense about a weak dollar. When gold as at $450, I would have agreed that the dollar was too weak, but not now.

you have to grant that the national debt is bigger than, well, ever.

Exactly what this has to do with my post I am mystified by. Yep, the Republican Congress backed by a pliant President has grown spending far beyond what it should be and was only able to get about half of the tax cut correct with the other half just being money down the drain. I still don't know what this has to do with my other post though.

Which is financed by Chinese banks. Which could end us, I mean completely end us, by failing to continue to extend credit.

And if Europe stopped selling to us and buying from us, our economy would crumble. But that isn't going to happen because we both gain from the exchange. The same goes for China. Anything they could possible do to us would affect their economy far greater.

But we have even less to worry about because ost of this US debt held in China is by private entities (citizens and businesses). The Chinese govt can't really do much about that except make a law declaring it illegal to buy US govt bonds. Then the govt would have to find a way to enforce it around the black market that would spring up fed by the internationalization of finance.

China still isn't even our largest bond holder or even close. I have the 2004 Treasury report around here somewhere, but you can go find it yourself. Japan and Europe swamp China is terms of toal ownership of US debt. The thing with China was the increasing role it played, but still relatively small compared to the global bond markets.

Whatever happened to neither a borrower nor a lender be?

Huh? Considering the tremendously low interest rates China purchased our debt for, I'd say they are the one on the wrong end.

I don't think you comprehend the size of the global debt markets and how insignificant China is in the grand scheme.

It's really not that surprising since Kristol and the Weekly Standard were some of the most ardent McCain supporters during the 2000 presidential primary.  

I'd rather work toward the Republican party nominating a candidate actually worth voting for, instead of just smearing those who balk at "compassionate conservatism" (which is really an implicit hit on Ronald Reagan when you think about it).

Even if you don't agree that the strength of the dollar represents the confidence of worldwide investors in the fiscal soundness of the US (it does; but yes, there are many other factors at play) you have to grant that the national debt is bigger than, well, ever.

As a percentage of GDP, US debt is comparable to or less than that of most major developed nations.  Of course, I would like to see the deficit come down to a percentage well below that of GDP growth so that debt to GDP ratio will drop.  

Which is financed by Chinese banks. Which could end us, I mean completely end us, by failing to continue to extend credit.

OK, now you are talking nonsense.  What exactly do you mean by "completely end us"?  The US will cease to exist?  We will become a third world country?  The simple fact of the matter is that if Chinese fail to invest the surplus of dollars in treasury bonds, interest rates will change, exchange rates will be altered, and Americans will end up by fewer Chinese goods.  Life will go on, but Americans will pay more for fewer consumer goods.  And that will be because the Chinese will no longer be competitive producing goods for their best customers and the infrastructure built up to produce goods for those customers will go to waste and the employees producing those goods will be out of jobs.  There will be dislocations on the US side as well, most of them in the wealth exporting retail sector that has grown far too large.

If you want to blame someone for creating this situation, blame Clinton for not doing anything about the Chinese devaluation of their currency in 1994.  It was a significant contributory factor to the Asian financial crisis of 97 and 98, as Asian countries were no longer competitive with China and had trouble paying off dollar denominated debt and maintaining currency reserves.  The lack of confidence in Asian currencies and economies led to the dollar bubble that lasted from 1998 to 2003, which helped to finance the stock market bubble and burst from 1999 to 2001.  The stock market bubble was driven partially by the dollar bubble, as foreign investors continuously pumped money into the US markets because they were making even more money as both the investments and the currency were going up at the same time, all the while the price earnings ratios for those equities were going sky high, indicating that American companies profits were not growing fast enough to justify the prices of their shares.  And why were they not growing fast enough?  Because American companies were no longer competitive against foreign competition because of the strong dollar.  In response to the strength of the currency and the lack of competitiveness, US companies increased offshore production and outsourcing and technology transfer, which led to a surge in the trade deficit as imported goods became competitive rapidly.   And now those dollars are back financing the trade deficit and budget deficit.

You SHOULD keep working to get your guy the nomination - no question.  Perhaps you and I will even be working for the same guy.  But you and I disagree after that.  I feel like any Republican is better than any Democrat - and in this day and age those are the two choices.  So regardless of who wins the nomination I will ALWAYS vote for that guy or gal.  Because I am not a poor sport who takes his marbles home if he doesn't get his way.

Primaries are for picking the best Republican possible.  Novembers are for beating the democrats - not making a point to feel good about yourself.

There are many fine Democrats who may be wrong or just have an honest disagreement but that does not make them traitors.  Also that sort of rhetoric invariably backfires on the person making it and unfortunately any who might be associated with it.

Treasonous to the party...

While China certainly could declare a State policy of refusing to purchase future bonds from the U.S. in order to wreak havoc upon our economy, Congress could just as easily turn around and say that any and all outstanding bonds held by China are null and void, rendering any existing debt to China obsolete.  We could then use that debt cushion to finance new debt, either to ourselves or to other countries willing to help us out.  Messy, but possible.  

International finance is built on a multi-layered system that is enormously complex, much more so than you seem to think.  Even if China wanted to hurt us economically like that, there is no  way to accurately predict the outcome since the entire global economic system is predicated on the demands of American consumers.  If we stop buying things, or can't afford to buy things, China has few other markets to sell their things and keep their economy humming too.  So they'd hurt themselves deeply at the same time.

Not that this will always be the way of things, but until some other society becomes as consumer-oriented as ours is, the U.S. will drive the global economy.

that has to be a good thing, if not more often.

While China certainly could declare a State policy of refusing to purchase future bonds from the U.S. in order to wreak havoc upon our economy, Congress could just as easily turn around and say that any and all outstanding bonds held by China are null and void, rendering any existing debt to China obsolete.  We could then use that debt cushion to finance new debt, either to ourselves or to other countries willing to help us out.  Messy, but possible.

That's a mighty amount of hubris.  You think that the US could just default on all of our debt to China?  Not even counting just what the Chinese might do in (possibly armed) response to such an action, do you really think that the rest of the world would have any faith left in US credit if we just declared that all debt to China was null?  I think we'd be a banana republic in a blink of an eye.  Would you lend to a company that just told one of its biggest creditors that its debt was null?

to the crazy idea upthread of

Which is financed by Chinese banks. Which could end us, I mean completely end us, by failing to continue to extend credit.

Yes, I totally agree with you that if we were to use my crazy idea in response, it would signal the end of international finance and the beginning of a very long and messy global military war.

But, theoretically speaking, if China establised a state policy of refusing to buy bonds or demanded early payment of bonds in order to wreak havoc on our economoy, or force us to change policy on say, Taiwan, we could indeed look at any and all available options, including my admittedly crazy scheme.

But, since China would never establish such a policy (or at least articulate such a policy) we would, indeed, be unable to persue that crazy, crazy policy option.

As Virginia Postrel points out, combine news of this lack of fiscal responsibility with the outrage going on over Bill Frist supporting federal funding for ESC research, and the GOP is starting to look more and more like the party of the religious right.  That will leave a lot of people -- for example, me -- outside the tent looking in, and ultimately, looking elsewhere.

If the three pillars of the modern Republican party are (reductively speaking) Strong National Defense, Fiscal Responsibility/Small Government, and Conservative Values (Life, Family, etc.), I think it's fair to say that most Republicans truly embrace two of the three pillars at any given time, while conceding the third pillar in the name of unity.  Remove one of those pillars altogether, and we're going to have issues.

-TS

And we'll put my low opinion of Postrel to the side. The Majority Leader in the Senate backs a bill that has broad support in the Party in both Houses, and you're angry that the social conservatives are hacked that he's knocking over their pillar?

That's ridiculous. It undermines not only your fundamental premise about how the tent is constructed, but it also ignores human nature and the political reality on the ground.

"It's too big a market to ignore"...kowalski

Every day I become more and more convinced that we have moved away from capitalism to an out and out kleptocracy and away from a democratic repulic to an unholy marriage of government and extraordinarily powerful multinational special interests.  A government from which individuals, families, children, small business owners, etc. are shut out.  Someone or other once defined that as fascism. I don't know about that, but I certainly fear that whatever you want to call it; it is a short sighted amoral, if not immoral, type of government.   Frist's flop on stem cell research, the pork laden Energy and Highway bills all combine to point this out.  

As a hardcore capitalist, I never thought I would come to fear big business.  But it seems to me that something has gone awry.  Somewhere along the way, we have so gamed the market, with subsidies and tax breaks, that I am not sure we can even call it capitalism any more.  Even worse, players in the market have ceased to make rational decisions which the market requires to function properly.  I guess I always assumed that because I tend to act rationally, so would others.  OTOH, all I have to look do is look around me to see evidence of people acting irrationally.  Well over half the people I see are busy eating themselves into the grave and/or horrific health problems.  This country's problem with obesity seems to me to be emblematic of our collective loss of rationality in the face of any opportunity for self-gratification.

I think it's related to what Thomas said - People are scum.  And as such, they are unable to make decisions that are truly in their best interests and instead only make decisions that result in their own immediate gratification, no matter how ill advised,or how immoral, or how contrary to their self interest in the long run.  I am beginning to think that like most traits God endowed man with, selfishness is as much a vice as a virtue, whatever Ayn may have said.  Actually, I guess God warned us about that.  He called it gluttony.  

So now, we are willing to tolerate the poisioning our own air and water in the name of immediate gratification and quarterly profits.  We are in bed with Saudi terrorists and indirectly funding madrassas in the name of immediate gratification because we are addicted to unlimited amounts of cheap oil.    We are willing to allow our borders to be open to common variety law breakers and to others who make no bones about their desire to kill us, all in the name of immediate gratification and cheap labor.  This list goes on and on.

The logical extension of which is that we are now willing to slice and dice unborn children in the name of immediate gratification and, as kowalski put it,  The Next Big Thing, market-wise.

I've often wondered at what point I would have enough signs that I'd quit attributing my concerns to tinfoil-hat-type paranoia and begin to seriously consider the possibly that things are going terribly wrong.

I may be there now.

I am pretty darn unhappy with many current policies - especially the non-stop pork fest and a president who doesn't have the guts to veto anything.  I'm thinking the best thing to do is to split the ticket and hamstring the whole lot them.  Checks on power are probably the taxpayer's best friend.  I'd settle for no more tax cuts if we could rein in spending some.

my point, which is that the GOP's straying from principles of smaller government and fiscal responsibility, a straying that is not limited to one Senator (albeit Majority Leader) but to the majority of the elected representatives of the GOP, knocks one of the pillars of the modern Republican/Conservative movement down.

Now, combine this with the outrage (understandable, mind you, even if I don't happen to share the passion that the SoCons are feeling over it) over Frist's flip-flop, and we may have a problem.

Let's assume that no matter what stripe of Conservative you are, you support the principle of Strong National Defense.  That's one common ground.

Let's also assume that differences exist between the SoCons and the EconCons over social issues such as abortion and federal funding for ESC research.  However Frist or any other leader came out on these issues, one side or the other of the Party is bound to disagree.

What binds us together as a party, then, is the common ground of Small Government, Fiscal Responsibility.  EconCons like myself concede the social issues in order to further our goals of smaller government and fiscal responsibility.  SoCons tolerate our "liberal" stance on social issues to further our goals of smaller government and fiscal responsibility.

But the Highway Bill and the Energy Bill, taken together with the Medicare entitlements along with others, suggest that now that the Republican Party is in power, it does not intend to implement the principles of smaller government and fiscal responsibility.

That makes this whole affair sadder and potentially more problematic in my opinion.

-TS

But the Highway Bill and the Energy Bill, taken together with the Medicare entitlements along with others, suggest that now that the Republican Party is in power, it does not intend to implement the principles of smaller government and fiscal responsibility.

Not to be blunt, but of course not.  The object of the game in politics is to accumulate power.  That is also part of human nature.  One of the surest paths to electoral success is buying votes.  That means the combination of tax cuts and spending increases.  The Republican Party is very good at playing the political game, so much so that they have the presidency until 2008, and in all probability the Senate until at least 2008 and the House until 2012.  Why should they change a winning strategy now?  As long as fiscal conservatives are satisfied with tax cuts now at the expense of offsetting (or even larger) tax increases in the future, there is absolutely no reason for the GOP to change the formula.

As a fiscally conservative* Democrat I am not an unbiased observer, but I believe those who vote based on fiscal conservatism need to be aligned with the opposition to power in Washington, not one party or the other.  By its nature, fiscal conservatism is the restraint of power, and you will rarely find that in the party wielding power.

* conservative = budget hawk, not whatever the "conservative" political party does

too often means "Focus on the Deficit ==> Higher taxes" when coming from a Democrat, although I don't know if that applies to you.

Conservative as I mean it means, "Smaller government, lower taxes, less regulation".  I believe that the Republican Party represents, or represented, this movement, and I do hope it gets back to the roots.

I do not, to be blunt, see the Democrats moving in this direction anytime soon.  Nor, for that matter, do I see the Democrats moving in the direction of Stronger National Defense anytime soon, which is another key pillar.

-TS

It appears that Neo-Conservatives have changed their economic philosophy.     Big government and deficit spending is only bad if  it doesn't help big business interests get richer, and doesn't help the Republicans stay in power (just a different version of vote buying).

It used to be that Conservatives were REALLY  against big government and  big spending.  Neo-conservatives seem to subordinate all  other political and philosophical principles to economic wealth, as measured in agggregate, not  individual terms.   Since certain economic  interests benefit from deficit spending, trade imbalances, national debt, illegal immigration, outsourcing, etc., the hell with all non-economic considerations. The most important thing is making money and staying in power!  Do you think that they eventually will be found out?

Re: It used to be that Conservatives were REALLY  against big government and  big spending.

Yes, and that was when they were the minority party and had rather limited ability to gorge at the pork troughs of Washington. It's easy to make virtue out of necessity.

I think it is that whole power being corrupting thing at work.

It is a lot easier to have standards, when you have a hard time getting your hand into the trough, but when access to the trough becomes easier, it is a whole lot more difficult to excersize any restraint.

I think politics and bringing home the bacon is way too intertwined-and even the fiscally conservatives-the true believers aren't above dipping into the public trough, when it suits them.

I argue that Bush and the GOP has raised taxes, not lowered them, through extraordinary spending.  Spending will eventually be paid for, whether by ourselves or our children.  The deficits just shift that balance to our children and raise their taxes.  My personal view is tightwadish on spending, and favors taxing ourselves over taxing our children.  My basic philosophy can be summed up as follows: If we aren't willing to pay for our own spending, then why the heck should we make our children pay for it?  If we aren't willing to pay for spending, then maybe we shouldn't be doing the spending in the first place.  How much we actually spend is actually less an issue for me than being honest about it.

I do not, to be blunt, see the Democrats moving in this direction anytime soon.

Democrats at least support Pay-As-You-Go, which means we have to make the choice now about whether we should have less spending or more taxes.

Nor, for that matter, do I see the Democrats moving in the direction of Stronger National Defense anytime soon, which is another key pillar.

I would argue that George W. Bush has seriously weakened the United States by overburdening and overcommitting our military while not adequately addressing more serious threats.  From a fiscally conservative standpoint, the Defense Department is a major recipient of wasteful spending as well.

I should have caught the tone of the thread before responding.  Thanks for the clarification.

 
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