OMG, A Fiscal Responsibility Sighting
This should make Bruce Bartlett very happy.
From the Associated Press, courtesy of TPM:
Obama: Bailout likely to delay spending programs
Obama says massive financial bailout probably would delay his spending initiatives
DOUGLASS K. DANIEL
AP News
Sep 23, 2008 08:52 EST
Democratic presidential candidate Barack Obama says he probably would have to delay the spending programs he has called for during his campaign in light of the massive government bailout being proposed for the nation's financial industry.
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"Does that mean I can do everything that I've called for in this campaign right away? Probably not," he said. "I think we're going to have to phase it in."
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In a speech Monday, Obama urged Democrats to be as fiscally tough as conservative Republicans and said that the bailout was forcing a new perspective on the federal budget.
Slay the Beast?
It's been noted elsewhere, including I believe, by Krugman, that the next President and Congress won't have the spare cash to significantly expand the federal governemnt's reach. For smaller governemnt types, this may make the prospect of an Obama administration a little less frightening, though doubtless the potential for gridlock via divided government is still attractive.
Or Beast Wins?
Yes, Obama's spending options will be few. All that talk about change, however well intentioned, will fade away, and the new reality will assert itself with a vengance. Everyone now supposes that we will be putting the $700 billion on the cuff, in addition to the cost of national health insurance, etc. etc. This, however, will be for our creditors to decide, not the new President, not Congress. In fact, once we wake up to realize that we still have gaping fiscal and trade deficits, and have forgotten to fix social security, just getting through to the end of the recession will be extraordinarily difficult. We will still have to recapitalize the banking system, fix consumer credit, and find many, many (several million?) people a place to live.
There will likely be far too much social unrest and turmoil to permit a nice gentlemanly game of Congressional Gridlock. I wouldn't be surprised if the Democratic majorities are enough to permit Obama to avoid gridlock, ending any attractiveness the option may have had for you. But you are right that government will be smaller. The difficulty is that the problems will be so much larger and the need for solutions much more urgent. So the beast may yet produce some real redistribution.