In Bailout Era, No Room Left For Old Virtues

From IBD Editorials:

Printing trillions more dollars and growing government to cover new debts isn't so bad if we call it "stimulus." That is far smarter than saying something honest like, "I propose a new $1 trillion debt program."

The old-fashioned spendthrift policies we used to ridicule as congressional pork and "earmarks" are now justified under that ubiquitous nice word, "stimulus."

No matter — the proposed "don't waste a crisis" cure seems to use that model of government-guaranteed corporations to absorb as much of the economy as possible.

Still, no one knows whether the present borrowing and printing of money to give short-term credits, cash grants and jobs to Americans will get the economy moving again or simply reinforce the bad habits that got us here in the first place.

The existing pre-stimulus annual budget was already set to run about a half-trillion-dollar deficit. The present government debt, much of it to Asia and Europe, was nearing $13 trillion even before the latest borrowing plans.

We are going to have to pay these debts back by cutting federal spending and entitlements or raising taxes — or both. Or we can convince panicky debt holders abroad to loan us even more money for years at near-zero interest rates. Or we can try simply printing trillions of new dollars to inflate the economy, while hoping that creditors don't mind being paid with funny money.

What got us in this debacle was the lack of self-control on the part of consumers who borrowed to spend more than they could pay back, rapid growth in government debt, and Wall Street speculators who wanted obscene returns they had not earned.