By: Victor Davis Hanson
Obama and his EU counterparts are learning that high-minded adolescence makes for bad governance. But it’s an expensive lesson.
Old laws predicated on human nature cannot so easily be discarded — even by utopians who think they have the power to cool the planet and stop the rising seas. Borrowed money really has to be paid back. Governments cannot operate without confidentiality. Nations perish if they cannot protect themselves from existential threats. Watching a therapeutic Barack Obama grow up and learn these tragic lessons is as enlightening as it is sometimes scary.
Here in America the same fiscal rules have not disappeared. In California, Governor-elect Jerry Brown will have few choices in January 2011. Since he cannot raise taxes much in a state that already has the nation’s highest income and sales taxes, he can only find a way to cut expenditures. He must then either finesse such reductions with a sort of green philosophy of “small is better” or plead that his reactionary predecessor gave him, a compassionate liberal, no choice. Either way, the creditors and bondholders must be paid. Even Barack Obama, after spending $1.3 trillion more this year than the government took in, now seeks to save a few billion dollars by freezing federal wages.
In short, from Sacramento to Athens the world is reminded that obligations, despite in-vogue euphemisms like “stimulus” and “Keynesian,” really do have to be met. There is an iron law that transcends politics and limits the application of fiscal liberalism: Print more money and money becomes less valuable; default just once and all future credit is lost or intolerably expensive.