Thomas E. Woods Jr. didn’t need to read President Obama’s new budget proposal to know the disasters lurking within its pages.
The author’s new book, Rollback: Repealing Big Government Before the Coming Fiscal Collapse, charts the current economic crisis, along with the President’s inability to rein in spending. Woods doesn’t just dismantle the Left’s arguments vis a vis the economy and big-government machinations. He chides Republican Party stalwarts including Newt Gingrich for embracing policies sure to expand an already bloated deficit.
Woods breaks down complicated fiscal matters in a way both policy wonks and economic neophytes can understand. The author understands the odds against today’s politicians taking his advice to heart. It’s a necessary book all the same, offering credible solutions to problems that won’t go away anytime soon.
The current economic scenario can be partially pinned on an aging population combined with shrinking fertility rates Add unsustainable entitlement programs and politicians unwilling to slash them, and it seems impossible to avoid a crisis in the near future.
President Obama’s nearly $900 billion stimulus package didn’t help matters, but it’s his ObamaCare legislation that will wreak even more damage on the country’s finances. Woods quickly sketches out the modern history of health care, describing how rare health insurance was in the early parts of the 20th century. Later, programs such as Medicare and Medicaid “artificially stimulated” the health care market. The decrease in catastrophic care coverage, part of the ObamaCare initiative, strips away plans that exert downward pressure on medical costs.
Socialized medical programs aren’t the solution, because they dampen innovation, lead to lengthy wait times, and entail shortages on vital treatments.
The “change” Obama promised during his presidential campaign has been more of the same destructive policies of the past, plus a few new wrinkles. The President attacked the previous administration’s efforts as if the free market had let the country down, adding more regulation into the legislative mix. But the reality is far different.
Government-sponsored enterprises such as Fannie Mae and Freddie Mac created an atmosphere in which risky mortgages thrived, and even a so-called sage such as Alan Greenspan couldn’t foresee the damage a flood of lower lending standards could have on the economy.
All the while, politicians including Congressman Barney Frank, a Democrat from Massachusetts, extolled how the system kept housing prices high, and firms deemed “too big to fail” used that artificial advantage over the competition.
The Federal Reserve System often takes the blame when citizens bemoan the current economy. Woods contends they’re on to something. The dollar has lost more than 95 percent of its value since the 1914 passage of the “Federal Reserve Act.” And the age of central banks has led to more banking crises, not fewer.
Woods spends an entire chapter deconstructing the myth of good government, explaining how historically governments “enrich the few at the expense of the many.” He points to a landmark study by social scientist Charles Murray that showed poverty endured not “in spite of anti-poverty programs, but because of them.”
Those who argue private charity couldn’t possible serve the poor as well as government programs don’t have enough facts on their side, he argues. At least two-thirds of money funneled to welfare programs goes missing in a crush of bureaucracy.
Liberals often point to Sweden as an example of a thriving welfare state, but Woods recalls comments from Swedish Prime Minister Fredrik Reinfeldt explaining how his country’s system relies on the free market to fuel its programs. Said programs, Reinfeldt added, are eating up funding faster than it can be made.
Government-funded science is another area ripe for pruning. Consider how Great Britain’s scientific community in the 19th century, without any government assistance, outperformed both France and Germany. In modern times, Japan’s thriving scientific communities are almost universally driven by private funds.
Military spending is one area where conservatives walk in virtual lockstep regarding possible budget cuts. Even scalpel-sized trimmings are simply “off the table.” Woods argues that’s a mistake.
“Military spending constitutes the classic example of parasitic growth,” he writes, adding that the cost to train a single combat pilot comes to between $5 million and $7 million. He points to the C130J prop plane as just one example of an ill-advised weapons purchase, and urges conservatives to reconsider their blanket protection of the military budget.
Rollback ends with a flurry of ideas Woods believes could turn the country’s economic ship around. They include Social Security and Medicare opt-outs, equitably spread cuts across every federal spending category, state nullification, and using humor and creativity to break through the media’s biased news filters.
But he’s under no delusion they’ll be embraced—at least at first. The facts on the ground may change that situation, he contends.
“Crises have a way of opening minds,” Woods writes.