As our country approaches the hour of decision on raising the federal government’s debt limit, several conservative sources have offered different plans to prevent the national government bankruptcy that every sensible person knows is inevitable unless major systemic changes are made. If some systemic changes are made in connection with raising the debt limit, those changes will, at best, “kick the can down the road,” leaving yet to be achieved the major reforms necessary to solve America’s long-term fiscal crisis.
Prosperity will not return until the uncertainty which grips the private sector is relaxed. The economy will get worse as the dollar drops in value. Interest rates across the economy will surge upward as soon as purchasers cannot be found for U.S. government debt at the currently low interest rates. Inflation will do more than creep up when all the money created out of thin air in recent years finally has the effect Milton Friedman predicted and the Federal Reserve is seen to have run out of useful ways to mask the effects of so much fiat money.
The greater the number of well-thought-out plans offered now to incentivize growth, the better. Each new, reasonable plan brings its supporters into the fray. plan may turn out to motivate the newly active conservative grassroots activists to maintain and increase their campaign participation in 2012.
The next elections may put into office sufficient numbers of politicians who are ready to enact measures to enable economic growth through limiting the burden of government, primarily through cutting spending and taxes and eliminating counter-productive regulations. The supporters of the various constructive plans will unite and pass these good changes. That is, we will do this if we are wise.
History often teaches useful lessons. Conservatives should familiarize ourselves with the story of the French monarchists after Franco-Prussian War and the fall of Napoleon III’s empire in 1870. Monarchists won a comfortable majority in the new National Assembly, but they were divided into supporters of the senior Bourbon line (Legitimists) and supporters of the Orleanists (King Louis Phillipe’s family). The two sides negotiated and agreed that the senior line’s comte de Chambord would become king. He was an old man, unlikely to have children, and the last male of the senior line. Upon Chambord’s death, the comte de Paris, head of the Orleanist branch of the Bourbons, would unquestionably be the legitimate heir to the throne.
Unfortunately for their cause, the two sides couldn’t agree on the flag of a restored monarchy. Chambord demanded the old regime’s field of lilies flag. The Orleanists insisted on the revolutionary tricolor flag, which Louis Phillipe had adopted for his July 1830 monarchy. The two sets of monarchists stubbornly deadlocked. Time passed. Popular opinion shifted, and special elections resulted in the defeat of so many monarchists on both sides that the republicans gained a majority – and the hopes of French monarchists were dashed, probably forever.
When the time comes for united action, U.S. conservatives should act more wisely than the French Bourbons did.