Fri, 10 Apr 2009 00:53:17 +0000 – By Mallory FactorMerchant Banker/Co-Founder and Co-Chairman, Monday Meeting
Last Tuesday Thomas Frank published an opinion piecein the Wall Street Journal about Gov. Mark Sanford of South Carolina. Frank used his space in The Journal, in an article called "18th- Century Man: South Carolina's governor is touchingly naive," to toss insults at Sanford that were both condescending and pompous--all because he wanted to use a portion of his state's share of the new federal "stimulus" money to pay down South Carolina's debt. Yes, I know, it might seem silly to devote time to refuting someone who can't understand the importance of paying debts.
But it's worth responding to Frank's article--not only because The Journal's opinion page is read by a lot of people, but also because the article stands as a remarkable illustration of the left's inability to cope with anyone who suggests that the Democratic White House and Congress have not cornered the market on wisdom.
The federal government's colossal deficit spending isn't just some distraction. These are real debts. And real debts have to be paid back with real money.
Having known Mark Sanford for quite a number of years, I can assure Frank that the governor wouldn't know how to strike a "pose" even if he wanted to. When he proposed to take roughly 10 percent of South Carolina's stimulus money -- about $700 million -- and put it towards the state's debt, he was, it seems to me, doing what any business or family would do with an unexpected windfall: use at least a portion of it to pay off the mortgage or some other outstanding obligation.
Yet Frank's response to such a simple and commonsensical proposal is to level charges of "hypocrisy."
But this isn't about Sanford. The fact that Frank seems so undone by the actions of a small state's governor says more about the brittleness of his left-liberal ideology than it does about Sanford. What is Frank so afraid of? That Sanford's idea--that reducing debt is better than increasing debt --will somehow catch hold among the commonsensical middle of America? Hmm. Maybe that's exactly why Frank is so hysterical in his attack on Sanford: he's afraid that most folks will agree with the conservative Sanford, and not the liberal President Obama and his like-minded colleagues in the Congress.
The governor, after all, is only trying to address what anybody, on the left or right, ought to acknowledge as a serious long-term problem. Sanford's South Carolina -- like many other states and, to a much greater degree, like the federal government itself -- is facing a tremendous debt obligation. The state is now fourth in the nation with respect to the percentage of tax revenue spent on debt service--that is, the millions of taxpayer dollars that don't go to schools or bridges or anything else that Frank presumably thinks are important governmental responsibilities. Further, the state's pension plan has fallen to the bottom 15 percent of plans nationwide in unfunded liabilities. If these and related problems continue to go unaddressed, later generations of South Carolinians will face the consequences in the form of tax hikes, benefit cuts, and recession.
Sanford takes those dangers seriously; obviously Frank doesn't. Indeed he waves aside the problem of massive deficit spending as "the issue of the day," sounding rather like a teenager dismissing his parents' concerns about his expanding credit card bill. But the federal government's colossal deficit spending isn't just some distraction. These are real debts. And real debts have to be paid back with real money. This year, the federal deficit will likely hit 12 percent of GDP, a number we haven't come close to touching since World War II. Worse, our national debt is at almost 100 percent of GDP -- and that's not including the unfunded promises of Social Security, Medicare, and Medicaid. The reason why Sanford insists on making these numbers 'the issue of the day" is precisely because he doesn't want them to be the critical crisis of tomorrow.
We're in a melancholy situation when left-wing commentators can't even bring themselves to acknowledge that massive government overspending and debt are a problem. Frank would do well to remember a principle much older than the 18th Century--paying for what you owe before you spend more. More people rediscovering that simple truism would serve our country well right now.
And oh, by the way, please allow me to add a word or two about the "18th century men," whom Frank is so eager to dismiss as "naive." That's the century that gave us George Washington, Thomas Jefferson, Ben Franklin, and James Madison, to name just a few immortals from that illustrious era. In fact, poor Mr. Frank could learn a lot from those times, if he weren't so busy hurling snide insults.
Mallory Factor is a merchant banker and the co-chairman and co-founder of the Monday Meeting, an influential gathering of economic conservatives, journalists, and corporate leaders in New York City.