Now that President Obama has taken the “Harry Truman pledge” about the economy by saying “The buck stops with me,” it also seems appropriate for him to take the “Colin Powell pledge” by acknowledging of himself, “Once you break it, you are going to own it.”
By Jon Kraushar
The first quote is a paraphrase of the sign on former President Truman’s desk reading, “The buck stops here” and the second is what former Secretary of State Powell says he told President Bush in 2002 about the danger of invading Iraq. Powell told The Atlantic magazine:
…what I did say was…once you break it, you are going to own it, and we’re going to be responsible for 26 million people standing there looking at us…And it’s going to take all the oxygen out of the political environment …
The real problem with Obama and the sentiments expressed in the two quotes above is that while the president would pay a political price by failing to turn around the economy, the buck actually stops with taxpayers and if the economy becomes even more broken we, the taxpayers, will own the consequences.
The question is, will Obama clean up this mess or add to it? Our fortunes—in every sense of the word—are riding on the outcome of that gamble.
The total tab for taxpayers is already mind-boggling. So far, it includes the $410-billion omnibus spending bill (with more than 8,500 earmarks) that Obama signed on March 11. Then there’s the $787-billion economic stimulus bill which passed with no Republican support in the House and only three Republican votes in the Senate. On Friday, the Congressional Budget Office predicted that the president’s proposed budget would produce a $9.3-trillion deficit during the period from 2010-19. That’s $2.3 trillion worse than the White House predicted in its budget and, if accurate, would make the deficit unsustainable, according to the president’s own budget director!
Further raising the stakes is a new program announced on Monday by Treasury Secretary Timothy Geithner that would partner the Federal Reserve, the Federal Deposit Insurance Corporation and the Treasury Department with private investors to buy from banks at a discount up to $1 trillion in deeply distressed (aka “toxic”) assets—mostly from soured mortgage loans—with the goal of finally properly pricing the assets and then, hopefully, selling them at a profit in the future. Hopefully.
According to The Wall Street Journal this past weekend:
“To encourage investors to buy those assets, the U.S. government will offer lucrative subsidies and shoulder much of the risk.”
That risk and other unknowns in all of this are staggering. Not since the Great Depression have we bet “the house”— “the house” being the economy—to this extent.
Both the danger and the opportunity of the situation take on additional meaning when you look into the origin of Truman’s phrase. “The buck stops here” derives from the expression “pass the buck.” In frontier days, during poker games, a knife with a buckhorn handle was placed in front of the person meant to deal next and if they didn’t want to, they “passed the buck.”
We’ve let Obama do the dealing and the stack of chips he’s gambling with is huge. — After all it’s our money and our nest eggs! The president could bankrupt our country (as New Hampshire Republican Senator Judd Gregg warned recently) or his plans could help it rebound, as Christina Romer, head of the White House Council of Economic Advisors has predicted.