Academic journal article The Journal of Social, Political, and Economic Studies

Keeping the Republic: Saving America by Trusting Americans

Academic journal article The Journal of Social, Political, and Economic Studies

Keeping the Republic: Saving America by Trusting Americans

Article excerpt

Keeping the Republic: Saving America by Trusting Americans

Mitch Daniels

Sentinel, 2012

Mitch Daniels, now the president of Purdue University, was the governor of Indiana for two four-year terms running from 2005 until early 2013. His career has included a number of roles in public and private life: many years in the pharmaceutical industry, chief of staffto U.S. Senator Richard Lugar, senior aide to President Ronald Reagan, president of the Hudson Institute (a think tank), and director of the U.S. Office of Management and Budget under President George W. Bush from January 2001 until June 2003.

Much, if not all, of this experience, but most especially his work with the federal budget, has fed into the perception that is the central focus of this book: that the amount of federal debt has grown, and is continuing to grow, to a level that mathematically the United States will not be able to handle, no matter how much taxes are increased or spending cut, unless economic growth becomes sufficient to allow the United States to transcend the problem. So great are the potential consequences of a failure to deal with this debt that Daniels sees the debt as posing what is, in effect, an existential threat to the country. "Our debts imperil our republic in a way that no other issue, foreign or domestic, does."

To illustrate the threat, he asks readers to imagine a scenario in which China, which even at the time of his writing in early 2012 held $5 trillion in U.S. Treasury securities, decides to stop its lending, an action that is followed by a precipitous drop in the value of the dollar, a "massive sell-offof U.S. stocks," sharp rises in interest rates, and a loss of the dollar's status as the world's reserve currency, all with a tidal wave of effects on the financial system, America's standing in the world, and the real economy. Other scenarios also point to catastrophe. The interest on the national debt, by itself, he says, is taking an escalating portion of the national budget, and as it grows will come to crowd out expenditures on most else.

Though Daniels is a Republican, he says the debt problem is best seen as one of mathematics, not of politics or ideology. "Whether one prefers big government or limited government... has nothing to do with the brute fact that no... modern nation-state can survive, let alone thrive, while carrying the incredible debt burdens we are about to confront." He argues, accordingly, that it should be as much a concern for the Leftas for the Right.

Nevertheless, Daniels' analysis of the origins of the problem and of what is going to be necessary to overcome it leads him directly into many facets of his own free-market, limited government philosophy. It is hardly to be imagined that the Leftcan or will agree that it must follow him in that direction. The Leftunderstands the problem through a different prism. The problem itself is not directly ideological, but much ideology and politics come to bear upon it.

It will be helpful to see the role the threat plays in Daniels' analysis. The debt problem is, in effect (even though he himself doesn't use this metaphor), a "black hole" that is fed by a vast array of social and political forces. Because that is so, Daniels' discussion goes far beyond the debt per se. As he examines the many pathologies that have led the United States into this conundrum and spells out what he believes necessary for the tsunami of growth that is essential if the threat is to be transcended, he is led into an explication of freemarket, limited government policies. Accordingly, the book becomes more a brief and easily readable treatise on contemporary public policy than a monograph on the debt issue alone. It is also something of a memoir of his actions as governor.

We will want to consider the elements of his analysis, but first it is well to mention an attribute of Daniels' thinking that deserves notice. A quality that stands out about the book is Daniels' civility. …

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