2008: Year of Hope, Year of Fear. Essay 3

Waking up to the new reality of curbing spending
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Waking up to the new reality of curbing spending

David Brewster sees 2008 as a year of growing up and getting serious. I actually hope that transformation takes hold in 2009 as we all gradually wake up to the reality of what has hit our economy.

George W. Bush'ꀙs shadow loomed large over 2008, ensuring the election of Barack Obama, and the reelection of Chris Gregoire. The anti-Bush elections of 2006 and 2008 brought wholesale change to Washington D.C., but locked in the status quo here at home. For those hoping for the change that would come with a Dino Rossi administration, 2008 will always be the year of lost opportunity.

I suspect that history, however, will remember 2008 as the end of the era of easy money. Suddenly credit is tight, gas is cheap, unemployment is rising, and economists are dusting off a word rarely heard in my lifetime: deflation. Newspapers are getting thinner, and every industry is asking for help from the federal government, the only entity that seems to have any money.

No doubt many of us are hoping this is all just temporary, and that our home values will rebound next year, along with our 401-ks. That would be wonderful, but I doubt it will happen. For decades we have been warned that both families and governments were borrowing and spending too much, and saving too little. Now we have to do something about it. Politicians need to actually confront issues like out-of-control spending on entitlements, and earmarked pork. American business and labor need to work together to control costs in order to be internationally competitive. To grow our economy, Congress needs to move on issues like trade agreements and a balanced, realistic energy policy.

None of this will be easy or popular. American families are waking up to the new realities, curbing their spending, and doing what needs to be done. Can our leaders do the same? I think that will be the story of 2009.


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About the Authors & Contributors

Chris Vance

Chris Vance

Chris Vance, a former Republican party chairman, is a senior fellow at the Niskanen Center.