Thursday, June 4, 2009

So Long, Ben

Fed chairman Ben Bernanke told congress yesterday that large U.S. budget deficits threaten financial stability and the government can't continue indefinitely to borrow at the current rate to finance the shortfall. He added that:

"Unless we demonstrate a strong commitment to fiscal sustainability in the longer term, we will have neither financial stability nor healthy economic growth. Maintaining the confidence of the financial markets requires that we, as a nation, begin planning now for the restoration of fiscal balance."

The Bloomberg report goes on to say that:

Bernanke's comments signal that the central bank sees risks of a relapse into financial turmoil even as credit markets show signs of stability. He said the Fed won't finance government spending over the long term, while warning that the financial industry remains under stress and the credit crunch continues to limit spending.

We have to wonder why congress and the White House are insisting on driving this financial train over the precipice. Surely, they all know what Bernanke and anyone else who has a bank account knows - you can't keep spending money you don't have, running up debts you have no way of paying off.

The article went on to offer some insight into how we're going to pay off Obama's shopping spree:

The budget deficit this year is projected to reach $1.85 trillion, equivalent to 13 percent of the nation's economy, according to the nonpartisan Congressional Budget Office.

"Either cuts in spending or increases in taxes will be necessary to stabilize the fiscal situation," Bernanke said in response to a question. "The Federal Reserve will not monetize the debt."

If Bernanke's telling the truth then the Fed will refuse to just print money to pay off Obama's debts. The bad news, however, is that the only other way to pay them off will be to raise taxes. A lot. In other words, if you think your paycheck is too fat now, just wait. It's about to go on a very severe diet.

Look, too, for the administration to answer Bernanke's impertinence by replacing him at the Fed with someone more compliant and less responsible.


Liberty U. Update

A couple of weeks ago I commented on my vacillation over Liberty University's decision to derecognize the student Democratic club. I defended the University's right as a private institution with a Christian mission to sponsor only those organizations which are compatible with that mission, but I also wondered if their decision to exercise that right was a little bit at odds with the name of the university. Since that post, which also ran in the local newspaper, some details have emerged that place Liberty's decision in a somewhat more favorable light than did the article upon which I based my original post.

For example, a pair of op-eds appear on the Liberty website that offer some important clarification. The first says, in part, this:

A number of media sources recently reported that Liberty University banned Democrats from meeting on campus. One headline erroneously read: "Democrats at Liberty University forced to meet off campus." Apparently many journalists do not let the facts get in the way of a juicy, agenda-driven story.

The story was spun out of control from the beginning, when Terry McAuliffe, a Democratic gubernatorial candidate for Virginia, called a telephone press conference to talk about the College Democrat club formed by students of Liberty University. The presses began to buzz. Much of what went to print was wrong. Most journalists were interested in scooping their competitors rather than seeking the truth. Even when some reporters learned the facts, they could not bring themselves to correct their stories because the fanciful reports were just too tempting.

The University has not banned Democrats from campus. Nor has the Democrat club been banned from meeting. And, never has the University or its officials said that a person cannot be a Christian and a Democrat. Sorry for those who want to run with these titillating sound bites, but these are the facts.

The students who formed the Democrat club last October are good students. They are pro-life and believe in traditional marriage. They can continue to meet on campus. The only thing that has changed came about as part of a University-wide review of all student organizations for official recognition status. Official recognition carries with it the benefit of using the University name and funds. While this group will not be an officially recognized club, it may still meet on campus.

While the students in the college Democrat club are pro-life and support traditional marriage, the constitution of the club pledged support to advance the Democratic platform and candidates. The 2008 Democratic platform has taken an extreme turn to the left on social issues. For the first time it supports federal funding of abortion and repeal of the federal Defense of Marriage Act, a law passed overwhelmingly by a bi-partisan Congress and signed by President Bill Clinton. Liberty University will not lend its name or financial support to undermine marriage or to promote abortion.

In my original post I made it clear that I thought this was precisely the sort of position that the school was duty-bound to adopt.

There's more significant information in the second article.

Having read these two pieces and having heard a report on NPR the other day on this matter, I feel a little chagrined at my original post. I also have had reinforced a lesson I thought I already knew pretty well - just because a story's on the evening news doesn't mean it's accurate.

Thanks to John for calling my attention to the above articles.