Editorial — Will legacy be a mountain of debt?
What sort of legacy will we leave for our grandchildren and great-grandchildren?
Given the recent spate of bad economic news that prompted the federal government to deliver $700 billion to purchase bad mortgages and the resulting calls for more money to save the dilapidated U.S. auto industry, it seems that the legacy will include a massive amount of debt.
The United States has entered its worst economic crisis since the Great Depression and its ability to respond through intervention is limited because the federal government finds itself in a massive financial hole. When President Franklin Roosevelt took office after defeating Herbert Hoover, the federal government’s budget was tiny. There wasn’t any Social Security, food stamp program or farm bill. The federal government’s role and impact on the average American was pretty much limited to defense.
President Hoover and many others were convinced that President Roosevelt’s proposal to make the federal government more involved in the economy smacked of socialism, which they felt was poison to democracy. Roosevelt pushed through programs to help get the nation back on its feet. Some programs — like the CCC and WPA — were tremendous successes. Others were ruled unconstitutional by the Supreme Court.
The nation didn’t regain its financial footing well into the mid-1930s, when the country began a buildup that eventually led to our military intervention in World War II.
Today, the nation faces extremely difficult choices. If the government doesn’t act, it’s likely two of the three U.S. automakers will file for bankruptcy, costing hundreds of thousands of jobs. Unless the federal government delivers funds to cash-strapped states, many states will be forced to curtail spending, which will lead to higher unemployment.
With winter’s arrival, hundreds of thousands of homeowners will struggle to pay their heating bills.
Should the government help? Can it?
Those questions aren’t easy to answer.
Agriculture, too, finds itself in a tough spot.
Grain prices — while still good — have fallen below the ever-increasing cost of production. Export demand has slowed as the world enters a recession. The risk of deflation — too few dollars chasing too many goods — is an ever-increasing risk. The good news is that agriculture — like it has many times before — can lead the country back to solid economic footing. As the greatest creator of new and renewable wealth the world has ever seen, agriculture and the family farmers who make it go are more vital now than ever.
It is our responsibility to create a legacy for future generations. We cannot afford to wash our hands of responsibility and leave nothing but a mountain of debt behind.