Throughout the presidential debates, network anchors heaped derision on John McCain for repeatedly decrying congressional earmarks when they asked him about problems with the economy. The conventional wisdom of the mainstream media and the liberal commentariat holds that McCain shouldn’t criticize Barack Obama’s $300 million earmark for a planetarium when the nation faces a $700 billion bank bailout. As usual, the conventional wisdom was anything but wise.
The most obvious mistake is ignoring the fact that, just as forests are comprised of lots of individual trees, debts are caused by lots of individual decisions to spend money. The old wisdom of another Illinois senator – Republican Everett McKinley Dirksen – rightly advised that “a million here and a million there and pretty soon you’re talking about real money.” Eliminate all of the purely local-interest earmarks like the planetarium, and you would save $18 billion in one year. But that’s only the start. As Sen. Tom Coburn, R-Okla., so often notes, earmarks are the “gateway drug to federal spending addiction.” Just as senators and representatives protect each other’s earmarks in an ingrained culture of mutual back-scratching, they also protect each other’s big ticket spending proposals as well. So the message is: “I’ll vote for your planetarium in return for you voting for my otherwise unneeded line of new submarines or another duplicative, wasteful welfare program” or whatever.
Worse yet, the log-rolling culture is woven into the law. That $18 billion in earmarks becomes part of the spending “baseline” used by congressional appropriators as the starting point for next year’s spending. That in turn gets an “inflation adjuster,” which is in turn goes into the baseline for the year after that, and the year after that … and on and on, ad infinitum. And we haven’t even begun to talk about how interest payments on the steadily accumulating national debt caused by deficit spending and out-of-control entitlements further acts to automatically increase the budget as well.
It should be beyond dispute that this legislative gluttony served only to add to the irresponsible mortgage lending by the nation’s lenders, led by Fannie Mae and Freddie Mac. Because federal debt is assumed to be guaranteed, banks could treat it in effect not as added liability but as collateral for ever-riskier loans of the sort that caused the current crisis. All of which means that McCain was right: Stopping the earmarks is the essential first step to stopping the contagion before it can take hold.
