Skip to comments.Gov. Mark Sanford on Stimulus, Economy [Tenth Amendment, entitlements, defense, taxes, the Founders]
Posted on 03/16/2009 7:46:59 AM PDT by rabscuttle385
Governor Mark Sanford (R) of South Carolina has been a vocal critic of President Barack Obamas stimulus plan and in the process has become one of the most prominent fiscal conservatives in the country. Recently, he made national news when he announced his plan to accept the stimulus funds but sought a waiver from the President to use 25 percent of it to pay down state debt rather than spend it on suggested programs (the other 75 percent is determined by formulas). If Obama doesnt grant the waiver, Sanford has said he will reject it.
Before Sanford was governor, Sanford spent six years in Congress where he earned straight A ratings from the National Taxpayers Association, the National Rifle Association, and the Gun Owners of America. He was also often one of the few dissenting votes alongside Congressman Ron Paul. That is not to say that Governor Sanford voted exactly like Ron Paul. The New American's Freedom Index (then referred to as the Conservative Index) score for Sanfords time in Congress was a cumulative 78 percent whereas Ron Paul consistently scores 100 percent. In more recent times, Sanford has been praised by the American Conservative Union as the "Most Conservative Governor in America."
Gov. Sanford took time out of his schedule to sit down and talk with The New American about the economy, President Obama, and how America can return to its constitutional roots.
The New American: You've really stood out from other critics of Obama's stimulus plan in your analysis, which explains not only how it won't help the economy but that it will definitely hurt it. Would you like to summarize your viewpoint on that?
Governor Mark Sanford: I would summarize it this way. You break your leg tomorrow, and they can give you a bunch of anesthetics which will make you feel okay. You wont be able to feel the pain. Itll feel like its fine but its still broken. With those anesthetics, you might even be able to walk on it and not feel the pain, but youre liable to do more harm to yourself. And no matter how you cut it, how many pills or shots you take, its going to take six weeks to heal your broken leg. So, we have a problem in that debt has grown at three times the rate of the economy in the last 15 years, and were going to go through a deleveraging. And its going to be painful, and theres no getting around that. You can take a bunch of medicines that might make it feel like were not deleveraging and make it feel as if the problem is going away, but thats not reality.
So, my concern to that is several fold. One, the history of these kinds of things is that they make the problem worse, not better. They tend to deepen and elongate the severity of the downturn because what they do is they freeze up the real driver of our economy, which is the private market, the free enterprise system. If you stick any two business guys in a room and you say, Look, I give you two sticks and the rules of the game are whoever rubs the two sticks the longest and the quickest and makes a fire first wins. Theyll sit there and rub the sticks because they know what the rules of the game are. But nobody has any clue as to what the rules are going forward as theres been one stimulus and one bailout measure after another. And that kind of uncertainty freezes up private capital which is the real driver of our economy. That has not been the intended consequence of different policymakers from Washington but that has been the consequence.
And so I say its going to make our problems worse with the way it freezes up private capital. Its going to make our problems worse because the problem of too much debt cannot be solved with more debt. Its going to make our problems worse because were at a tipping point with regards to the value of the currency, and if you print enough of anything, you cheapen it. Were out there running the printing press essentially on a currency and were cheapening it. You can go back to the 1920s with what happened to Argentina. You can go back to the time between World War I and World War II when it happened in the Weimar Republic in Germany. When it happened there, you needed a wheelbarrow load of currency to get so much as a loaf of bread. Were nearing a very scary tipping point, the point at which the international markets stop buying our debt. You know that 49 percent of all the treasury bills were bought by foreign governments, sovereign governments, et cetera folks that were not American, aint no particular allegiance to America. So we get to that point where they stop buying, and all of a sudden, the currency free falls, and we have inflation and you just undid all the stimulative efforts that have taken place over this last year. So I think its bad from that standpoint.
I think its bad from the standpoint of us getting away from what made this country great: people taking chances, taking risks, working hard. If they create a great product or great service, theyre rewarded for it and if not, theyre penalized. Were moving closer to a savior-based economy where if youve got the right connections to the guy at the top, then youre going to be okay, but if you dont, youre out of luck. Thousands of businesses fail each year in America and everybody figures thats part of the process. Now weve got folks saying, Well, a third round with AIG and a second round with GM. At some point, its like with a boy crying wolf. I mean, when do we stop believing the notion that economic prosperity can be directed upon high from Washington D.C.? That has never been the hallmark of what made this country great.
TNA: A lot of people keep saying that its the role of the president to fix the economy, although its not the presidents constitutional role, but how would you suggest the president go about fixing the economy? You mentioned deleveraging. Should the president just allow the deleveraging to happen?
Gov. Sanford: Its going to happen. Its not a question of him allowing it to happen. Its going to happen. First, you need to be honest with the American public with where we are and how we got to the problem were in. The bottom line is that through Fed policy and easy money, through Freddie and Fannie, or through requirements on banks to lend to folks who had no capacity to pay it back, there has been a lot of government action that led us to where we are. And now were going to pay the piper for those actions. Theres no free lunch in life. Its something my wife and I have tried to teach our four boys. Its something we all learned through the school of hard knocks in life. There are consequences to every action.
Everyone has become the equivalent of a pastry chef in the world of politics: If you dont like this theory, how about this one? I dont think that is how one really gets to the pursuit of happiness that the Founders dreamed of. I think that one of the other things that a person has to do is think more holistically when thinking of economic stimulus. Economic stimulus does not equal writing a bunch of checks on an account that doesnt have money in it from Washington D.C. If it were that simple, then Zimbabwe would be an outrageously prosperous place based on printing money that they dont have. Youve got to look long term, not short term. Youve got to look at what are the ingredients that create economic growth. How competitive is our economic climate versus the other economic climates on something like card check [the ease of forming a union in the workplace]? Where are we on trade policy versus a lot of other places around the globe? Where are we on tax policy? You look at the way markets have been reacting to the stimulus proposals to take hundreds of billions of dollars out of the private sector and put them into the public sector, and they dont seem to be responding very well.
TNA: Speaking of the stimulus, there was talk of rejecting the stimulus money. Are you accepting any of the stimulus money intended for South Carolina, and if you are, which part are you accepting?
Gov. Sanford: Were going to go through stimulus legislation with a fine-tooth comb in looking at what makes sense and what doesnt make sense, and were going to come out with where we are on that. It will be examined philosophically and practically, and were not through with our deliberation on that. I can unequivocally say we will not be accepting all the money.
TNA: Obama's deficit spending is worrisome, but the unfunded liabilities of U.S. entitlements, like Social Security, Medicare, and Medicaid are a ticking time bomb getting ever closer to detonation as the baby boomers retire. How do you propose America deal with the upcoming entitlement problem?
Gov. Sanford: David Walker is the former comptroller general of the United States and he joined up with Pete Peters on something of a fiscal wake-up tour around the country talking about the course were on and how unsustainable it is. I would say weve go to act soon because time is not in our favor on this one. Its pretty simple. Theres no easy way out. Youve got to cut benefits or raise taxes. Or you can do what weve been doing: borrowing money, but borrowing money is just a deferred tax. I fall under the school that says if you look at the larger notion of the competitiveness of this country versus other economies around the globe, we will never become more competitive by raising taxes and taking more from the private sector and putting it into the public sector.
Its projected right now that were supposed to run a deficit of around 12 percent of GDP this year. That is insane. Those are the kind of numbers you would see in a banana republic, and thats where were headed this year. If you look at the numbers long-term, governments percentage of the overall economy has been fairly consistent since World War II at about 20 percent. Tax rates could go up or down, but the overall take by government was around 20 percent of the GDP. It is projected to go up in the Obama administration to 28 percent of GDP, which is close to a WWII high and is a very scary number. I think it would be a real mistake to raise taxes because if you raise it on the young, you will have a cross-generational wealth-transfer payment which doesnt make a whole lot of sense, and it also causes our ability to compete with the rest of the world to deteriorate. I would just say theres going to be a lot of temptation to raise taxes, which I think is the easier political remedy but that would be a huge mistake.
TNA: You have gone on record as saying that you do not support preemptive warfare. One of the biggest expenses our country faces is so-called "defense" spending, used to maintain U.S. military forces around the globe. Obama was perceived as the peace candidate on the election trail, but he is already escalating the Afghanistan war by 17,000 troops. He also plans to station up to 50,000 troops in Iraq through 2011, and maintain all our numerous other commitments around the world. With so many economic problems facing our nation, do you think we can afford to continue the same big-government foreign policy?
Gov. Sanford: I think the answer is that our economic conditions are going to drive a change there. Paul Kennedy wrote an interesting book called The Rise and Fall of the Great Powers, and he talked about how economic supremacy was a precursor to military supremacy and that any government who tried to sustain one without the other ultimately fell. The Soviet Union ran very significant military expenditures that they couldnt sustain based on where their economy was what Kennedy called imperial overstretch. Its the tendency of every national power to at some point get there. Britain got there many years ago. We got there a long time ago.
Were going to have to look very deliberately to see what things are in our strategic interest, and they are there, as well as what things have tactical impact and what things have long outlived their usefulness. For instance, we have more than 40,000 soldiers on the DMZ (Demilitarized Zone) in Korea versus a million in North Korea. The real deterrent to an attack by North Korea is not whether 40,000 Americans are or not there. The real deterrent is the fact that if you cross the DMZ, America is getting involved whether its with cruise missiles or shells fired from a frigate. Theres going to be a real world impact. So I think we need to look painstakingly at what the real deterrent is in many of these cases and whether or not some of these things weve done for 40 or 50 years have a real practical effect.
TNA: On a similar foreign policy question, both President Barack Obama and Vice President Joe Biden have been vocal supporters of Georgia joining NATO which would mean that should Georgia and Russia again become embroiled in a military conflict, we would go to war against Russia. Do you think this is a wise policy stance?
Gov. Sanford: Ive really not looked at that one. Im a southern governor watching the budget in South Carolina and have not really looked at that one.
TNA: When you were in Congress, you had a record as a firm defender of the U.S. Constitution. Do you feel that most of the problems America now faces are because it has moved away from its constitutional restraints on government?
Gov. Sanford: Yes, I think the Founding Fathers were remarkably wise men who were painstakingly detailed in looking at the nature of man, looking at the needs for checks and balances within our political system and instituting them. A lot of the things weve gotten into I remember myself and Tom Campbell being lonely votes against the war in Bosnia because it was really not the constitutional power of the president to send people off to war and because the body bags dont go back to the Pentagon but to the congressional districts across this country. I do believe America has slipped to where we are as a result of this. Once you move away from the playbook that says government is limited in these ways, there is no end to all the good that government can or might do. I do think that adhering to the constitutional moorings is not only important from a standpoint of a limited focus and functioning federal government, its also important to the sustainability of our Republic.
TNA: There has been a recent movement, referred to as the Tenth Amendment Movement, or the State Sovereignty Movement, which is a movement to restore the balance of power between the states and the federal government within the union in accordance with the Tenth Amendment of the Constitution (all powers not specifically enumerated to the federal government are reserved to the states). I wanted to get your thoughts on this.
Gov. Sanford: I love the concept. I think its going to take more than just a couple of state legislative bodies passing resolutions to draw a lot of attention. It will take a lot of people marching not just on their state houses but also on Washington D.C., insisting that the Constitution by obeyed because until that happens, those provisions will be quietly ignored and the federal government will continue to grow.
This might be of interest to you.
Sanford *and* DeMint are real conservatives, and they are *not* playing the RINO elevator music.
Sanford 2012/DeMint 2010
10th amendment ping
I like Sanford more and more every day. If he’s the man I think he is, he’ll be making history in the near future.
Thanks for the ping rab, great article. We have to let the destructive process happen so new creative alternatives can arise. We need conservative, well-founded banks based on sound principles. As long as we prop up these old banks built on rotten assets, we’ll never get to a real growth economy again. Let the zombies die.
I’d love to live in S.C! Them Boy’s walk the walk..
RE :”Economic stimulus does not equal writing a bunch of checks on an account that doesnt have money in it from Washington D.C. If it were that simple, then Zimbabwe would be an outrageously prosperous place based on printing money that they dont have. Youve got to look long term, not short term. Youve got to look at what are the ingredients that create economic growth”
Very nice. Love the quote above.
The stimulus funding for states is a got-ya game. Republicans are attacked for taking it and for NOT taking it too. Why didnt republicans play a similar cynical game? We could have let the states decide to opt out of tax cuts
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Amazing Grace sung in the Roman Coliseum
Fear not!! Ge 26:24
Standing on principle is always risky business but it beats the heck out of trying to out-pander the pros in the Dim party. Would that we had more governors cut from the same piece of cloth.
Have you seen THIS ONE? It would seem the Dims are trying to move the founding up to the Reconstruction period.
Wow! Even gave this old East Texan goose bumps.
How hard is that to understand? Forget Economics 101 that has to be Economics Pre-school.
What a refreshing read this fine gentleman is. Governor Sanford doesn’t seem to need to “correct” himself very much, I’m noticing... Funny how the REAL DEAL says the right things naturally.