Commentary Magazine


Topic: Bob Bennett

Misconstruing the Message of Robert Bennett’s Defeat

The defeat of Robert Bennett in the Utah Republican convention has unleashed a torrent of overheated and silly analysis. For example, Politico intones:

Republican Sen. Robert Bennett was one of the most powerful and likable members of the Senate, he diligently protected Utah’s interests from his post in GOP leadership and he funneled millions of dollars back to his state as an appropriator. But Utah Republicans didn’t care. In fact, that’s exactly why they tossed him out Saturday in a humbling second ballot vote at the state party convention. … For Republicans who are measuring the drapes in anticipation of reclaiming power, Bennett’s loss should be sobering. If the anti-Washington and tea party winds keep blowing this strong, some of them could be measuring their own political graves.

Does it really mean that Republicans are imperiled and the voters are racing to elect Democrats to replace GOP stalwarts? No, of course not. What happened in Utah was the desire for a more authentic and, frankly, younger conservative voice. There is virtually no chance Utah’s seat will go to the Democrats. As Bill Kristol explained on Fox News Sunday:

Bennett was defeated by two very attractive, young conservatives who are now going into a primary runoff. And you know, one can say that he was defeated by the Tea Party, but he was actually defeated — if you look at these actual candidates, they’re impressive young conservatives who I think want to rethink fiscal policy and economic policy across the board in a much bolder way than an establishment Republican like Bob Bennett was willing to do.

But that’s not a story line that is attractive to the mainstream media — which desperately want to portray the anti-liberal sentiment sweeping the country as generically anti-Beltway. The delegates in Utah tossed Bennett because he was an insufficiently stalwart standard bearer of the small-government, anti-bailout phenomenon that is exciting the GOP base and sweeping up support from independents. As Politico acknowledges:

For others, their vote was primarily about adherence to orthodoxy on fiscal issues, a unifying cause of the tea party movement. It didn’t matter to them that Bennett favors gun rights, tougher immigration laws and even voted against President George W. Bush’s No Child Left Behind Act. The first explanation offered by most delegates here referenced his vote for the TARP bailout program. A smattering of delegates even began chanting, “TARP, TARP, TARP” during one of Bennett’s floor speeches.

It stands to reason, then, that Democrats will be in more trouble, not less, than a Republican senator. So unless Democrats are running to the right of Republicans, it’s hard to see how Bennett’s defeat is good news for them.

The defeat of Robert Bennett in the Utah Republican convention has unleashed a torrent of overheated and silly analysis. For example, Politico intones:

Republican Sen. Robert Bennett was one of the most powerful and likable members of the Senate, he diligently protected Utah’s interests from his post in GOP leadership and he funneled millions of dollars back to his state as an appropriator. But Utah Republicans didn’t care. In fact, that’s exactly why they tossed him out Saturday in a humbling second ballot vote at the state party convention. … For Republicans who are measuring the drapes in anticipation of reclaiming power, Bennett’s loss should be sobering. If the anti-Washington and tea party winds keep blowing this strong, some of them could be measuring their own political graves.

Does it really mean that Republicans are imperiled and the voters are racing to elect Democrats to replace GOP stalwarts? No, of course not. What happened in Utah was the desire for a more authentic and, frankly, younger conservative voice. There is virtually no chance Utah’s seat will go to the Democrats. As Bill Kristol explained on Fox News Sunday:

Bennett was defeated by two very attractive, young conservatives who are now going into a primary runoff. And you know, one can say that he was defeated by the Tea Party, but he was actually defeated — if you look at these actual candidates, they’re impressive young conservatives who I think want to rethink fiscal policy and economic policy across the board in a much bolder way than an establishment Republican like Bob Bennett was willing to do.

But that’s not a story line that is attractive to the mainstream media — which desperately want to portray the anti-liberal sentiment sweeping the country as generically anti-Beltway. The delegates in Utah tossed Bennett because he was an insufficiently stalwart standard bearer of the small-government, anti-bailout phenomenon that is exciting the GOP base and sweeping up support from independents. As Politico acknowledges:

For others, their vote was primarily about adherence to orthodoxy on fiscal issues, a unifying cause of the tea party movement. It didn’t matter to them that Bennett favors gun rights, tougher immigration laws and even voted against President George W. Bush’s No Child Left Behind Act. The first explanation offered by most delegates here referenced his vote for the TARP bailout program. A smattering of delegates even began chanting, “TARP, TARP, TARP” during one of Bennett’s floor speeches.

It stands to reason, then, that Democrats will be in more trouble, not less, than a Republican senator. So unless Democrats are running to the right of Republicans, it’s hard to see how Bennett’s defeat is good news for them.

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The Ticking Debt Bomb

Journalists often fixate on the absolute size of a government’s debt, coming up with imaginative ways to make it visible. My favorite (perhaps because I calculated it myself) is the American national debt in silver dollars. Lay the debt ($12,932,913,325,200.66 as of last Thursday) out in a line of silver dollars. Ignore the fact that there is not enough silver on planet Earth, mined and unmined, to mint that many silver dollars and that the silver content of an old silver dollar (0.7736 troy ounces) is now worth $14.12 as bullion. That line would stretch from the sun to the earth, back to the sun, back to the earth, and with enough left over to wrap around the equator 1,132 times.

But while this sort of thing is amusing, it doesn’t tell us much. Instead, there are two relative measures that are important for assessing government debt. One is the size of the debt relative to the GDP. Having been at 57 percent in 2001, the national debt at the end of the first quarter of 2010 was 87.3 percent. While we have to take 9/11 and the recession that began in 2007 into account, that is a breathtaking climb in a decade that has seen no great war or great depression. The Congressional Budget Office (CBO) estimates that the debt under current fiscal plans will double by the year 2020, putting us back, at the least, to where we were in 1946, right after World War II, when the debt peaked at 129.98 percent of GDP.

The other measure to keep a firm eye on is the percentage of total government revenues that goes to pay interest on the national debt. As you can see here, that measure is, as well, on a very worrisome trend, with the CBO predicting that the interest, now about 8 percent of government revenues, will amount to 18 percent of revenues by 2018;  18 to 20 percent is the point where Moody’s and, presumably, other rating agencies would strip the U.S. of its AAA rating. That, in turn, would cause the price of borrowing money to go up sharply.

However, both the CBO estimates are predicated on the economy recovering fairly briskly from the recession and on interest rates remaining low. Those two predicates are, to a certain extent, contradictory. With the current sovereign-debt crisis, it’s entirely possible that all governments will have to start paying more to borrow new money and roll over maturing bonds. Moody’s projects that the cost of federal-debt service could reach 22.8 percent of government revenues as soon as 2013.

That would not only threaten our credit rating and drive up still further the cost of borrowing, but also increasingly constrain the ability of the government to pursue American interests. In the 1920s Britain was paying over 40 percent of revenues to service its debt from World War I, gravely limiting its ability to function as a Great Power. In the 1780s France was spending over 80 percent of revenues to pay interest on its debt, no small reason why the 1780s didn’t end well for the French monarchy.

The people seem increasingly aware of this looming threat. Just ask Senator Bob Bennett of Utah, denied nomination to a fourth term yesterday largely because he voted for the TARP bill in 2008. But do the political class and the Washington media? They had better, and soon.

Journalists often fixate on the absolute size of a government’s debt, coming up with imaginative ways to make it visible. My favorite (perhaps because I calculated it myself) is the American national debt in silver dollars. Lay the debt ($12,932,913,325,200.66 as of last Thursday) out in a line of silver dollars. Ignore the fact that there is not enough silver on planet Earth, mined and unmined, to mint that many silver dollars and that the silver content of an old silver dollar (0.7736 troy ounces) is now worth $14.12 as bullion. That line would stretch from the sun to the earth, back to the sun, back to the earth, and with enough left over to wrap around the equator 1,132 times.

But while this sort of thing is amusing, it doesn’t tell us much. Instead, there are two relative measures that are important for assessing government debt. One is the size of the debt relative to the GDP. Having been at 57 percent in 2001, the national debt at the end of the first quarter of 2010 was 87.3 percent. While we have to take 9/11 and the recession that began in 2007 into account, that is a breathtaking climb in a decade that has seen no great war or great depression. The Congressional Budget Office (CBO) estimates that the debt under current fiscal plans will double by the year 2020, putting us back, at the least, to where we were in 1946, right after World War II, when the debt peaked at 129.98 percent of GDP.

The other measure to keep a firm eye on is the percentage of total government revenues that goes to pay interest on the national debt. As you can see here, that measure is, as well, on a very worrisome trend, with the CBO predicting that the interest, now about 8 percent of government revenues, will amount to 18 percent of revenues by 2018;  18 to 20 percent is the point where Moody’s and, presumably, other rating agencies would strip the U.S. of its AAA rating. That, in turn, would cause the price of borrowing money to go up sharply.

However, both the CBO estimates are predicated on the economy recovering fairly briskly from the recession and on interest rates remaining low. Those two predicates are, to a certain extent, contradictory. With the current sovereign-debt crisis, it’s entirely possible that all governments will have to start paying more to borrow new money and roll over maturing bonds. Moody’s projects that the cost of federal-debt service could reach 22.8 percent of government revenues as soon as 2013.

That would not only threaten our credit rating and drive up still further the cost of borrowing, but also increasingly constrain the ability of the government to pursue American interests. In the 1920s Britain was paying over 40 percent of revenues to service its debt from World War I, gravely limiting its ability to function as a Great Power. In the 1780s France was spending over 80 percent of revenues to pay interest on its debt, no small reason why the 1780s didn’t end well for the French monarchy.

The people seem increasingly aware of this looming threat. Just ask Senator Bob Bennett of Utah, denied nomination to a fourth term yesterday largely because he voted for the TARP bill in 2008. But do the political class and the Washington media? They had better, and soon.

Read Less




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