Several trillion in dollar resources were thrown at fixing the economic crisis of 2008, and yet here we are today with high unemployment, a weakened capital sector, and declining hopes for the younger generation. It seems very clear that the old ways of throwing money at a problem did not work.
One of the strangest features of this public policy is that it keeps repeating the same failures again and again. After 2008, the widespread view was that we could spend our way out of our trouble. But where does the government get its money to pursue these types of policies? It must extract them from the rest of the private sector, which is to say that the money is taken from you, me, and everyone else.
It is not a direct taking in some instances. The extraction of wealth can take the form of increased borrowing or actual money creation by the central bank. But this is not a magic solution. Both forms eventually end up exacting a serious price. More profoundly, these steps do not somehow cause economic recovery to happen. We are learning this lesson yet again—at least I hope we are.
The bigger question concerns why we keep embracing this idea that the state is capable of bringing about a solution to every problem through spending, taxing, inflating, regulating, and borrowing. Why is it that the political class cannot seem to learn from the failures of the past? Why does the public continue to go along?
I suspect that the real problem is that the faith of our age has undergone a shift from the past. It was once common for most people to acknowledge a deep faith in God and attribute to God omniscience and omnipotence and an all-powerful belief in the power of prayer. Today, this is less and less true. Those same traits are ascribed to public authority.
A new love of freedom will emerge alongside a new faith in transcendent presence. Part of the mission of the Acton Institute is to inspire just such a revival, and we thank you for supporting this.
Rev. Robert Sirico, President