Our Mr. Eagar wants to make a bet on whether President Bush or President-Elect Obama will end up nationalizing more of the economy. I think that’s an interesting wager and am happy to take him up on it.
However, we must be careful about what we mean by nationalizing. Mr. Eagar starts with a figure of $4T for Bush but doesn’t specify where this number comes from. Should we include the financial industry bailout? In general no, but we should probably count any stock purchases made. But that’s only $700B and I can’t think of what else would account for the rest. Support for Fannie Mae and Freddie Mack? Possibly, but I would lay that at the feet of the Democratic Party, not Bush, as the massive expansion that led to such debt was a creation of the Congressional leaders of that party.
Another issue is whether we count taxes, which one can argue are a de facto nationalization. If taxes go up as a percentage of GDP, does that count as nationalization?
Finally, are we counting only one side of the ledger, or do we consider counter vailing efforts? For instance, health insurance accounts. Or free trade agreements. I certainly won’t defend Bush as a leader for free markets, but his record is overall mixed. He at least made a pass at privatizing Social Security, which would have been the biggest de-nationalization in American history.