"Famous last words. In a sense, the Reagan handlers were right: there were no more tears, no more complaints, because the principles themselves were quickly forgotten, swept into the dustbin of history. Deficits and the public debt have piled up mountainously since then, and few people care, least of all conservative Republicans. Every few years, the legal limit is raised automatically. By the end of the Reagan reign the federal debt was $2.6 trillion; now it is $3.5 trillion and rising rapidly [ed. Note: $7 trillion as of today, Jan. 23, 2004]. And this is the rosy side of the picture, because if you add in 'off-budget' loan guarantees and contingencies, the grand total federal debt is $20 trillion.

"Before the Reagan era, conservatives were clear about how they felt about deficits and the public debt: a balanced budget was good, and deficits and the public debt were bad, piled up by free-spending Keynesians and socialists, who absurdly proclaimed that there was nothing wrong or onerous about the public debt. In the famous words of the left-Keynesian apostle of 'functional finance,' Professor Abba Lerner, there is nothing wrong with the public debt because 'we owe it to ourselves.' In those days, at least, conservatives were astute enough to realize that it made an enormous amount of difference whether - slicing through the obfuscatory collective nouns - one is a member of the 'we' (the burdened taxpayer) or of the 'ourselves' (those living off the proceeds of taxation).

"Since Reagan, however, intellectual-political life has gone topsy-turvy. Conservatives and allegedly 'free-market' economists have turned handsprings trying to find new reasons why 'deficits don't matter.'"

Today, if you were to pose the question to the small-town republican, you might still find a faint residue of the Old Religion. But the poor man has been betrayed...by his party...by his representatives...by politics itself...and by his own fatal urges.

Like investors, republicans have gone a little light in the head. They no longer aim for balanced budget and modest programs; they aim for the stars.

"You can't have a war, cut taxes, have the economy in a garbage pail and spend billions going into space," said an American quoted in the Economist. But this old-school Republican is sadly out of step with the times. The new-school conservatives are on the march...headed to buffoonery.

It is fairly late in the day of what Bank Credit Analyst refers to as the "supercycle" of credit. The idea is fairly simple. All of nature works in cycles. You are born; you die. There are the seasons, the earth's annual movement around the sun, and its daily spin. Things go up and then they go down. The 'hog cycle' - in which hog prices rise and fall with production - takes only about 18 months. The presidential cycle takes 4 years. A supercycle is merely a cycle that takes a long time and includes many other mini-cycles.

The key dates for America's supercycle of credit - also known to Daily Reckoning readers as the Dollar Standard Era - are 1913, 1933, and 1971. In 1913, the Federal Reserve was set up. In 1933, Roosevelt banned gold and brought European-style social welfare programs to America. And in 1971, Richard Nixon broke the last link with gold...creating an international monetary system based entirely on paper - or fiat - money.

Not entirely by coincidence, 1971 was also the year in which the space shuttle program was launched. Since then, in current dollars, about $150 billion has been spent on the program. That may seem like a lot of money to you, dear reader, but it is nothing compared to the cost of the next phase. President Bush plans to put up a permanent station on the moon...and to move on from there to Mars. "The sky's the limit," says the Economist.

Thus we see the full ambition of the new conservatives - to conquer not just this tired old ball we live on...but the entire galaxy. 

"This development will open new worlds; and its consequences will go a long way toward cleaning up and vastly enriching the old one. It will not be merely revolutionary: it will be Promethean."

The writer is Rod Martin of Vanguard, a republican Political Action Committee, a man who seems to have spent too much time staring at the full moon. Now, he howls:

"The only real question is who will exploit it. Will America colonize those new worlds, controlling the economic life of humanity to a degree today's Arabs can only dream of, or will we allow others to dominate us instead?

"Will Washington and Madison's children continue to lead in science, military power, and political dominance, or will it cede that to the socialists in Brussels, or even the totalitarians in Beijing?

"That question remains to be answered. But for today, while we wait for the new Orvilles and Wilburs to do their magic, George Bush is building - at a miniscule cost - the infrastructure to give America the early lead. The day may come when we and our children owe all we have to this single act of statesmanship."

Here we have what must be the new-Republican manifesto. Gone is any trace of republican virtue...laissez-faire deference, humility, modesty, probity and thrift. Instead, we are expected not just to get along with our fellow man, but to dominate him politically...to outdo him in science...and to outspend him. Forget letting him run his own life. We are going to control "the economic life of humanity."

They might as well be democrats!

What words can stand up against this grandiose vision, dear reader? it is arrogant. It is audacious. It is proud and confident. It is loony.

Yes, that is it...or lunatic. Root = luna, the moon.

The trouble with the new republicans is that they don't really believe in civil society or free markets. Orville and Wilbur Wright launched the airline industry without taxpayer money. Now, according to the republican guardians of the modern capitalism, it will take more than a similar act of entrepreneurship to put us in to space...but an act of statesmanship.

"I'm struck by...the grand idealism of the crowds..." writes our favorite martian, David Brooks, in the NYTimes. "It's sort of inspiring in this cold Iowa winter to see at least some Americans who have preserved, despite decades of discouragement, a stubborn faith in politics..."

Yes, thank God the rubes haven't caught on!

Bill Bonner
The Daily Reckoning

P.S. Overheard in a British Pub:

"Did you hear where President Bush is headed next?"

"No...where?"

"Well, he's decided Mars isn't far enough. He's going to the Sun."

"The Sun? How is that possible...wouldn't the shuttle burn up?"

"Oh, that's no problem...he says they'll go at night."