John Maynard Keynes - 15 March 1991

It took only 24 hours for Washington to switch from high theatre to low comedy. One night, the chamber of the House was ablaze with stage lighting, vibrating with applause, reeking of goodwill and self-esteem. It was that famous night and it was the president's finest hour.

Next night, the House brought to a vote an item, which last autumn nobody seemed to notice had been slipped into an omnibus bill authorised by the Senate. The item was $500,000 to build a museum in a small town on the prairie because it was the birthplace of Lawrence Welk, a band leader – the venerable survivor of what was known as the "dance band era". He started in the 1920s. He went on playing dance music when all but he had stopped. He weathered the heyday of the big vocalists, went on and on playing the tunes of the '20s, '30s, '40s as if rock 'n' roll had never been born. His audience aged with him.

Still there were congressmen who – just when bills are coming up to deal with crime, drugs, poverty, mental health, not to mention paying for the war and fighting over the new defence budget, there are congressmen who are mean enough to think that half a million dollars should not be set aside to build the Lawrence Welk Museum in Strasburg, North Dakota. "What will they do for an encore?" pleaded a congressman from Massachusetts who's a good 1,500 miles away from the prairie. "Earmark funds to renovate Guy Lombardo's speedboat? Restore Artie Shaw's wedding tuxedo?" Even this joke was lost on most of the members present because you have to be, I should think crowding your 70s to know who Guy Lombardo and Artie Shaw were.

The proposed outlay went down in a wail of sarcasm and a flush of shame. "It caused us," said another congressman from a prairie state, "a lot of national embarrassment." So the vote to kill off the Welk museum was 71-11. That makes 82 members present and voting. There are 435 members of the House of Representatives which only goes to show that well over 300 members were either too embarrassed or too angry to show up. The debate over the Welk museum took an hour or more whereas two preliminary matters of current interest were disposed of in no time.

First, a package of aid to Israel was voted smartly, as much a reward for having stayed out of the war as a reparations fund to take care of the damage done by Saddam Hussein's Scud missiles. Secondly, not a bill, but a swift resolution, more of a warning really to the non-combatant nations of the recent coalition to pay up the billions and millions that they promised toward the cost of the war. The general exhilaration over the war is not waning so much as being brought, the morning after, brought face to face with a general guilt, despair in many people, over the present weaknesses of American society.

The truly frightening crime rate on the streets of many big cities, the hopelessly lopsided unemployment rate among young blacks and other minorities. Something like one in three. Such worrisome facts which are no longer anomalies, of four babies in five, among black women, being born to single women. These woes, and several others, are pigeon-holed by politicians under the unemotional phrase, the "domestic agenda". And the poor, bruised Democrats, especially the great majority of them who voted not to use force against Saddam Hussein, are, at the moment, eager to stop talking about the president's firm grasp of foreign policy, the strong subtle way he built an unprecedented coalition of nations. His brilliant timing of the steps towards a four-day war. They want to talk as soon as possible about the comparative weakness of his domestic policies.

They're not doing this with much relish because, if the truth were told, and it will be, the Democrats themselves have no rousing new solutions to the great, chronic social problems. Ten years after Reagan radically changed the political discourse, they still lean instinctively towards throwing money at problems. Indeed, some of their leaders have grown bold enough to declare in public that what the country needs is more taxes.

There's an old slogan, which way back there, 50 years ago, was chanted with pride by the henchmen of Roosevelt's New Deal. It was almost a rallying cry. It was, simply, "Spend and spend, and tax and tax". Any politician who even quoted it admiringly anywhere in America today would, in the act, just about kill his chances at the next election. Also, even the most ancient sitting Democrat, the once most rabid New Dealers, know that there isn't, as there used to be when America was the world's creditor nation, there isn't the money there to spend. This is glaringly obvious every day we tot up the still-rising deficit. Every time a city government, no matter what colour its political stripe, every time it faces a new budget, as all the cities are doing at this time, the first thing even the most liberal mayor has to do is to see where, among all the city's services, he's going to cut spending, not enlarge it.

This painful necessity made me think dreamily back to the great spending days of Roosevelt. And recall how a famous economist, the late, great John Maynard Keynes, made his first visit to Washington. He was touted around the White House as the man who had a magic cure for the Depression. How he was closeted with Roosevelt and his Secretary of Labour, Miss Frances Perkins. Roosevelt was dazzled by him. Also baffled. So that when Keynes had left, Roosevelt turned to Miss Perkins and said, "He talks nothing but mathematics! What's it all mean?" Miss Perkins, in what, in retrospect, must be thought of as an historic moment in American history, Miss Perkins simply, gravely, explained to him the basic method of deficit financing. "You mean," Roosevelt's reported to have said, "you mean you don't earn and spend, you borrow and spend?" That's it. He'd got it. He was on his way. To the gratitude of a despairing populace and the private moans of a few sourpuss Republicans who talked solemnly about how Ancient Rome fell by just such practices and how, one day, our children, our grandchildren, would have to pay for this new, wicked national habit of living on credit. Of buying things you couldn't afford.

So, what the Congress is up against, what every governor and mayor who is now buckling down to the new 1992 budget, is how to divide up the pie already baked? In other words, since there's no new money flowing in, how to re-apportion the money that's there and that means robbing Peter, to run, say, housing for the poor, to pay Paul who is desperate for a new army veterans' hospital. Of all the rows, the debates that loom up for the Congress, the one that will spark most heat is going to be size and shape of the next defence budget. Already the parties are dividing off for the battle, and division are arising within the parties. Roughly, this is how some of the arguments go: the war in the desert, say the jubilant Republicans proved how right Mr Reagan was to build up the military and especially the high-technology weapons during his eight years in office. Others say that the experience of the air force in being able to pinpoint bombs to drop precisely down a chimney shaft only goes to show that the huge monies spent on heavy hardware, tanks for instance, could now be saved, or shaved. Yet another faction points with pride to the demonstrated superiority of American tanks over Saddam's Russian tanks, a superiority they believe must be maintained.

Then there's a body of opinion, mostly among Democrats, which says that since the collapse of the Russian empire, the break-up of the Soviet Republics and the visible impotence of eastern Europe, the Soviet Republics are no longer a military threat. "Not so," responds a group of tough hardliners, veterans of both Republican and Democratic administrations. There is still a continuing group of old Cold War experts who run something called the Committee for the Present Danger and in spite of the tumbling dictatorships and the crumbling of Soviet power, they maintain that the nuclear capability and the back-up power of the forces which some Soviet leader could call on, supposing Gorbachev was overthrown, are today greater than they have ever been. And so long as we don't know who's going to take charge to mobilise these forces, then they still represent a threat to the United States. This is a small but knowledgeable group and by no means excluded from the high councils of the administration.

This whole coming debate is going to be simplified, over simplified, it always is, as a choice between guns for the Pentagon and butter for the poor. Between defence and social services. At the moment, only one thing's for sure. After the dazzle of the Gulf victory and the parade of homecoming heroes and the popular determination not to treat them as scurvily as the Vietnam veterans were treated, the pay of the voluntary army will go up. And the pensions for the retiring. And the compensation for the families who had to had to pinch and borrow while their men were six months off in the desert.

All these costs are thought of, now, as minimum obligations to the brave. They will constitute a whacking proportion of the new defence budget and he will be a bold senator, or congressman, who dares to vote against them.

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