January 22, 2009 Speech in Support of House Joint Resolution 3, House Chamber, Washington, D.C.

M. Speaker:

This resolution presents the House with its last chance to admit that the Bush bailout has not worked.  And it will not work because of a simple and self-evident truth:

Government cannot inject a single dollar into the economy that it has not first taken out of the economy.

 It’s true that if I take a dollar from Peter and give it to Paul, Paul has one more dollar to spend and that dollar will ripple through the economy.

 But we forget the other half of the equation: Peter now has one less dollar to spend, meaning one less dollar to ripple through the economy.  In short, it nets to zero.

 In fact, it nets to less than zero, because you are shifting enormous amounts of capital from investments that would have been made strictly by economic calculations to investments that are made entirely by political calculations.

 We are not helping the economy with these bailouts – we are hurting it.

 If they actually worked, we should by now be enjoying a period of unprecedented prosperity and economic expansion.

To those who say, “Well, it’s just the way Bush administered it,” let me pose this simple question: when in the entire history of civilization have such bailouts actually worked?  

They didn’t work in Japan in the 1990’s.  They didn’t work in America in the 1930’s.  And they aren’t working today.

 Fortunately, we know what does work.  Reductions in marginal tax rates and reductions in taxes on investment consistently do stimulate the economy.

 They worked when John F. Kennedy used them in the early 1960’s and they worked when Ronald Reagan used them in the early 1980’s.

 When taxes are reduced on productivity, productivity increases.

 But how typical of government to resist what we know works and to embrace what we know doesn’t work. 

 This resolution offers the House one last, fleeting chance to admit its mistakes, to step away from rigid adherence to failed policy, and to offer the change that the people of this nation deserve.