A Policy That Doesn't Work
House Chamber, Washington D.C.
February 10, 2009
Benjamin Franklin warned us that “Passion governs, but she never governs wisely.”
As the Congress and the President rush to enact the latest in a long line of mega-spending bills, I think we would be well advised to spend a little more time on the dispassionate math of the matter.
The Congressional Budget Office issued a report last week that warns us, as reported by the Washington Times, that the spending bill may “help in the short term but result in so much government debt that within a few years they would crowd out private investment, actually leading to a lower Gross Domestic Product over the next 10 years than if the government had done nothing.”
We are already running a $1.2 TRILLION dollar national deficit this year – with a spending bill racing through Congress to add another $800 billion more on top of that.
Let’s put that in perspective. A $2 trillion deficit. That’s 150 times the size of the annual deficit that has brought California to the brink of bankruptcy.
That’s $6,500 of new debt for every man, woman and child in the United States today – or $26,000 for an average family of four. This is not a theoretical number. That family will have to repay that $26,000 – plus interest – from their future taxes just as surely as if it appeared on the bottom of their credit card statement this month.
This is all being done in the name of stimulating the economy, but the supporters of this policy have not been able to cite a single example in all of recorded history where massive government spending has stimulated an economy. And there are plenty of examples where it has ruined economies and brought down great nations.
They have not been able to explain how government can inject a single dollar INTO the economy that it has not first taken OUT of the economy.
They have not been able to explain how we strengthen our economic future by leaving the next generation with an unprecedented debt that will take decades to pay off.
What then President told us last night is that by spending another $800 billion, he can create or save up to four million new jobs. Sounds good until you realize that comes to a minimum of $200,000 per job. By his own numbers.
By his own numbers, we could literally send those four million lucky families a check for $100,000 and save half of what he proposes to spend.
If this policy worked, we should already be enjoying a period of unprecedented economic expansion. The bailouts, spending and loan guarantees now total $9.7 trillion. As Bloomberg pointed out last week, that’s enough to pay off 90 percent of all the home mortgages in America. Not 90 percent of the bad mortgages – 90 percent of the TOTAL mortgages.
We have not seen prosperity from these polices because these policies don’t work.
They didn’t work in Japan in the 1990’s. They didn’t work in America in the 1930’s. The unemployment rate in 1939 – after nearly a decade of New Deal spending – was the same as it was in 1931.
M. Speaker, history tells us that bankrupt nations don’t last very long. Before we can secure the blessings of liberty to ourselves and our posterity, the nation’s finances must first be solid.
I beg the majority to pause and consider carefully what they are doing. I beg the President to pause and consider what kind of legacy he wants to leave. And I beg the American people, while there’s still time, to rise up and demand a return to fiscal responsibility.