A Tale of Two Presidents
House Chamber, Washington, D.C.
March 5, 2009
We have all heard a great deal of rhetoric blaming the Bush administration for the nation’s economic woes, and I actually rise to join that chorus.
We all are painfully aware that the Bush administration increased spending twice as fast as it did under Bill Clinton. The Bush administration added $160 billion to the deficit through tax transfers with its first stimulus bill a year ago – despite warnings that it would do nothing to stimulate the economy. It didn’t.
The Bush administration added another $700 billion to the nation’s deficit with the bailout bill last fall, despite many warnings that it would not stabilize the economy. It didn’t.
That administration ended with record spending, record borrowing, record deficits, and an economy in shambles.
But my question to many of my friends in the majority is this: if record spending, record borrowing and record deficits is the path to economic recovery – why aren’t we already enjoying a period of unprecedented economic expansion?
In fact, all of the bailouts, handouts and loan guarantees already enacted add up to $9.7 trillion – more than the modern day cost of the Space Race, the Vietnam War, the Louisiana Purchase, the Marshall Plan and the New Deal --combined.
The fact is that these policies don’t stimulate an economy, they destroy it. And it doesn’t matter whether these policies are enacted under a Democrat or a Republican – they don’t work.
They didn’t work in the recession of 1929 when Republican Herbert Hoover increased the marginal tax rate from 25 percent to 65 percent and piled up taxes on imports. They didn’t work in the resulting depression of the 1930’s when nearly a decade of Democrat Franklin Roosevelt’s New Deal spending failed to stimulate the economy. We forget that the unemployment rate in 1939 was actually slightly higher than it had been in 1931.
We know from a year of failed bailouts and handouts and loan guarantees that these policies aren’t working any better today.
Today we learned that General Motors, despite billions of dollars of taxpayer bailouts is still going under.
Monday, we learned that AIG, despite billions of dollars of taxpayer bailouts is still going under.
M. Speaker, don’t they understand that the sooner we stop bailing out failing companies, the sooner we can begin a genuine economic recovery?
Before the failed $700 billion Bush bailout bill, the nation’s budget deficit was less than $550 billion. Because of that mistake – which President Obama and many of my Democratic friends in this house supported and ultimately consumated – and all the other bills that have rushed through this house in the last few weeks with such reckless abandon, our deficit has tripled to $1.5 trillion for this year – on its way to an additional $1.75 trillion next year.
As tempting as it is to censure the folly of the Bush Administration’s fiscal policies, I think we should be far more concerned with the quantum leap in borrowing and spending that we are now pursuing.
There is one institution that doesn’t look back, and that’s the stock market. The past is utterly irrelevant to the stock market. The stock market is strictly a forward-looking measurement of what investors are betting will happen to our economy in the future under current policy. And its precipitous decline since these policies have been unveiled should be a warning to us all. Today the stock market closed at its lowest point in 12 years.
If the policies we are embarked upon were destined to save our economy, you would think that those who make their livings betting on the economy would be buying like crazy.
Mr. Speaker, perhaps we would do well then to stop the partisan bombast and realize that bad policy produces bad results whether the President is a Republican or a Democrat. And perhaps we should recognize that Einstein was right: doing the same thing over and over and expecting different results is the definition of insanity.