Pelosi’s Stimulus Package Too Much for Republicans, Too Little for Dems
Yesterday, House Speaker Nancy Pelosi unveiled her plans for an $825 billion “stimulus” package and, before the ink had dried on reporters’ notepads, Wisconsin Democrat and House Appropriations Committee Chairman David Obey said that it might not be enough.
Remember, back in the day, when $750 billion was an eye-poppingly large number, when we were assured that we’d know where it was going, and when we were told it was all we’d ever need? How soon the Democrats have forgotten — now that the economy has continued to slide and that we see the first $350 billion lacked adequate oversight, they’re prepared to do it all over again.
Enough is enough.
We cannot recklessly spend our way out of this downturn; if we refuse to rip this band-aid away and accept the short-term sting, we’ll be forced to agonizingly pull our hairs out one by one. When we talk about similar periods of economic decline in the 20th century, we always hear about the Great Depression and the stock market crash of 1929 yet rarely hear discussion of the recession of 1920. Why? Because the recession of 1920 didn’t last. Because, that time, we allowed for the natural economic cycle to take its course. With regard to the Great Depression, however, the federal government did intervene, did interrupt the natural economic cycles, and it was the ensuing spending policies associated with FDR’s New Deal which delayed economic recovery for at least a half-dozen years, if not longer.
According to Lee Ohanian, vice chair of UCLA’s Department of Economics, in an August 2004 article in the Journal of Political Economy, Roosevelt championed anti-competition and pro-labor policies out of fear that the free market and capitalism had driven down prices and wages, and in June 1933 signed into law measures which would artificially inflate both and thus “short-circuited the market’s self-correcting forces.”
“Why the Great Depression lasted so long has always been a great mystery, and because we never really knew the reason, we have always worried whether we would have another 10- to 15-year economic slump,” said Ohanian at the time, commenting on the article. “We found that a relapse isn’t likely unless lawmakers gum up a recovery with ill-conceived stimulus policies.”
Ill-conceived stimulus policies? By all means, professor, please go on.
Ohanian and partner Harold Cole, another UCLA economist, calculated that the so-called National Industrial Recovery Act and its economic consequences accounted for 60 percent of the weak recovery, and argued that without such policies from Roosevelt’s White House, the Great Depression would have come to fruition in 1936 instead of 1943. Seven years. Once again, however, revisionist history–aided by the progressive leanings of academia–has since significantly clouded what truly happened.
“The fact that the Depression dragged on for years convinced generations of economists and policy-makers that capitalism could not be trusted to recover from depressions and that significant government intervention was required to achieve good outcomes,” Cole said at the time. “Ironically, our work shows that the recovery would have been very rapid had the government not intervened.”
Fast-forward to 2009, and America is oozing with government intervention. Enduring economic decline, Americans have no choice but to watch as the president-elect positions himself to greatly increase the size and scope of government and perpetuate the federal government’s spendthrift tendencies. Pelosi’s stimulus plan and Obey’s response were enough to elicit from House Minority Leader John Boehner, though arguably not the most conservative of Republican representatives, a very simple response:
From there, Boehner went on to say that Democrats were operating with “the flawed notion that we can borrow and spend our way to recovery,” and remarked that House Democrats entertained no Republican input when they outlined the $825 billion plan.
That’s not to say that Republicans on Capitol Hill have been silent. On Wednesday, the Republican Study Committee outlined their own stimulus plan which, according to the group’s press release, is rooted in three main fundamentals:
- Support Families through Tax Relief
- Economic Relief for American Businesses and Entreprenuers
- Save Future Generations from a Crushing Debt Burden.
Alabama Rep. Spencer Bachus, a solid conservative, 1969 graduate of Auburn University (always a plus), member of the RSC and ranking member on the House Financial Services Committee, remarked to those in attendance yesterday at a hearing organized by the House Republican Economic Working Group and featuring testimony from former EBay CEO Meg Whitman and former Massachusetts Gov. Mitt Romney that not only must the money our federal government so quickly disposes of as “stimulus” first be collected from the wallets of taxpayers struggling on their own to make ends meet, but also that the idea proposed by the Democrats could do more harm than good.
“High taxes starve the creation of capital,” Bachus said at yesterday’s hearing. “We need to communicate the message that the American people, individuals and businesses, can use capital more efficiently and effectively and grow it better than the government. We have a downturn where some people think that the best use of capital is by the government and that’s not a capitalist system, that’s a socialist system.”
Late yesterday afternoon, Bachus explained to America’s Right that we can learn from mistakes made by others, that a reduced tax burden and less government spending–not more–will help lead America along the road to economic recovery.
“Economic growth and job creation are dependent on capital,” Bachus said. “Of all of the major industrialized powers, the worst performing economy in the last ten years has been the Japanese economy and our corporate tax rate is second only to theirs. We need not only lower taxes but also must address entitlement and regulatory reform and curb government spending to create economic growth and prosperity for all Americans.”
Bachus is absolutely correct. We cannot spend our way to economic recovery. We cannot break free of the ills of excessive regulation and a heavy tax burden by increasing the size, scope and involvement of the federal government. The key to recovery is the adherence to the tenets of fiscal conservatism — low taxes, responsible spending and a smaller, less invasive government.
When looking at our current economic situation, remember that it was FDR’s fear of low wages and low prices which fostered the New Deal and, in turn, extended the Great Depression for more than half a decade. Then consider what President-elect Barack Obama said in his January 8 speech, that our economic difficulties have been caused by circumstances “where a lack of spending leads to lost jobs which leads to even less spending” and that “only government can break the vicious cycles that are crippling our economy.” Obama seems to draw comparisons with Abraham Lincoln; I think he’s looking more like FDR.
It seems painfully obvious to me that every single American man, woman and child are now being forced to repeat lessons from history which we should have learned long ago. While we may not be able to put toothpaste back into the tube and somehow un-spend the $750 billion from last October’s bailout disaster, we need to make our voices heard with regard to the $825 billion more which Pelosi and her liberal colleagues are prepared to throw away. This spendthrift trend must stop.
We are struggling. No doubt about it. Unemployment is up, retail sales are down. Signs everywhere point to long-term decline. Regardless, continuing down this slippery slope to socialism can only serve to lengthen our troubles and further weaken our nation.
Enough, my friends, is enough.