“Government is not the solution to our problem, government is the problem.”

Let me paraphrase another quote by Ronald Reagan to describe the Left’s current economic policy: “If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.” This economic policy is evident in the stimulus bill recently passed by the House of Representatives. Estimated costs of the House bill, including interest will exceed $1 trillion…that’s right TRILLION with a “T”.

How exactly does $200 million to rehabilitate the National Mall bring jobs back to America? How is the National Endowment for the Arts going to use its $50 million to stop home foreclosures? $600 million for the Federal government to update its fleet of cars to alternative fuel vehicles (with no requirement that such a contract go to US automakers)? $300 million dollars for Global Warming Research will hardly instill more confidence in the American consumer. Speaker of the House Pelosi even tried to get hundreds of millions of dollars earmarked for contraceptives. And now we learn that $1.8 billion has been given to the National Park Service, whose chief lobbyist is the son of the American Recovery and Reinvestment Act’s chief sponsor David Obey (D-WI). Make no mistake about it. The American Recovery and Reinvestment Act (H.R. 1) passed in the House of Representatives is neither economically stimulating nor will it quicken the end to the current recession the United States has found itself in. In reality, if the law as it is written is passed in the Senate, it will be the final nail in the economic coffin of the United States.

Most concerning with this Bill is the way in which it was shoved through the House with such speed. Such haste suggests that the authors of the bill and the Democratically-controlled Congress did not want time for the American people to see what was really in the Bill. The Bill, in actuality, is not a stimulus package, but a veiled attempt by the Left to permanently impose upon the American people its Liberal agenda. This Bill is a hodgepodge of spending meant to implement or increase entitlement programs that the Left had been unable to do until they had control. There are no longer checks and balances left in the Federal government and thus, there was no attempt at bi-partisan cooperation. Essentially, Speaker Pelosi and President Obama went to the House Republicans and said, “Come along or reap the consequences of denying the Messiah’s demands.”

Naysayers are being called “unpatriotic”, “un-American”, and are being derided by Democratic Congressional leadership as being obstructionist. To the Republicans in Congress I say, “Let the Democrats own this.” This will be the second stimulus package passed by a Democratically controlled Congress that wasted taxpayer money. This time, there is no Bush to kick around and blame. When it fails to produce jobs, or an economic turnaround, they will have no one to blame but themselves.

Why am I so confident it will fail? Because the Bill does not diagnose the problem and then create solutions to those problems, it simply throws money at the entitlement-dependent voting blocs the Democrats wish to appease for the next election. This bill is heavy in spending and light on tax cuts. That formula has never worked. More government spending will eventually result in higher taxes for someone, which means less money being spent in the market, which is the basic definition of a recession. There is a certain amount of money (call it XY) available to be spent; if you take X amount of money from one group and give X amount to another you have not injected more money into the market, you have simply redistributed (now YX). Ah, yes, Mr. Obama told Mr. “the Plumber” that was exactly what he intended to do.

Any economic stimulus package needs to inject money into the market to encourage people to buy products, companies to hire (or stop laying off) workers, and to restore confidence of the American consumer. How is that done? Look to North Dakota. That state has a Republican governor and a Republican legislature. They have cut spending and cut taxes and this year, they have a surplus…that’s right a surplus.

Cut the Federal budget and the Federal government: This is counterintuitive to most politicians…especially those on the Left. STOP SPENDING and STOP MANDATING!!!! Some states and businesses are in dire economic straits because of federal mandates such as Emissions Standards and No Child Left Behind. The Republican Congress of the 1990s forced President Clinton to do this (cut the Federal government) and allowed the 1990s to be a boom period…President Bush should have continued this. Unfortunately, his government spent money like he had a (D-TX) behind his name.

Tax breaks: The majority of the stimulus package should be in the form of payroll tax breaks for working Americans (not rebate checks, especially for those who never paid any taxes to begin with) and tax breaks for businesses—ALL businesses. Part of the reason why businesses are trimming payroll and moving overseas is because of the ridiculously high 35% business tax. Cut that rate by 10%-15%, save companies like Ford and Microsoft millions of dollars, and they will hire more people. Here is a fact: EVERYTIME the tax rate has been cut, government revenue has gone up! Imagine what you would do with an extra $100-$500 in your paycheck every month…you’d spend it. It is hard to argue, and not be disingenuous, that lower taxes result in the injection of more money into the consumer market.

Mortgage Assistance: Another major part of the stimulus needs to be direct assistance to mortgage holders. Guaranteed government loans should be implemented so that people could, despite lower home values, refinance into more affordable mortgages. This program should be open to ALL mortgage holders…even those who are paying their mortgages on time. Add this to your tax cut and you are looking at maybe $1000 extra per month to spend.

Fund Private Infrastructure Improvement Programs: This is one part of the economic stimulus package I agree with (kind of). Give money to private companies to be used for improving the power grid, expanding telecommunications, improving roads and bridges, etc. The government does not have to lead these projects.

Bailout States: Give states the money they need to counteract budget shortfalls for this year only. The stipulation: each state has to pass a law saying that the state budget cannot be increased by more than the inflation rate + 2% per year for the next 10 years (or longer). In other words, force the states to cut spending also.

Cut the Capital Gains Tax: I know, some of you are saying, “Why help out Wall Street?” Because cutting the Capital Gains Tax doesn’t just help Wall Street, it helps all investors and Americans. It encourages investment in companies which in turn gives companies money to spend on things like hiring more workers.

Pay off Americans’ Credit: I only offer this idea because if you are going to spend $1 trillion you might as well give it directly to the people. Pay off the debt that American’s owe on credit cards. “They will just go out and spend more,” you say. Exactly.


Check out this article on Keynesian Economic Theory (what the stimulus package is based on). http://www.cato.org/pubs/tbb/tbb_0109-52.pdf