Friday, February 13, 2009

Understanding the “Need” for the “Government” Stimulus

As a few easily-duped Senate Republicans were used like chips in a poker game on Friday evening to strike a deal to send this Nation $1.3 trillion (when considering all amendments to the bill) more in the hole, and to borrow from our children’s future to pay for our current “needs,” this irresponsible act should beg the question to all of us, how was this so-important bill written, and what is so magic about the number “$800 billion” set by the President and Vice President as necessary to stimulate the economy.

After spending eight years as staff in the U.S. Senate, it is beyond alarming how politics almost always trumps policy, and how thoughtless our policymakers have become. Make no mistake, this bill is random in its provisions and correlates little to the need for economic stimulus. It is a wish list of Nancy Pelosi, Harry Reid, and the committee chairmen from the Democratic Caucus across Capitol Hill. It is a purely partisan bill that was crafted by Congressional Democrats over a period of a month in secret staff meetings, and exclusive of any Republicans. It is the product of a backwards effort to “hit” the President’s randomly-selected target of $800 billion. It is merely a passing of the plate in search of pet projects, an effort designed to garner enough support and to fill the $800 billion tank. A target based not on analysis, but rather on an over-self-inflated bank account of political capital.

Why now? Why so fast? Because the President can get away with it. A month, six months, a year from now, he may no longer be able to jam a massive social welfare and union payoff bill down taxpayers’ throats. He must strike now and fast while the American drones that elected him still have their glazed eyes and hopeful hearts. After all, soon to come is another round of Troubled Assets Relief Program – or TARP to bailout irresponsible businesses, a huge Omnibus appropriations bill, then an enormous federal highway bill, and yet a third TARP bill right behind that. This Congress is on track to spend an amount equal to the entire U.S. gross domestic product ($14 trillion) – all in one year!!!

Let’s look at the warning signs for this bill. The Congressional Budget Office indicates in its February 4, 2009, report that this bill will create between roughly 1.3 and 3 million new jobs. On the low and high ends, that’s $600,000 and $200,000 per job, respectively. Sustainable jobs? No. But jobs that will exist long enough to get Mr. Obama and his Congressional leaders re-elected, and then start to disappear just in time for a new Administration to take the blame for the demise. Republicans and economists who are supportive of taking action argue aggressively that this bill will not stimulate the economy as its being sold. If the President truly is for small businesses, wouldn’t it be more of a stimulus to this economy to simply zero out taxes from small businesses for the next two years with tax incentives to hire new employees? Instead, by mortgaging the future, CBO indicates that this bill will have an adverse effect on these same businesses as taxes will have to be raised to support the future debt.

This bill is not “needed.” There is no doomsday around the corner for the economy if billions are not spent on painting school hallways, building a Frisbee golf park in Maine, or helping to prevent sexually-transmitted diseases. There is no doomsday if we fail to send billions to federal agencies to combat climate change, or buy more fuel-efficient vehicles. There is no doomsday if $650 million more federal dollars are not given to Americans to switch from analog to digital television. While some of these are things we should invest in for the long term, they are not things that will break our economy in the short term.

So, Mr. President, it’s time to hit the “start over” button on this process. If you truly are a figure that transcends politics and wants Washington to work in a new way, here is how you should work to stimulate the economy: First, take a breath. You control both Houses of Congress and the White House and have the luxury of a thoughtful process. Your race for passage of this bill screams that is not in the best interest of the Nation. While you have momentum from your election to implement your agenda, it is not your agenda that is being implemented with this bill. This Nation is $11 trillion in debt, and with future obligations to Social Security and Medicare, we are heading quickly toward bankruptcy. This is not the time to put politics before policy. It is time to come together as a People, and make the most effective and efficient investments. You won the election because of your temperament, mostly. Exercise it and slow down this process. TARP 1 was done as you are proceeding with this and Americans expect that you will learn from that.

Second, sit with leaders from both parties and talk through a list of priorities that directly stimulate the economy in the short term and long term. Be completely clear to them that the list should only include non-parochial priorities. You took a good first step by calling for no earmarks in the bill, but by ceding the drafting of the bill to a Congress with a 12 percent approval rating you lost control of the process and failed to lead. You should appear on television and walk through what is in the bill and why each provision is important enough to borrow from the future to pay for today. Talk about the Alternative Minimum Tax fix, explain your investment in new technologies, and other necessary provisions.

And, third, you should stop paying back constituencies that contributed to your election. You made it clear during your campaign that you were not beholden to lobbyists or special interests. Well, your words speak louder than your actions of late, and this needs to change.

We are a diminishing country, Mr. President, and there are major and very severe consequences for spending more into debt. Stop this. Government is not the engine that has made this country great. In fact, it was excessive government that served as the catalyst for the American Revolution and the formation of this great Land. We cannot spend ourselves to freedom and prosperity, but we can harness the power of the American people and let innovation and development take hold. But with crushing debt on our shoulders we cannot be anything but servants to your bureaucracy in perpetuity.

Submitted by ASO member: Ken Nahigian


John Kalitka said...
This comment has been removed by the author.
John Kalitka said...
This comment has been removed by the author.
John Kalitka said...

Good Post. The so-called stimulus package is ugly and it's a jam down. At least two colossal deceptions at the heart of this process reinforce your points.

First, President Obama promised "Sunlight Before Signing" during the presidential campaign--an initiative to counter situations where "bills are rushed through Congress and to the president before the public has the opportunity to review them." Specifically, the program was described on the Obama campaign website as requiring a five-day public comment period for all non-emergency legislation before presidential endorsement. The present legislation is reported to be 1,071 pages, and released just last night. Even Democrat Frank Lautenberg predicted on Thursday that no one would get a chance to read the entire final version before the bill comes up for a vote. Clearly, Congress isn't interested in reading the contents of the bill. But, it's now also clear that the President never actually intended to implement a "Sunlight Before Signing" program. It's hard to imagine a situation any more appropriate for such an initiative to be put into practice. Still, the President plans to sign the bill on Monday after the expected House and Senate passage late today.

Second, during his Monday evening press conference, President Obama suggested that Republicans opposed to the so-called stimulus package "believe that we should do nothing." That's not true, of course. Republicans want to cuts taxes as a means of jump starting the economy. If the President disagrees with that approach, he may say so. But, he cannot fairly characterize Republican opposition as "do nothing."

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