Here is a full page ad by the CATO Institute regarding opposition to President Obama’s stimulus package. (I’m privileged to sit on the board of the Cato Institute which sponsored the ad).
Along with that here is a video of theirs to go along with it.
Obama’s So-Called Stimulus: Good For Government, Bad For the Economy
By Howie Rich
One of the most fundamental questions facing our American democracy (and what’s left of our free market economic system) is this: Who’s responsible for creating jobs?
Is it the government? Or is it the private sector?
Actually, it’s probably more accurate to say that this was one of the fundamental questions America faced during the present decade, which is now limping toward the finish line – a question which was answered emphatically on the side of the public sector.
In a loud, bipartisan chorus involving billions of dollars in new boondoggles and trillions of dollars in new debt, our leaders basically told the private sector to take a hike.
Politicians came to Washington and one-by-one – irrespective of their partisan affiliation or previous ideological convictions – became utterly convinced that the only way to create new jobs in this country was through massive new public works projects, expanded public sector bureaucracies and an increased governmental role in everything under the sun.
This, of course, included an ill-advised ramp-up of government’s involvement (and investment) in the sub-prime mortgage business.
In fact, so busy were Washington politicians in propping up the public sector and doling out low-income housing loans that they failed to notice that the bureaucratic spending was unsustainable and the impending damage to the private sector was potentially catastrophic.
Even when the handwriting began appearing on the wall, government plowed ahead blindly with its expansion, adding record numbers of public sector jobs during the first quarter last year at a time when the private sector was shedding the first of 2.6 million jobs it would eventually lose in 2008.
Only in the months leading up to elections, it seemed, did we hear talk of reversing the trend and moving our country away from this orgy of excess.
Two years ago, one of the central campaign talking points of the Democrats’ sweep of the mid-term elections was the fact that Republicans had added $3 trillion to the national debt – a figure party leaders said was intolerable. In 2008, it was President Barack Obama’s promise of middle class tax relief that more than anything else led to his victory.
Think about that for a moment – after six years of Republican rule, Democrats won Congress in 2006 by promising less spending. Then they won the White House two years later by promising lower taxes.
Did Democrats deliver on their 2006 promises?
Not even a little bit. Like Republicans in 2000, they went right along doing what the party in power before them had done, which is to say they grew government at record levels without any thought as to the consequences.
And now that “consequences” are most assuredly upon us, what has the government’s approach been to solving the problem?
Why it’s the most massive government intervention in the private sector ever, spearheaded by a scarcely-fathomable $10 trillion in federal bailouts, loan guarantees and related “stimulus” plans that have failed to make even a dent in the decline!
And today, leafing through the billions of dollars in local bailout spending that President Obama has proposed, we see precious little of the “middle class tax relief” he promised.
In fact, Democratic Congressional leaders have stripped the plan of tax relief almost entirely in favor of additional spending on government schools and other public works projects.
They tell us these projects will create thousands of jobs – and they will, in the short term for construction companies with cozy, pre-existing government relationships.
But where is the long-term plan to create /permanent/ jobs?
And how, exactly, does starving household budgets of tax relief in order to build government monuments with borrowed money constitute anything other than a perpetuation of what got us into this mess in the first place?
America needs new jobs, of that there can be no doubt. But until we figure out where they should /really/ be coming from, our efforts will continue to be frustrated.
The author is Chairman of Americans for Limited Government
By Howard Rich
Chairman of Americans for Limited Government
It’s a typical Washington elixir.
When bad press for multi-billion dollar bailouts has got you down, there’s nothing quite like a government program “for the children” to put things right again – particularly when the new President needs a quick victory to get his “Era of Bigger Government” off to a successful start.
Such is the drama surrounding the “reauthorization” of SCHIP, the State Children’s Health Insurance Program, which passed in 1997 ostensibly in lieu of socialized national health care and will be “re-upped” after President-elect Barack Obama takes office this month.
Never mind that the program is unsustainable. And bankrupting the states. And not insuring who it claims to be insuring – all those are things that can be worked out later, right?
After all, we’re only $10 trillion dollars in the hole, with another $10 trillion pledged over the last four months alone to help us avoid an “economic Pearl Harbor.”
If money grows on trees, as our leaders evidently believe that it does, why not blow billions more of it on a program that’s not only failing its mission, but doing something government shouldn’t even be doing in the first place.
Since its inception, SCHIP has been a case study in everything that’s wrong with government – another example of feel-good rhetoric and lofty promises paid for with your money, except the rhetoric never matches the reality and the promises are always too good to be true.
Although its proponents are quick to throw up pictures of starving inner city children, the fact is that SCHIP has insured millions of adults, and middle class families over the past decade.
In some cases, SCHIP recipients were earning 300% of the poverty level.
This was famously exposed in 2007, when Democrats selected a middle school student named Graeme Frost to deliver the rebuttal to President George W. Bush’s veto of SCHIP reauthorization, only to discover later that the boy attended a $20,000 a year school and his family lived in a 3,000 square foot home valued at over $400,000.
And who pays the most for SCHIP? A disproportionately high number of poor smokers – the very people the program is supposed to be serving.
And on top of that, a recent Heritage Foundation report recently showed that 22 million people will have to take up smoking in America over the next decade or else the program will go bankrupt.
How many of those people will be classified as low-income?
Then there’s the biggest fraud of them all – the fact that SCHIP is cannibalizing the private sector to the tune of 6 out of 10 beneficiary recipients. That’s right, evidence shows that only 40% of SCHIP recipients are actually uninsured – a pretty amazing number when you stop and think about it.
Frankly, this defeats the whole purpose of the program, unless of course we want to start subsidizing this expense for people who can already afford it.
Not surprisingly, the 60% figure is higher than the government will admit, but not by much.
Even the Congressional Budget Office acknowledges that “for every 100 children who gain coverage as a result of SCHIP, there is a corresponding reduction in private coverage of between 25 and 50 children.”
Why is this relevant now?
Well, government simply can’t afford to continue unsustainably spending money on non-core functions, like providing health insurance to people who already have it.
Nor can it afford to bail out the states on SCHIP to the tune of tens of billions of dollars, which is what numerous governors are currently asking for.
Government must return to its core functions and get out of the business of subsidizing everything that comes along with a “for the children” sign on it.
By Howie Rich
We don’t name calendar years in America like they do in China, but if we did, it wouldn’t be hard to find a moniker for 2008.
It was “The Year of the Bailout.”
A.I.G, Bear Stearns, Chrysler, Citigroup, Fannie Mae, Freddie Mac, Morgan Stanley, Indy Mac and GM are just a few examples of taxpayer-funded benevolence this year, as our government veered wildly (and expensively) toward nationalization and rule-by-decree in attempting to resolve a crisis largely of its own making.
And while there is some confusion as to the current price tag of this growing “Bailout Mania,” we know that over the past sixteen weeks the U.S. government has poured nearly $10 trillion dollars into “correcting” the market.
You heard that right – $10 trillion dollars.
Think about that number for a moment, because it’s a lot larger than the $700 billion financial services bailout George Bush signed on October 3, which effectively marked the end of capitalism as we know it in this country.
That so-called “Emergency Economic Stabilization” is the bailout most Americans are familiar with, including the $17.8 billion chunk of it that was awarded to Detroit automakers.
But what about the rest of the money?
What about the $2 trillion in FDIC assurances, $1.75 trillion in Federal Reserve commercial paper purchases, $900 billion in term auction facility lending, $600 billion to insure money market funds, $600 billion to cover Fannie and Freddie’s worthless mortgage-backed securities, $550 billion for discount Federal Reserve loans, $500 billion to insure FDIC deposits, $300 billion for FHA mortgage relief, $250 billion for Citigroup debt, $225 billion for securities loan facility lending, $200 billion for Fannie and Freddie’s debt, $112 billion for A.I.G., and on down the line.
Add all those numbers up and you’re dealing with more than twice the inflation-adjusted cost of rebuilding post-World War II Germany, the Louisiana Purchase, NASA’s entire budget (since its inception), the S&L bailouts, Roosevelt’s New Deal, the Korean War, the Vietnam War, the Gulf War, and the Iraq War – combined.
Again, that’s inflation adjusted – and all of it spent or pledged by our government within the last sixteen weeks.
2009 could bring additional bailouts, as well, with President-elect Barack Obama proposing another $800 billion plan this week and a number of states announcing that they will seek $1 trillion from the federal government to bail them out of bad spending decisions.
The dimensions of this bailout culture are truly staggering, but other than trillions in “troubled assets,” what exactly have ‘We the Taxpayers’ purchased?
For starters, a lot of debt. With only a fraction of the total bailout tab on the books, our national debt has already soared to more than $10.7 trillion dollars.
That’s an astounding 72.5% of our gross domestic product (GDP).
Eight years ago, the debt was $5.6 trillion, or 58% of our GDP.
Throughout this crisis, we were told by leaders of both parties that government had to “do something” or else we would face an “economic Pearl Harbor.”
I would argue that with wealth disappearing, unemployment skyrocketing, productivity vanishing and consumers burying their money, the “economic Pearl Harbor” is upon is – and that the trillions in bailout funds did nothing to slow its fury.
In a recent article published in the Wall Street Journal, former American Express CEO Harvey Golub proposes a different solution.
“We must get back to our historic reliance on personal responsibility and market forces, and get government out of economic management,” Golub wrote. “It doesn’t do a good job, as the current economic mess amply proves.”
I couldn’t agree more.
Let’s not continue down the same road this year. Let’s make 2009 the “Year of Fiscal Responsibility.”
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