Congress Carpe Diem

In 55 B.C. Cicero said: “The budget should be balanced, the treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest Rome become bankrupt. People must again learn to work, instead of living on public assistance."

Apparently no one listened. Now in 2009, we are forming the United Socialist States of America (U.S.S.A). Far fetched? It has happened to Europe and we are heading down the same path. Now, I agree that there should be some spending in targeted areas (infrastructure, alternative energy, education. We have a Congress who does not miss an opportunity to chastise and ridicule (and rightfully so) the Bush administration for spending like drunken sailors and abandoning all fiscal conservatism. So what is Congress’ response? Borrow and spend even more, so what if we don’t have it? It will be repaid some day, (wink-wink) by future generations. Last fall, Henry Paulson scared Congress into hastily approving TARP funds for banks to lend in order to give the economy a desperately needed kick start. The dark alternatives discussed in those closed-door sessions have since been identified as complete economic collapse, catastrophe, chaos and national panic. Thing is, the banks who received the funds have lent little, if any of the money, choosing instead to hoard the cash because they still did not have a good handle on the value of the assets they had secured with prior loans. So, the kick start has not happened, and the last time I checked we have not gone under Martial Law due to the inevitable collapse that was sure to happen if Congress did not listen to Henry Paulson.

The liberals in Congress are seizing this opportunity to grow government and increase our dependency on it for years to come. As a catalyst, they’re using a chief executive whose credentials include college professor and community organizer. Well, he was in the Senate as well, but while there he never authored even one piece of legislation. But he’s eloquent, speaks of change and describes air force one as ‘spiffy’. Congress is also preying on the fear of the American people who are being sold a bill of goods. But people are wising up. People realize that we are bankrupt as country, dependent on other nations to support us by purchasing our treasury securities; that we send out $70 billion each month more than we bring in; and we’re now borrowing even more to try to solve the problem. People realize that if you’ve maxed out your credit card and you go into further debt to pay off the first one, what problem have you solved? People realize that our own Congressional Budget Office concluded that the spending package will actually hurt the economy more in the long run than if we were to do nothing, because the massive government debt would crowd out private investment, actually leading to a lower Gross Domestic Product over the next 10 years. People realize that the way to increase GDP and grow the economy is through private sector investment fueled by tax reductions, not by bloated government controlled spending.

Robert Hall from MIT and Susan Woodward from UCLA, both PhD economists undertook a study to determine the effects of government spending on GDP going back to WWII. They concluded that spending multipliers result in GDP growth of about 1; that is for every dollar of ours spent by the government, roughly $1 is returned in additional growth; basically break-even. Christina Romer, Obama’s Economic Advisory chair, authored a paper in 2007 ‘THE MACROECONOMIC EFFECTS OF TAX CHANGES’ studying the effects of tax reductions on GDP. It’s important to note that Romer is considered by her peers to be one of the world’s foremost experts on the Great Depression; and generally one of the most respected economists anywhere.
Among the findings were:
‘A Tax increase of one percent of GDP lowers real GDP by roughly three percent’
‘Investment falls sharply in response to tax increases’
‘Tax cuts have very large and persistent positive output effects’

So even Obama’s own advisors have argued the merits of tax cuts for stimulating economic growth. This is supported by many economists around the country. But Congress knows better. Oh they’ll throw some tax cuts in there, right next to the cash for illegal aliens in the form of tax rebates; billions for ACORN; 850 million for Amtrak who has never shown a profit; and this very disturbing plan –

James C. Capretta wrote on National review:

“There’s now $20 billion in new discretionary appropriations for HHS in the bill.

What’s just as troubling is the large number of far-reaching policy changes tucked away in the bill.

For instance, the Democratic majority is laying the foundation for government rationing of health care—and the public has heard virtually nothing about it.

The bill provides $1.1 billion for a new program of comparative effectiveness research. The idea is to study medical practice patterns, new products, and new technology to determine what is ‘cost effective.’ In the UK, a similar program run by the National Institute for Clinical Evidence (NICE) is used to deny payment by the government for certain drugs and procedures that are said to be ‘cost ineffective.’

Democratic lawmakers will deny that rationing is their intent, but that is not credible. Why create a government program to study what’s cost effective if not to use the information to inform payment and coverage decisions? The problem is that this kind of research inevitably includes value judgments (how much is an extra year of life worth?)”

James C. Capretta is a fellow at the Ethics and Public Policy Center and a health policy and research consultant.


Cost for Amtrak who has never shown a profit – $850 Million
Cost to fund ACORN – $4 Billion
Cost of tax ‘rebates’ to illegal aliens – Lord knows
Cost of an inept and corrupt government – Priceless.