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Friday, February 6, 2009

First Spend, Then Borrow, Then Tax

First Spend, Then Borrow, Then Tax

While the rest of the country is working hard to cut costs, reduce budgets and live within our means, the politicos in Washington are rushing to spend money they don’t have.   The “pork-ulus” (stimulus) Federal spending bill has risen by the billions by the day.  The Democrat majority in the House passed the so-call Federal economic stimulus bill without any support from Republican members.  Now the $819B Democrat bill has swelled to over $920B based on US Senate amendments to increase spending and tax cuts.

According to the Wall Street Journal  “Twenty moderate senators -- from both parties -- are pushing a plan to bring the total package's cost down to about $800 billion, and put more emphasis on tax cuts. Led by Sens. Susan Collins (R., Maine) and Ben Nelson (D., Neb.), the group has been combing over the bill for spending programs deemed unlikely to provide immediate benefit to the economy.”

The WSJ indicated that the House has issues with the Federal stimulus: “Separately, a caucus of fiscally conservative House Democrats, known as the Blue Dogs, urged party leaders to embrace a "redoubled effort to streamline the stimulus and recovery package." In the House, 11 Democrats voted against the $819 billion package, nine of them Blue Dogs. Several other Blue Dogs voted for the package, but with reservations.”

According to FOX news, the public opinion is mounting against the stimulus bill, and the US Senate is feeling the political heat.   "This idea that the public is not excited about this package ... is really having an effect on Capitol Hill," Sen. Lindsey Graham, R-S.C., told FOX News, adding that most of the Senate suffers from a "herd mentality" and is swayed by public opinion. "There's nothing inevitable about this," said Phil Kerpen, director of policy at Americans for Prosperity. "The American economy is enormously resilient and it's always recovered in the past."            

In an interview with Greta Van Susteren from Fox News Channel, Senator Lindsay Graham R-South Carolina was blunt in his criticism, “Senator Graham: Yes, I think the process (stinks) -- can you imagine trying to do -- can you imagine a group of people taking a trillion dollars from the next generation of Americans, borrowing money from children and grandchildren, and doing it in a week? If it looks like we're making it up, we are. There are 16 senators off in a corner trying to save $100 billion. God bless them, but that's not the way you get bipartisanship. Ronald Reagan and Tip O'Neill set down and found a way to go forward with Social Security.           

On Fox News, Senator Graham continued, “I like President Obama. (But on this bill) He's been AWOL…he's writing op-ed pieces trying to scare people to vote for this bill. He's had lunch with us, he's had cocktails with us, he's talked to us on the phone, but he's never done the hard work of getting Republicans and Democrats in a room and telling the left: This is not going to be a free-spending bill. You're not going to be able to spend a trillion dollars that doesn't create jobs. And he needs to tell Republicans: You need to do more than just cut taxes. The president has not led. He has tried to campaign. The campaign is over. We've got to govern. Roll up your sleeves. There are at least 15 Republicans who want to do more than cut taxes, understand we need to stimulate the economy, but nobody is going to agree to this process. This is not the way to govern this nation and obligate future generations to trillions of dollars of spending.”   Interview with Greta Van Susteren, Thurs Feb 5, 2009

Americans for Prosperity has launched a petition on the Web site called to oppose what it calls the "big-government pork-barrel spending bill." The conservative Cato Institute also recently took out a group of ads with a statement, signed by 200 economists, saying they "do not believe that more government spending is a way to improve economic performance."

The total US Gross Domestic Product (GDP) is approximately $14 Trillion dollars.   The proposed Federal stimulus bill plus interest (to borrow the money) is approaching 10% of the US GDP.    Or to put the spending and tax cut binge in perspective:  The US Senate package is about the size of the total GDP (economy) of Australia, and with the interest tacked on it will approach the total GDP of Canada.  In FY 2007, the cost of the US government was $2.7 Trillion dollars.   Clearly the amounts of money (from taxes, US Government borrowing or from the devaluation of US dollar due to inflation) that the US taxpayer is expected to come up with is staggering.  

Leadership on fiscal policy would be for the US Senate to vote down the pork filled “so called stimulus package” and start over with a more reasonable bill.   Or the President could veto the measure.   Unfortunately, the Democrat leadership in the US Senate is determined to pass the bloated bill, at the expense of the US taxpayer for decades to come. Maybe it is time for the US taxpayers to throw out the big spenders (Dems and GOP) in Washington, and vote for a return of limited government that lives within it’s means and respects the taxpayers hard earned monies.   

© 2009, Jasper Welch, Four Corners Media,

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