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Wednesday, January 28, 2009

House Passes Trillion Dollar Stimulus Package In Win For Obama (No Republicans Voted For It)

After coming to a vote late Wednesday, the $819 billion spending bill cleared the House in a vote of 244-188. Eleven Democrats opposed the bill. Zero Republicans supported it. I keep seeing varying figures for the legislation's price tab, so I'm not sure which one is exact- just remember that over the next decade the total cost of the bill will exceed $1 trillion.

The American Recovery & Reinvestment Act of 2009 promises to make "supplemental appropriations for job preservation and creation, infrastructure investment, energy efficiency and science, assistance to the unemployed, and State and local fiscal stabilization." This website makes it easier to read through and navigate, and provides commentary from a liberty-minded perspective.

The ultimate problem with this "stimulus" package is that it doesn't stimulate anything. It is not as if this money comes from some magical place and infuses our economy with new cash. It comes from our economy and goes to other places in our economy. It just moves money around. In all probability, the money ends up in a less productive place than it was to begin with. Regardless, it's not the government's place to decide that for us.

Now Now Now! We Must Act Now!

The shrill urgency of the Obama administration in pushing this bill through Congress was disconcerting:

President-elect Barack Obama on Thursday said Congress must take "dramatic action" on his economic aid package as soon as possible, warning that a failure to do so would have devastating long-term consequences for the nation.

"If nothing is done, this recession could linger for years. The unemployment rate could reach double digits," he said.

"For every day we wait or point fingers or drag our feet, more Americans will lose their jobs. More families will lose their savings. More dreams will be deferred and denied. And our nation will sink deeper into a crisis that, at some point, we may not be able to reverse," he said.

Rushing people to make such a decision with that many zeroes after it is not the behavior of a responsible politician, it's more like the tactic of a sleazy used-car salesman. Where's your exit strategy, Mr. President? When Congress takes the President's cue and rushes a trillion dollar spending bill to the floor and passes it, something not-so-good probably just happened. It's as if Barack Obama took a page right out of George W. Bush's playbook. Remember the fear-mongering he used to rush the Patriot Act and Authorization for Use of Military Force Against Iraq through Congress?

But we've got to do something!

To be clear, you mean "the government has to do something," and no it doesn't. It certainly doesn't have to do this. There are a lot of other actions the government could take that would help the economy, which involve lowering spending and decreasing the size of government. Obama can say "There is no disagreement that we need action by our government, a recovery plan that will help to jumpstart the economy," but he's simply wrong. If you would like to read a brilliant alternative to the policies just approved by the House, try this:

A massive increase in spending on hurried projects of uncertain value, financed by borrowing, is a promise to raise taxes in the future and to squander resources in the meanwhile. That is not the road to recovery. That is not the road to prosperity.

Instead, I'm proposing today a radical re-imagining of our tax system. I am recommending the elimination of the payroll tax. The payroll tax is a regressive tax that falls harshly on the poor. And it is deceptive, an unacceptable characteristic of a tax in a democracy.

Unlike a temporary rebate of payroll taxes, eliminating the payroll tax will change incentives facing firms and workers. The result will be job creation and increased worker compensation. The permanence of the change raises the effectiveness of that encouragement, again in contrast to a temporary rebate.

But eliminating the payroll tax without reforming the budget and entitlement programs would be irresponsible and would rob the tax cut of much of its kick.

The payroll tax currently generates about $700 billion. We will pay for that reduction with three other changes:

--Eliminating all corporate welfare. Corporate welfare rewards those corporations that excel at lobbying rather than serving their customers. Eliminating it will save $100 billion annually.

--Implementing spending reductions in all departments of 10%, saving over $250 billion. Such cuts in a federal budget heading toward $3 trillion are hardly draconian. They merely return spending to the level of a year or two ago.

--Making small across-the-board increases in the income tax rate, yielding $350 billion. The poorest workers will in fact see a significant improvement in their after-tax income because the elimination of the payroll tax will overwhelm the increase in income taxes. The richest Americans will see a slightly larger increase because their payroll tax contributions are currently capped.

At the same time, I will appoint two bipartisan commissions to reform the budget process itself and the Social Security and Medicare programs. The budget process is out of control. Signaling to the private sector that the public sector will live within its means and avoid the erratic behavior of the past year will go a long way toward rejuvenating the economy. So will reform of Social Security and Medicare.

It's not too late to act to stop this bill from becoming law

This is the biggest spending bill in history. Stop and reread that sentence. Again, more slowly. Let it sink in. For that much money, this bill should be more than mediocre and risky. It is unfortunately both. It will destroy over a trillion dollars worth of productive capital, substantially increase the national debt, and push the deficit a trillion dollars past the already historically unprecedented levels of the Bush Administration.

Thankfully, this bill is not law yet. It still has to pass through the Senate. You must take action now to make sure this doesn't happen. If the Republicans in the Senate hold solid against this legislation like their colleagues in the House, and just a couple Democrats vote against it like those in the House, we could block this bill from ever becoming law. So call your Senators ASAP! Here is a list of all the Senators with their contact information and phone numbers. Call, write e-mails, leave messages, call other state's Senators (they're spending your money after all!) -and let them all know not to pass the stimulus package. Be polite, intelligent, concise, and adamant. Write out what you're going to say first if you might stumble for words.

Do this as soon as possible. We have very little time to lose. Thank you.