Help Us Stop “America’s INFLATION Stimulus Bill”
by Colin Hanna, http://www.LetFreedomRingUSA.com
Take Action Now – Petition Your Senators:
The so-called stimulus bill appears to be on the verge of passage following a “compromise” crafted by Republican Senators Specter and Collins and Democratic Senator Nelson. It demonstrates a stunning ignorance of how business works and how jobs are created. For example, in its over 1500 pages, there is not one single mention of increasing profits in American businesses, yet any business owner knows that sustained profits are the only way that businesses can expand and create new jobs. Without a clear focus on increasing profits, the long-term result of a huge increase in government spending can only be one thing: staggering inflation.
In addition to the economic issues, this massive inflation stimulus also raises three major moral hazards:
- Tens of millions of citizens who have retired on fixed incomes will see their purchasing power erode severely and their financial security collapse. Do we want to bear moral responsibility for breaking trust with our retirees who have worked so hard to achieve financial security?
- At the other end of the age spectrum, tens of millions of young people will find their future dreams thwarted by an oppressive tax system burdened by repaying trillions of dollars of debt incurred just this year. Economists say that this unprecedented public borrowing could “crowd out” private capital that would otherwise be used to expand existing businesses and start new ones, thus shackling the next generation with no-growth prospects.
- President Obama’s pledge of transparency in his new Administration is rendered meaningless by exempting this bill from the budget disciplines and cost disclosure requirements of all other legislation. By allowing Nancy Pelosi and Harry Reid to assemble this bill the old-fashioned way, larding it up with economically unsound projects cynically included to buy votes, the new President risks breaking faith with the American people on a matter of moral as well as political integrity – within his Administration’s very first month. These are not merely economic considerations; they also present grave moral hazards.
The bill as it stands is entirely government-centric. It assumes that government is the best or only financial actor capable of addressing the politically-motivated overextension of credit crisis and a housing market breakdown. Absent are incentives for the private sector to inject new capital into the economy.
This so-called stimulus bill contains more pork than a pig farm. President Obama has badly bobbled his first real legislative leadership opportunity and abdicated to Nancy Pelosi and Harry Reid. Obama originally proposed a massive infrastructure investment program. He should have stuck to it.
Providing infrastructure is a core function of government. It enjoys support from conservatives and liberals alike. Conservatives base their support on time-tested economic principles initially set forth by Adam Smith, the founding father of free market economics. He argued that government’s proper role was to provide a permanent military for national defense, a police and court system to control crime and administer justice and a public works system to facilitate the flow of commerce along roads, bridges, and canals. Contemporary conservative legislators who may be budget hawks on most government spending are typically supportive of spending on infrastructure. Our roads, bridges and railways are in a deplorable state of disrepair and deterioration. Entirely new types of infrastructure, such as high-speed fiber and wireless data networks, should be developed to aid twenty-first century commerce and economic development in the same way that paved roads did two centuries ago or air transport did in the last century.
If President Obama had stuck to his original promise of enacting a stimulus plan focusing on job-creating infrastructure projects that were “shovel-ready” and just waiting for funding, he likely would have found many willing Republican allies. The result could have been a precedent-setting example of genuine bipartisanship. Instead, by abdicating his leadership role in setting the national agenda to Nancy Pelosi and Harry Reid, he will probably sign a bill that would be best described as “America’s Inflation Stimulus,” because it will be inflation, rather than job growth and infrastructure investment, that is most stimulated by it. How many months will it be before we see inflation skyrocket from its current level of around 4% to 12% or more? The last time we saw an inflation rate that high was in 1980, and it was a major contributor to President Jimmy Carter’s defeat by Ronald Reagan.
The proposed package of pork is the largest spending bill in American history. Expressed in current dollars, it is roughly double the size of the entire New Deal, much of which really was infrastructure spending. It is likely to garner no more than a handful of Republican votes, largely because no Republican input was sought in the House, and only two Republican deal-making Senators were involved in reaching the Senate compromise.
For the new President, this is a tragic waste of an historic leadership opportunity. For the rest of us, it will result in the greatest transfer of debt to a succeeding generation in the history of the world. This is not the kind of change that Obama promised.
We invite you to join us in sending a clear message to your Senators that you simply will not tolerate their voting in favor of this bill. Please click this link to go to our special online petition, which we will send to both of your state’s United States Senators before the final vote:
Take Action Now – Petition Your Senators:
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