The Road To Prosperity
The New Year has just arrived and President-elect Barack Obama and the Democrat-controlled Congress have already begun constructing a plan to spend more of your money in 2009. They are calling it a stimulus, but it sounds a lot more like a combination of corporate handouts and government jobs programs.
A few weeks ago, they said the package would be $500 billion. It has already grown to $850 billion in the first year and about $1 trillion over a few years. As the package grows, American families find themselves drowning deeper and deeper in debt.
Since word of the stimulus, lobbyists have been lining up to get a share of the goods for their clients. Local governments, looking to balance their own budgets on the federal dime, are in the queue, too. The U.S. Conference of Mayors recently released a massive list of local projects they wish to be funded, including $500,000 for limestone sidewalks and bike lanes, $400,000 for a skateboard park and $11 million for a cultural arts center. Some of the projects on their wish list might be truly important. But do they supersede the need to control federal spending? Taxpayers should not be forced to tighten their belts while government goes on a spending spree.
In this stimulus, Mr. Obama is also calling for the largest new investment in our national infrastructure since the creation of the federal highway system in the 1950s. The need for rebuilding and refurbishing infrastructure, like bridges and highways, is real. And a smart and targeted investment in infrastructure would help to shore up the construction industry with jobs, at least in the short-term. While this may seem like a silver bullet creating jobs and rebuilding roads all at the same time, in the long-run, this is more like the perfect storm than the perfect answer.
Someone has to pay for all of this whether it's today's taxpayers or their children and grandchildren. There comes a time when government simply cannot provide enough government jobs to bolster the economy. There comes a time when the taxpayers' burden to pay for all of the projects is too heavy to carry. With the trillions in bailouts and stimulus packages that have already been passed and that are in the works, that time may be sooner than we think.
Government should not take on the role of creating the jobs and buying the goods. Government should be in the business of establishing an environment in which businesses can thrive and play those roles themselves.
Americans need a stimulus proposal that actually stimulates the economy. Economists are in near unanimous agreement that too large an infusion of government into the economy slows growth, raises interest rates, and makes tax increases and spending cuts a near certainty. With the federal share of the nation's economic activity at nearly one in every four dollars, the highest rate since World War II, do we really need to debate whether our infusion has reached the point of too large? Cutting taxes and empowering small businesses to flourish is a surefire way to stimulate economic growth. Letting taxpayers keep more of their hard-earned money for the purchases of their choice is what makes the economy thrive.
I am a cosponsor of a real economic stimulus package, the Economic Growth Act, which actually promotes growth and protects our nation's jobs. The Economic Growth Act is a commonsense plan that would reduce the corporate income tax rate from 35 percent to 25 percent, a rate that is closer to our European competitors; index capital gains to inflation; and simplify the capital gains tax to free up capital for investing. Government would do well to learn to live by the age-old adage of giving a hand up instead of a hand out.
Washington has become far too glib in the way it spends hard-earned taxpayer dollars. Since coming to Congress, I have seen every corporate and organizational Tom, Dick and Harry hold out their tin cups, begging for billions from America's taxpayers. And Congress shows little willpower in prioritizing their requests. Washington's addictive spending mentality is breaking the backs of our nation's middle class.
Congress needs to jump-start the economy and that begins with the strength of our nation - the taxpayers. The road to prosperity winds past storefronts on Main Street, not the halls of the U.S. Capitol.