I was talking to a friend of mine who runs a small bookstore. Like most small business owners recently, he has seen a drop in business and profit and was looking for suggestions. So I gave him one.
“Why don’t you just borrow a bunch of money from your personal account and buy your own books? Your sales will go up, your quarterly reports will look better, and you’ll have a renewed confidence.”
Seem ignorant? Tell that to your new president and his Democrat allies in Congress, since that is exactly the plan they have developed for healing our economic woes. Somehow they have concluded that the solution to a problem created by irresponsible government borrowing and spending is more government borrowing and spending. If they are correct, it will be the first time in history a country has ever borrowed and taxed its way out of a recession. But nevertheless, they will soon be taking nearly a trillion dollars out of the economy to then turn around and reinvest in the same economy.
The incoherence became evident early on when President Obama falsely proclaimed that, “only government can break the vicious cycles that are crippling our economy.” That might be true if it weren’t for the fact that those vicious cycles are government created, government regulated, government subsidized, and government perpetuated.
Common sense dictates that the only thing capable of reviving the American economy is the engine of the American economy: the marketplace. Therefore, if our President really wanted to live up to his messianic aspirations and “solve” this problem, he needed to do two things, and he needed to prevent two things.
First, he needed to call on Congress to make the Bush tax cuts permanent and propose further, deeper cuts. The more of their own money that people are allowed to keep, the more likely those dollars are going to be spent. That’s a good thing for the economy. But instead, the president has stated his intent to let the tax cuts expire in 2010, dramatically raising the tax burden on every American.
Second, he needed to demand the slashing of corporate tax rates. The less it costs someone to start a business here, the more likely they are to do so, thus providing new jobs, wages, and income. That also is a good thing for the economy. But instead, President Obama has signaled his intent to allow Europe to woo entrepreneurs with a 20% corporate tax rate while ours sits near 35%.
While taking those proactive steps (neither of which evidently crossed his mind), the President should have also used his power to prevent two growth-stifling realities. One, stop power hungry politicians in Congress from loading up the recovery bill with needless spending. The last thing the country needs in the midst of economic turmoil is wasteful pork projects.
Seemingly President Obama understood this, stating recently in Elkhart, IN, “There aren't individual pork projects that members of Congress are putting into this bill.” Of course that was right before he mentioned that the bill would help residents there build an overpass in their city. An overpass would probably be nice, but is it essential for American economic recovery? And what about the $255 million set aside for a “polar icebreaker?” And while we’re at it, how will giving $50 million to the National Endowment for the Arts (the same group that helped fund the urine-soaked Jesus “art” a few years ago) spare us from economic ruin?
And two, he needed to avoid further saturating future generations with this generation’s debt. Just like with pork projects, the president initially seemed to grasp this concept. In the third presidential debate he said, “We need to eliminate a whole host of programs that don’t work,” and reassured us that his proposals represented “a net spending cut.” But now in the first 100 days of his presidency, Obama is seeking to borrow and spend nearly one trillion dollars. Keep in mind that with any borrowing of money comes the stipulation that it will be paid back with interest…something our grandchildren will get to enjoy.
The truth is I don’t really have a friend in the book business. But if I did, he would have been well advised to mark me off his list of economic advisers. We would be well served to do the same with our new President, and his fellow ‘borrow and spend’ Democrats.
Peter W. Heck
