January 28, 2009
By Ernest Istook
The proposed Obama-Pelosi "economic stimulus" would end the era
of merely big government and replace it with leviathan
"It'll never go away," says Sen. Tom Coburn (R-Okla.), calling
the plan "a permanent increase at a time when we are in the worst
financial shape we've ever been in." He adds, "None of this is
going to stimulate anything."
However, President Barack Obama says size doesn't matter. As he
said at his inaugural, "The question we ask today is not whether
our government is too big or too small, but whether it works."
We should also ask whether it's Constitutional, whether the plan
is being sold with false advertising, and whether we can afford
It would require our Treasury to borrow record levels of money
from overseas, perhaps more than the world is willing to lend us.
It might double our $1.3-trillion deficit that now makes us more
dependent on China than any other country.
Since Obama has pledged to root out "unnecessary spending," then
why not start with this "stimulus" bill? Even Sen. Kent Conrad
(D-N.D.), the Senate Budget Chairman, notes that the $825 billion
package at best would reduce unemployment rate by "maybe" 1 percent
-- far less than Obama's extravagant claims.
The president's radio address last weekend told us only what he
wanted us to know -- which means he never mentioned the cost.
Pollsters have told Obama and fellow Democrats to describe their
plans as "bold" but never to mention the price tag. So much for
That $825-billion figure -- all borrowed money -- also
fails to include the interest that must be paid, which will push
the total price tag over $1.1-trillion.
Those who look beneath the pile of proposed new debt won't find
a pony, but they will find many false claims:
A better plan would be the genuine stimulus of tax reforms such as The Heritage Foundation has proposed,
more than once. Unfortunately, most of what the
"stimulus plan" deceptively labels as "tax cuts" is actually sending government checks to millions of people who
don't pay income taxes.
If enacted, the Obama/Congressional proposal may exhaust
America's ability to borrow. It certainly will increase our
dependency on foreign money.
Foreign borrowing by the U.S. Treasury has soared in the past
year. The latest Treasury Department numbers (November) show
China's holdings in our national debt are up to $682 billion from
$459 billion in the prior 12 months. Japanese holdings declined
slightly, but still are $577 billion. England's share of American
pie climbed from $170 billion to $360 billion. Oil exporters such
as the Mid East and Venezuela upped their holdings from $139
billion to $198 billion. Russia's skyrocketed from $33 billion to
$78 billion. And foreigners who use Caribbean banks for secrecy
raised their stake from $108 billion to $220 billion.
How much more can we borrow before our creditors cut us off, or
our Treasury securities become junk bonds that must pay exorbitant
If Uncle Sam borrowed this $825-billion "stimulus" cash from his
own citizens, each household would have to fork over more than
$10,000 right away as the price of his help. That would spark
outrage. It also would illustrate the absurdity of claiming that
government borrowing is a stimulus.
Sadly, the misnamed "stimulus" package is a prelude to more
record spending to come. Other massive spending bills are in the
pipeline for action by Congress within the next couple of months,
to add trillions atop trillions.
Unfortunately, rather than recognizing that big government is
the problem, those who now run Washington have an notion that
government technocrats are smarter than the free enterprise
But we should never forget that America's economic meltdown was
prompted by government meddling, creating a quota system that
required home mortgage lenders to issue sub-standard loans (see
Big-government Fingerprints on Murder Weapon). When those
collapsed, the housing market tumbled and took the financial
markets and everything else down with it.
Politicians at least should be honest about the cost, and that
our children and grandchildren will be asked to pay it. Instead,
the public is being told about the price tag, "If you have to ask,
you can't afford it."
That's an excellent reason not to buy.
Istook is recovering from serving 14 years in Congress and
is now a distinguished fellow at The Heritage Foundation.
First Appeared in Human Events
The proposed Obama-Pelosi "economic stimulus" would end the era of merely big government and replace it with leviathan government. "It'll never go away," says Sen. Tom Coburn (R-Okla.), calling the plan "a permanent increase at a time when we are in the worst financial shape we've ever been in." He adds, "None of this is going to stimulate anything."
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