The House Passes H.R. 2454, The Economic Destruction Act Of 2009

Today the United States House of Representatives passed H.R. 2454, the American Clean Energy and Security Act. The mammoth bill consisted of more than 1500 pages and would be more aptly named the Hamstring the American Economy Act. The bill will now head to the Senate for their take on the issue, where I cannot help but wonder if the Senators will actually read the bill before reading it unlike their counterparts in the House.

President Obama and the Democratic House leadership claimed that this bill was a “jobs” bill. Their claim is based on the premise that the legislation will create green jobs and will help the economy. The dirty little secret is that the cost of the bill to the American taxpayers will be astronomical. Everyone will pay more for their energy consumption. This may not appear to be that big of an issue for the millionaire bureaucrats in Washington or the hypocrite Al Gore, but for those citizens who already struggle to pay their energy bills on a monthly basis, it will be a major problem. Over the next 25 years electricity rates will increase an estimated 90%, gasoline prices will increase an estimated 58%, natural gas rates will increase an estimated 55%, add an additional $28,728 per person in the U.S. to the national debt, and reduce the gross domestic product by $9.4 trillion

As for the jobs that they are claiming that will be created, we only have to look to Spain to foresee the outcomes of the very same policies. In Spain the unemployment rate is at 18% and for every green job created 2.2 jobs are lost. The cost of creating the green jobs is a bargain as well, a mere $774,000 per green job “created”. Gabriel Calzada, an economics professor at King Juan Carlos University who authored a report on Spain’s green jobs initiatives said, “The loss of jobs could be greater if you account for the amount of lost industry that moves out of the country due to higher energy prices”. Several U.S companies have already stated that it will be cheaper for them to move their entire operations out of the U.S. than to stay and pay the stifling taxes and penalties for doing business in the Obama led United States.

What I find most amazing about this legislation is the unmitigated gall of the President concerning its inevitable outcome. During his campaign, before the he became the media-anointed messiah of all people, the President said that his clean energy proposal would bankrupt the coal industry. This may not seem to be that big of a deal for most of my “green” readers, but the U.S. depends on coal to supply roughly 50% of our energy. Now how will we supply energy without coal? We could use nuclear power; you remember the cheap, reliable energy source that the President favors for Iran. The only problem is that the very same people who are trying to hamper our economy with this legislation are also the same hypocritical bureaucrats that have prevented any new nuclear power plants from being built in the past 30 years.

While the concept of wind and solar energy providing all of our energy needs is a laudable one, the simple fact remains that the technology does not exist today to make these economically viable. Provide funding for research if you want, but do not punish the American people and our economy for the sake of flawed science. As the Senate takes up this legislation, we can only hope that the Senators will put aside their party loyalty and actually vote to protect the American economy and our pocketbooks. I realize that this may be too much to ask for many of the lifelong politicians, but can’t we at least expect them to read the bill before they vote on it? After all, the author of the bill in the House, Henry Waxman, admitted that he had not read the bill and did not know all of the details of the bill. He was content to rely on the scientists that wrote the bill. I suppose the only ones that will be laughing and cheering about this legislation in the years to come will be China, India, and the rest of the world who will reap the economic rewards for the folly of our elected officials.

Rookie Mistakes By An Inexperienced Politician

As I begin to write this week’s article, I can already hear the cacophonous cries from my left leaning friends that we just need to give the new President a chance, a chance for his policies to work, a chance for him to show the world how he will lead. After all, he has only been in office about 45 days. How could we possibly know what direction he will take our country?

If we look at what he has accomplished over the past 45 days it provides part of the picture. He has pushed through an earmark laden $800 billion “stimulus” package, all the while claiming that there were no earmarks in the bill. He has nominated several tax cheats to high-level cabinet positions, including the current Treasury Secretary. His administration has attacked members of the media who have questioned his policies. They have thrown money at virtually every area of government with the promise that this will fix the economy, while claiming that they will control spending.

If we examine what he has proposed the picture becomes a bit clearer. He has proposed the largest increase in spending in the form of a federal budget at the cost of $4 trillion. He is proposing a government take over of the health care system. He is proposing drastic cuts in funding for our military and the research programs that help keep them alive. He has proposed to end the development of any type of missile defense system to prod Russia into working to end Iran’s nuclear ambitions; after all, Vladimir Putin is exuding honor and trust.

Finally an inspection of the results of his accomplishments and proposals will bring the entire picture into focus. The President has said that he does not pay any attention to the “gyrations” of the stock market. His belief is that it is akin to a daily tracking poll. If that is the case, a drop of more than 33% since the election should show weakening confidence in his administration’s ability to lead us out of this recession. I know he has only been in office since January, but investors are not going to invest in the stock market if they are not confident that the government will stay out of the way of the private sector. Every company that the government has “bailed” out is doing worse now than before the government opened their coffers to “help”. Citibank, GM, and AIG, to name but a few, have all seen a continual slide since the government stepped in to help. Obama and his team believe that we need to continue down the same failed road.

In the past 45 days, Obama has shown his true liberal colors in the form of spending like a drunken sailor on a 24-hour shore liberty. Along the way he has even managed to disrespect our closest ally. When a foreign leader visits the White House for the first time after a new President is inaugurated, the 2 leaders exchange gifts that portray a mutual respect. When British Prime Minister Gordon Brown visited the White House, he brought with him a first edition biography of Winston Churchill and a penholder made from the timbers of the HMS Resolute, the same timbers from which the desk in the Oval Office was made. Obama’s gift to Brown was a set of 25 DVD’s of Classic movies. This is on top of returning a bust of Winston Churchill that was presented to President Bush by the British government after the September 11 attacks in 2001.

It has been a fast and furious 6 weeks since the transition of power took place and the pace at which the new administration has spent taxpayer money and destroyed wealth has taken many by surprise. Now that the true socialist colors have been shown, many of his one-time supporters are starting to protest. The question is, will there be any economy to turn around by the time the full effect of the failure of his policies is known?

The Return Of The Politics Of Fear

As the debate over the massive spending bill heats up in the Senate, the outrageous rhetoric has stooped to new lows. The $800 billion “stimulus” package that the Democrats pushed through the House of Representatives has continued to expand to more than $900 billion. Instead of fulfilling the promise of “trimming the fat” from government, Senate Majority Leader Harry Reid has overseen the addition of even more pork to already bloated spending bill.

A Rasmussen poll taken this week showed that public support for the bill has shifted dramatically over the past 2 weeks. 2 weeks ago 45% of the public favored the plan compared to 34% opposed to the plan. Now a mere 37% support the measure with 43% firmly opposed to spending billions of taxpayer money on frivolous pet projects that will do nothing to stimulate the economy.

Talk radio and Internet bloggers have combed through the proposal and highlighted numerous line items that the politicians have had much difficulty trying to justify the billions pledged. The American public clogged the phone lines at the Capitol this week voicing their displeasure over the enormity of the spending bill. The reaction to this measure is reminiscent of the Comprehensive Immigration Reform Act of the summer of 2007. As you may recall, the Senate attempted to just push the bill through with very little debate or public scrutiny. The public outcry over the immigration bill doomed it to an early grave.

As public opinion over the “stimulus” plan has soured, the administration and congressional leaders have come out to try to scare the populace into supporting it. House Speaker Nancy Pelosi claimed this week that for every month that they do not pass their “stimulus” package, 500 million Americans would lose their jobs. That number is staggering, especially considering that the U.S. Census bureau projected the U.S. population on New Years Day to be about 305 million. I know that she misspoke, but she said it at least 3 separate times. Surely someone on the Speaker’s staff could have corrected her after the first gaffe. President Obama made the rounds to the network news shows to try to sell the need to pass the proposal now. He even claimed that if the Congress did not pass the bill now, “we may never recover”. The proponents of the massive waste of taxpayer money claim that this is the worst economy since the Great Depression. The trouble is that they are obviously lying. The economy during the Jimmy Carter presidency was by leaps and bounds much worse than it is now. We had double-digit national unemployment and interest rates. Of course, if we continue down this foolish road of frivolous spending we will surely see the return of malaise.

A stimulus bill is needed to turn our sluggish economy around, but it needs to be a measure that will put more of our own money back in our pockets. It should not be a bill that steals more of our money to fund the pet projects of politicians. Action just for the sake of action is folly. I believe that this current bill should be defeated in it’s entirety and Congress should start over with more focus on actual economic stimulus vice more unnecessary spending.

Why Not A Tax Holiday, Instead Of Another Bailout?

The CEO’s of the big three automakers arrived in Washington to continue to beg for billions of taxpayer dollars to help bail them out of their financial woes. At the same time, House Speaker Nancy Pelosi has started talking about another $500 billion “stimulus” package. Cities and states are lining up on Capitol Hill with their hands out claiming that financial ruin is on the horizon without a federal government bailout. Secretary Paulson seems eager to hand out billions, if not trillions, more to any and all corporate takers. By some accounts, the bailout promises of Paulson and Bernanke total $7.7 trillion. It amazes me that very few appear to be asking the obvious question; who is going to pay all of this back?

At least one congressman is appalled by the bailout frenzy that has gripped Washington of late. Texas Representative Louie Gohmert has come up with a cheaper alternative. Gohmert has proposed two options. The first proposal is to make it so no one pays any income tax for 2008. Any income tax that has already been collected would be returned to the taxpayer and they would not pay any income tax for the rest of the year. Gohmert says in his press release, "My idea may sound unconventional, but it is trillions of dollars cheaper than our current course. My proposal actually relies on our nation's founding democratic principles that made us the greatest nation in the world before anyone ever heard of Mr. Henry Paulson!" Gohmert’s philosophy is simple. Why not give the money directly to the consumers who could use it to buy a new car, pay off credit cards, catch up on a mortgage, or make a down payment on a house? We are not talking about a stimulus check of $1000; this would be several thousand dollars for each taxpayer. The estimated tax revenues for 2008 are $1.2 trillion. Contrast that with the promised bailouts of $7.7 trillion, which plan would make more sense?

The Congressman’s second proposal is a bit more realistic. He proposes that we take the $350 billion already allocated for the financial bailout but not yet used, and give everyone a tax holiday for January and February 2009. This would not just be income tax, but also FICA. No one would pay federal income tax or FICA for January and February. Take a gander at your pay stub and calculate how much the government takes from your paycheck for federal income tax and FICA every pay period. How much more money would that inject into your personal budget? It would free up the consumers to pay down debt, make the home renovations they have been delaying, invest, or just take the family vacation that was postponed due to the economy. Surprisingly, the cost for this proposal is below the $350 billion left from the original $700 billion bailout. American Solutions, a conservative think tank, has calculated the numbers and reports that each month the federal government collects $101.6 billion in income taxes, and $65.6 billion in FICA. The 2 month total for Gohmert’s plan is $334.4 billion, a little more than $15 billion less than the Treasury Secretary’s $350 billion.

Representative Gohmert’s proposal of a tax holiday is currently building support in the House, but you can sign the petition to show support for the tax holiday here. Although I wholeheartedly support the tax holiday, I see a few reasons why this will never come to pass. First off, the congressional leadership is too eager to continue the private sector takeover to ever allow them to take control again. Secondly, there would be a tax revolt akin to the Boston Tea Party if the American public ever realized how much money the government took from them each pay period. It is one thing to see empty number on your pay stub, but to hold that money in your hand and then have the government take it away from you is quite another story. Whether or not the tax holiday ever comes to fruition, at least we have one congressman that is willing to think outside the box when it comes to the financial crisis.

Don't Let Congress Turn The Auto Industry Into Another Amtrak

Since early September, when the political elite in Washington informed us of the dire need to bailout the financial markets, we have see a building tide of industries, states, and even cities clamoring for their version of a bailout from the federal government. The “experts” in Congress promised us, that the bailout would shore up the financial markets and we would all be better off. Now that the markets have continued to drop, congressional leaders response is that we need to bailout more companies.

Representative Barney Frank was asked when the bailouts would stop and his response was as confusing as the clamor for government bailouts. Frank claimed that the bailouts would stop when they stopped working. Maybe Mr. Frank has been too busy with his reelection campaign to notice that the bailout has not worked. In fact, most economists believe that the bailout accentuated the problem. The Dow Jones Industrial Average has dropped an additional 3000 points since the bailout that was going to save us all was passed.

This week, executives from the “Big Three” automakers were on Capitol Hill to try to convince lawmakers of their need for a bailout of their own. After the hearings, congressional leaders held a press conference to explain their inability to come to any agreement on a bailout. Their explanation was what we have come to expect from Washington politicians. They shifted the blame to the automakers, not for their failing companies, but for failing to present them a plan on which they could agree. They set a date of December 2 for them to present plans for a bailout on which they could come to a consensus.

Does Congress believe that if they just throw money at the problem that the crisis will just disappear? This has become the normal routine in Washington. Whatever the problem, politicians just throw money at the problem, but don’t change any of the contributing factors that led to the problem. Look at government funded education. For years the public school system has been a breeding ground for failure or mediocrity at best. Government’s answer is to throw more money at the schools but never changing how or what they teach. Then they are surprised when the results are the same.

I realize that this may be a completely foreign concept to Congress, but since when do we reward poor business practice by giving them taxpayer money? I believe that the government should get out of the way of failing businesses. They should do whatever they can in the way of tax relief to aid in the expansion of businesses, but why should they reward those who make poor choices? I believe that after Congress throws money at the auto industry, the automakers will be in the same situation within a few short years. They need to restructure their business so that they can compete with the foreign competition. The process will be painful, but the U.S. auto industry will be better off in the long run. The taxpayers need to let the politicians know that based on their history of failures, we do not want them to meddle in the affairs of private companies.