PrezBo's departing economic dogwasher Christina Romer got it half right. In a farewell speech yesterday, she pointed to the fact that we need less taxes. So NOW she admits that reducing taxes on achievers encourages them to crank it up a notch or two. At a time when we are trying to get our economy moving again, taxing productivity is the last thing we want. Hopefully she had a little one-on-one with Obama .. maybe even some flashcards or something .. to explain this point. But then she went on to say that we need more government spending.
Huh? Romer says that Washington needs to move forward on policies that will cut taxes and increase government spending. Would Ms. Romer care to share with us just where the government should get all this extra money to spend? Did she happen to read the reports from the Census Bureau that were released this week? If she did, she would have discovered that federal domestic spending increased a record 16% in 2009. Just one year of domestic spending .. an increase of 16% to $3.2 trillion. This was the biggest increase in spending since the Census Bureau started collecting data in 1983. So where is all of our money going? Entitlements. Almost one half of all federal spending (46% to be precise) went to Medicare, Medicaid and Social Security. Read that again - almost half of all the money our federal government spends go toward these entitlement programs. Spending on unemployment compensation more than doubled from 2008 to 2009, costing $86 billion.
Oh and you will love this. What parts of the country are benefiting the most from this increase in spending? You guessed it - Washington DC. Among all 50 states, per capita spending averaged about $10,000. However, DC's per capita spending averaged more than $83,000. This is what you get when you have a party of government running the show. Everything surrounding their imperial federal government will flourish and be funded by your earnings, and what do you have to show for it? An unemployment that hovers around 10%. In fact when the figures are released tomorrow, the unemployment rate is predicted to rise to 9.6%.
So you just read all of the facts and figures, and yet PrezBo's departing economic dogwasher says that we need more spending? What is it with these people that they seem to universally agree that a dollar spent by government is so much more important to our economy than a dollar spent by the person who actually earned it? I've pointed you to this study before, but it is pertinent now more than ever. The Heritage Foundation: Why Government Spending Does Not Stimulate Economic Growth: Answering the Critics. Here are just a few examples of how government can't spend its way to prosperity:
- During the 1930s, New Deal lawmakers doubled federal spending--yet unemployment remained above 20 percent until World War II.
- Japan responded to a 1990 recession by passing 10 stimulus spending bills over 8 years (building the largest national debt in the industrialized world)--yet its economy remained stagnant.
- In 2001, President Bush responded to a recession by "injecting" tax rebates into the economy. The economy did not respond until two years later, when tax rate reductions were implemented.
- In 2008, President Bush tried to head off the current recession with another round of tax rebates. The recession continued to worsen.
- Now, the most recent $787 billion stimulus bill was intended to keep the unemployment rate from exceeding 8 percent. In November 2009, it topped 10 percent.
The likelihood of the Democrats falling out of love with government is about as likely as me having a chance with Angelina Jolie. We can't change their minds, but we can kick them out of office. November, folks. Be there.