Mass marketing – the attempt to sell an idea to a wide audience — is a term foreign to most elected Republicans. I can only assume that most of them are hoping and praying that enough Americans receive the information they need by osmosis.
If the thousands of men and women we elect on the Republican ballot line were all doing their jobs, a much higher percentage of the population would understand enough about basic economics that the Obama-Reid-Pelosi pork-laden “stimulus” bill would be seen as the mistake that it is.
There’s little disagreement that action is needed in light of the bad economy – it’s awful to see the unemployment rate climb to 7.6 percent in January. The question, as always, is what action should be taken.
Last week Congressman Kevin Brady of Texas issued a statement through the Joint Economic Committee. In the statement, Brady pointed out the following:
- The Congress is set to add more federal debt to the already large and growing burden of public debt on the economy.
- We, our children, and grandchildren will be paying for this spending spree for a long time to come.
- This “stimulus” debt is added onto 1) trillions of dollars of federal bailouts that already expose taxpayers, and 2) the looming retirement of the baby boom generation will cause entitlement spending to accelerate faster and faster in the next few years.
What Brady said next is what I believe more Americans need to hear from every elected as well as rank and file Republican in the country:
“The U.S. fiscal outlook is already undermining financial markets.”
Why our leaders don’t get into high gear quickly and make sure more people understand this problem is a continuing mystery to me. The actions of our federal government aren’t helping, they’re hurting the economy which is so dependent upon a climate where risk takers have the confidence to invest.
Here is the balance of Congressman Kevin Brady’s statement. (Emphasis was added.)
As the Financial Times reported Thursday, “…The U.S. Treasury opened the floodgates of government bond issuance yesterday…the announcement came amid fears about growing U.S. government deficits and sent the yield on the benchmark 10-year Treasury note rising to 2.95 percent… The rise in yields has been pushing 30-year mortgage rates higher, complicating efforts by U.S. authorities to revive the economy….”
The key question is whether huge federal spending increases will actually work to stimulate the economy. As economist John Taylor noted in a recent paper presented at the annual American Economic Association meetings, “there is little empirical evidence that government spending is a way to end a recession or accelerate a recovery.” It didn’t work in Japan, and there is no reason to think it will work now in the U.S. Part of the reason to doubt the effectiveness of stimulus spending is that taxpayers know that they will end up paying for the stimulus in higher future taxes and inflation, and will adjust accordingly now, undermining any stimulative effect. One study even found that “…It is thus possible for responses to expected future policies to exacerbate and prolong recessions….”
The prospect of borrowing over a trillion dollars for questionable programs thrown together with little procedural deliberation has rightly given the American people pause. Even if job creation is assumed, the cost per job has been estimated at well over $200,000, far above average taxpayer income. We do know one thing: there is an absolute certainty that the House-passed stimulus will increase deficits and debt by over $1 trillion. However, there is very little indication that it will do much to help the economy.
A much better approach would be long-term marginal tax rate reductions to improve incentives to work, save, and invest. As Christina Romer, President Obama’s chair of the Council of Economic Advisers has written, “tax cuts have very large and persistent positive output effects.”
The Republican tax package offered in the Ways and Means Committee included a number of pro-growth tax provisions. We proposed cutting the marginal income tax rates in the bottom two brackets by five percentage points, tax deduction for small business, income tax relief for taxpayers receiving unemployment benefits, and a tax incentive for qualifying home buyers. This approach offers a much better prospect for economic growth than a tidal wave of new wasteful federal spending.
This bloated spending stimulus bill is in trouble and there is still time to consider a better course of action. Instead of burdening the economy with more deficit spending and debt, let’s reduce the burden of government and improve the prospects for economic growth.
Click here to read Brady’s entire statement:
In December, the Republicans on the Joint Economic Committee (JEC) published a statement presenting an argument against the kind of legislation that has now passed both the U.S. House and U.S. Senate. I applaud the efforts of most of our GOP Congressional leaders in hanging together to oppose this wrong course. Unfortunately, few seem to understand that busy Americans aren’t visiting the JEC’s website to learn more.
A few years ago Authors Kerri Houston and Merrill Matthews Jr. wrote an excellent article in Investor’s Business Daily where they noted “all politics is marketing.” What they wrote then still applies today.
Let me pose one simple question to my fellow Illinoisans: when was the last time you saw any concerted and aggressive communication effort from our Illinois Republican Congressional delegation that didn’t involve issuing press releases that few people outside of the media read?