By William Haupt III | The Center Square
“What conservatives are opposed to is needless and
excessive spending, pork-barrel spending, deficit spending, and spending to
pick winners and losers among Americans.”
– Barry Loudermilk
America’s free markets have a long history of improving
the economy far better than government. The problem with stimulus bills is they
stimulate too much “unrelated spending” and too little “real spending” to help
the economy. And voters condone this as long as they get their piece of the
pie.
In 1790 during our first Congress, the Senate was
deadlocked on approving the bill to finance the federal government. George
Thatcher of Massachusetts told Congress if they included a provision to
allocate $1,500 to build a lighthouse in Maine he’d lobby enough votes to pass
the budget bill. And that was the first piece of pork fat added to a federal
finance stew to make it more palatable.
The phrase pork-barrel rooted in the antebellum period when slave owners gave barrels of salted pork to slaves to fight over and share.
In 1863, Edward Hale used the term to describe government spending,
which attached the phrase to politics. After the Civil War, when Congress added
money to bills for pet political Reconstruction projects, pork-barreling became
the leach it is today.
In the past two decades, in response to financial crises,
government has increased spending and utilized stimulus checks to jump start
economic growth. The devil that lurks within this measure of “stimulus” is the
billions in unrelated pork projects embedded in these bills. With Biden’s
grandiose “so-called” stimulus wish-list looming, taxpayers wonder how did we
get into this mess? Because:
“Too many politicians believe to get elected to office,
they must dispense benefits.”
– James Cook
Before the Great Depression, the government did little to
influence economic growth. But President Franklin D. Roosevelt abandoned
laissez-faire economics in favor of aggressive federal control of the economy.
FDR’s policies backfired and handcuffed the free market, prolonging the
Depression until World War II.
It took a war to reinvent the economy and reemploy
America after a decade of FDR’s fiscal follies.
After WWII, throughout the century the government found
inventive ways to rally the free markets with tax cuts and manipulative
spending. Some worked and some didn’t. Ronald Reagan inherited 10% inflation
and unemployment from Jimmy Carter in the 1970s. And by the time he left
office, his effective use of tax cuts and budget reforms cut inflation and
unemployment to a measly 3%.
“The American people are not undertaxed; the government
in Washington is overfed.”
– Ronald Reagan
Barack Obama set a precedent passing the American
Recovery and Reinvestment Act during the 2009 recession. Those on federal
programs received $250 and he reduced withholding taxes for others. Billions
were given to infrastructure, green energy, health care, education, science and
aid. Unemployment was 8% at the time and four years and $825 billion later,
unemployment was 8%?
Census data revealed nobody found “shovel ready” jobs;
1.1 million people totally gave up looking for work, poverty increased by 6.3
million and child poverty grew to a new high of 22%. The $35.2 billion given to
green energy plants only created “red ink” because they could not run on green
fuel. But the ARRA was successful at one thing: It stimulated enough votes to
reelect Obama in 2012.
“The number one thing … facing the middle class … is a
three-letter word: …J-O-B-S."
– Joe Biden
In 2020 when U.S. House Speaker Nancy Pelosi passed her
House version of the CARES Act, it was loaded with pork. It would have mandated
diversity on corporate boards, required airlines to reduce emissions, mandated
mail-in voting, increased unionization, bailed out private pensions, required colleges
to educate illegal aliens for free, gave gigantic grants to green energy
companies, and granted checks to prisoners.
But when Pelosi’s bill arrived at the Senate, it was DOA
and the Senate rewrote her bill. She ranted that the Senate bill only favored
business. But CBO data shows the Senate bill helped both citizens and
businesses survive.
“As long as you're going to be thinking anyway, think
big.”
– Donald Trump
When Biden told the Senate he intended to move forward on
his pandemic relief bill with no input from Republicans, the Senate approved
his inflated budget bill without one GOP vote. And Biden showed the GOP he was
the boss! His bill is a leftist Christmas gift that includes more pork than
there is in any sausage factory. U.S. Sen. Mitch McConnell retorted, “Biden
used his phony budget bill to ram through a stimulus package that every
Democrat in Congress should be ashamed of!”
Democrats blocked Republican amendments to stop a federal
tax on carbon, to cut aide to schools refusing to reopen, to cut off stimulus
to prison inmates, outlaw court packing, reopen the Keystone pipeline, and to
block checks for illegal immigrants. And the GOP was unable to cut back the
outrageous amount of money gifted to leftist special interests that was taken
directly from private businesses.
The Bookings Institute claims Obama’s stimulus attempt
spent too much on special interests and too little to benefit the economy. It
was nothing more than political showmanship to impress voters.
In contrast, the CARES Act reduced unemployment to 6.7%
and gave people more money to boost the economy.
“Sometimes your best investments are the ones you don't
make.”
– Donald Trump
A CNN poll taken before Obama’s 2012 reelection showed
voters thought more of him than they did his stimulus bill. Obama got a thumbs
up of 76%. But they gave the ARRA a thumbs down of 54%. Half of them said they
saw only moderate benefit from the ARRA and 47% claimed it did not help them or
the economy. And the majority couldn’t name one infrastructure project it
financed.
Milton Friedman told us, “All economic problems can be
cured with capital.” Economies go belly up when there is a shortage of
investment capital and disposable income. Therefore it takes an influx of
capital to refuel their engines. And the political fix to inject more capital
into an economy is to return tax money they took from states with pork
attached; calling it a grant, or a stimulus check?
“The government solution to a problem is usually as bad
as the problem.”
– Milton Friedman
When the pandemic hit, economists predicted a second
Great Depression. But they did not factor in the Trump tax cuts and an economy
flush with capital. Although some pork was hidden in the CARES Act, more money
went directly to the people and industry, which prevented a long-term
depression.
Biden’s stimulus plan is Obama’s ARRA on steroids, and
does little to stimulate economic growth since most of this is “spending”
rather than “investing” to generate growth. It contradicts all proven economic
logic; to jumpstart an economy you invest in free markets and allow them to
self-correct on their own. Giving politicians economic power is as stupid as
hiring a thief as a bank guard.
“The Great Depression, like most other periods of severe
unemployment, was produced by government mismanagement rather than by any
inherent instability of the private economy.”
– Milton Friedman
