The State of the Economy

THE STATE OF THE ECONOMY -- (House of Representatives - January 16, 2008)

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Mr. WELCH of Vermont. Thank you. I have been listening, partly presiding, but I have been thinking about this question of why is it there is such a sense that we need to do something called a stimulus package, where we are talking about $100 billion going into an economy that is $14 trillion, and it's a modest amount. Why is it that there is such a sense that this stimulus is needed when in fact, by historical standards, unemployment is actually relatively low. We had bad news. It went from 4.7 to 5 percent. But the historical average is well above 5 percent.

The reason there is such anxiety is the reasons my friend from Kentucky and all of you have mentioned, that this has not been a rising tide that lifts all boats. Most people, even those who are employed, have not had wages that have come close to keeping up with their bills, and that has been intensified, of course, with energy, buying gas, buying home heating fuel, paying for your college education for your kids, and medical bills. The story that the Speaker told about that young family with medical bills is painful, but it's true. So what you have had is this economy that is simply not working for average people.

So what do we have an opportunity to do? A stimulus package is something that is concrete. We don't offer it as something that is going to ``solve'' the problem, but it is going to show that there's a cop on the beat. And there is an opportunity, by following the advice of economists across the spectrum, from conservative to liberal, that say that in a time of declining incomes, a stimulus is a mainstream Keynesian approach to giving a shot in the arm to the economy and a boost in confidence.

Now, we do that and do it quickly, hopefully in the next 2 weeks, and we do it together with our colleagues. It's a statement of confidence, and it also, by the way, establishes that where you need to help is with those folks who are paying their bills on the basis of their salary or punching a clock. Then we have the longer term work to do, and that is to right the inequities that have been so systemically applied to have this vast spread between the middle class, low-income folks, and everyone else. It's all these things people have been talking about, credit card abuse, this scheme that was cooked up by Wall Street and others on the subprime mortgage, and even the so-called exceptional mortgages that are below subprime, the way that Wall Street has found to package these and then sell them to, in some cases, unsuspecting buyers, and in some cases, to knowledgeable buyers who thought they could make money; the degradation of any kind of regulatory oversight, when regulatory oversight done right is going to protect average people. The chairman of Financial Services, I think, put it right on regulation. There's only two problems; one is when you do too much, and the other is when you do none at all. It is something that has to be done in order to protect the pocketbooks of everyday Americans.

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