Disapproval of Obligations Under the Emergency Economic Stabilization Act of 2008
Floor Speech
DISAPPROVAL OF OBLIGATIONS UNDER THE EMERGENCY ECONOMIC STABILIZATION ACT OF 2008 -- (House of Representatives - January 22, 2009)
Mr. Speaker, this resolution presents this House with its last chance to admit that the Bush bailout has not worked, and it will not work, because of a simple and self-evident truth: government cannot inject a single dollar into the economy that it has not first taken out of the economy. It is true that if I take a dollar from Peter and give it to bail out Paul, Paul has got one more dollar to spend; that dollar will ripple through the economy. But we forget the other half of that equation: Peter now has one less dollar to spend, meaning one less dollar to ripple through the economy. In short, it nets to zero. In fact, it nets to less than zero, because you are shifting enormous amounts of capital from investments that would have been made strictly by economic calculations to investments that are being made entirely by political calculations. We are not helping the economy with these bailouts; we are hurting it. If they actually worked, we would be now enjoying a period of unprecedented prosperity and economic expansion.
I have heard it said today, well, it is just the way that the Bush administration administered it. Well, let me pose to them this simple question: When in the entire history of civilization have such bailouts actually worked? They didn't work in Japan in the 1990s, they didn't work in America in the 1930s, and they aren't working today.
Fortunately, we know what does work. Reductions in marginal tax rates and reductions in taxes on investment consistently do stimulate the economy. They worked when John F. Kennedy used them in the early 1960s, they worked when Ronald Reagan used them in the early 1980s. When taxes are reduced on productivity, productivity increases. But how typical of government to resist what we know works and embrace what we know doesn't work.
This resolution offers the House one last fleeting chance to admit its mistakes, to step away from rigid adherence to failed policy, and to offer the change that the people of this Nation deserve.
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