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charities have received between $700 million and $1 billion in response
to the terrorists attacks of September 11. This is a staggering
number and demonstrates the great compassion of the American people.
In fact, the generosity has been so boundless that many charities
are having difficulty deploying the funds. They have more money
than they know what to do with. This is because most charities don't
spend money frivolously.
Not so, Uncle Sam. The federal government has already allocated
$50 billion, roughly sixty times the amount of money that private
relief charities have received. And yet lawmakers have no trouble
finding places to spend the dough. They continue to clamor for at
least $100 billion more.
Mitch Daniels, the White House budget director, was dead on target
when he recently commented: "With a little imagination, any
straight-faced advocate can recast his pet program somewhere under
the inviting headings of war, recession, or disaster recovery."
And the feeding frenzy is not just for the $50 billion that has
already been approved. There's a parade of elephants and donkeys
lined up all the way down Pennsylvania Ave. waiting to get into
the Capitol. They have their paws out and their palms up seeking
dollars for pet projects that have nothing to do with the war. How
else do we explain a $70 billion request for Amtrak funding the
rolling tax-dollar-burning machine, or $3.5 billion for peanut farmers?
How can $2.5 billion for health insurance for unemployed workers
be an economic stimulus? This will only insure that we have more
unemployed workers. And something tells us that this new entitlement
for unemployed workers won't be "temporary." Name any
entitlement program that has been?
Ron Utt, the insightful budget analyst for the Heritage Foundation,
notes that this is the biggest request for federal dollars we have
seen in Washington in at least a decade. Utt documents in a new
study that "lobbyists are using the tragedy of September 11th
to raid American taxpayers." Even travel agents and Las Vegas
casinos want federal handouts.
Democrats on Capitol Hill say they want half of any fiscal-stimulus
plan to go to Keynesian federal spending programs. Fine. They've
already got their half. The $50 billion already approved is all
— every shiny penny of it — for federal spending. This
is why the entire stimulus bill must be dedicated to tax
cuts to ensure that half of all the post-September 11 response is
for tax cuts.
Perhaps the worst example of opportunism to promote big government
is the agriculture bill, and Republicans and Democrats are both
guilty. The bill was renamed the "Farm Security Act,"
and the farm lobby and farm congressmen pushed hard for it based
on arguments about the security of the U.S. food supply. These arguments
are ridiculous; the United States is the world's largest food exporter.
The bill not only extends subsidies that are scheduled to end in
September 2002, it massively expands farm subsidies, including a
brand new $3.5 billion support for peanuts. The total price tag
for the bill is over $170 billion in the next ten years. Senator
Lugar of Indiana, who is fighting a lonely but pro-taxpayer battle
against the giveaways in the farm bill, notes that the agriculture
budget would go up faster than the defense budget, if this expensive
legislation were approved.
During the tax fight in the House, Democrats pilloried Republicans
for passing tax cuts to "exploit the economic and national
crisis." But the people who are truly draping their self-interest
agenda around the flag are the spending parasites. More government
spending cannot possibly stimulate economic growth. If it could,
Japan, which has the fastest rate of growth of spending and deficits
of any country in the world over the past decade, would be celebrating
unprecedented prosperity, not her 11th year of depression.
Nobel Prize winner Milton Friedman is perhaps most famous for reminding
us that "there ain't no such thing as a free lunch." The
money to pay for the government spending doesn't fall out of Heaven.
The government spending is either financed through higher taxes,
higher federal borrowing, or by printing money. But all of these
financing mechanisms depress the economy at least as much as the
new spending stimulates it. Government taxes reduce consumer and
business investment and spending. Government borrowing increases
interest rates (or so we are told by Robert Rubin). Printing dollars
causes inflation and therefore makes every dollar that we all hold
in our pockets worth less in purchasing power. In other words, all
these financing techniques make private citizens poorer, so how
can the government spending make us richer?
The Republicans, of course, are guilty of running up the budget
themselves. But what are we to make of the truly loony ideas that
reign as economic "thinking" on the part of the Democrats?
The Democratic "stimulus" plan would spend another $40
billion this year on domestic programs and finance that funding
by raising taxes on the rich by increasing income-tax rates. In
other words, this plan takes money from wealth producers and redistributes
the money to nonwealth producers and the idea is that this scheme
is supposed to create wealth and prosperity. It reduces incentives
to work and therefore is supposed to create jobs. It makes the return
on capital spending lower and therefore is expected to increase
capital spending. Neither of us have a PhD in economics, so we confess
that the sophisticated logic here eludes us. But if someone out
there does get it, we want to be educated.
If in the name of bipartisanship, the White House allows Tom Daschle
and Dick Gephardt to pass a stimulus bill that grows the government
but not the private sector, then our nation would be much better
off with no stimulus bill at all. If this turns out to be the case,
pro-growth Republicans must vote no.
If freedom, trade, lower tax rates, and private charity cannot repair
the damage caused by the attacks — nothing else will.
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