[Congressional Record Volume 141, Number 103 (Thursday, June 22, 1995)]
[House]
[Page H6258]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                          SIGNS OF A RECESSION

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Tennessee [Mr. Duncan] is recognized for 5 minutes.
  Mr. DUNCAN. Mr. Speaker, yesterday, the front page of the New York 
Times reported that some members of the Federal Reserve Board ``have 
publicly expressed concern that the economy is now in considerably 
worse shape than they had expected.''
  Two days ago, Washington Post columnist James K. Glassman wrote: 
``Don't look now, but the recession may already have started.''
  Mr. Glassman wrote that the White House is going to try to convince 
voters that this is a Gingrich recession, but then he says this:

       Such a charge, of course, is nonsense, and it's 
     hypocritical coming from a President whose budget plan isn't 
     so different from that of his adversaries.

  Are we in a recession now? Well, the economy lost 101,000 jobs in 
May. Single family housing starts are at a 2-year low. Unsold 
inventories have, in the words of the New York Times, risen sharply.
  According to Bridgewater Associates, a respected Connecticut firm 
that measures the economy, retail sales are wretched and second quarter 
GDP growth is about minus 0.5 percent.
  I have spoken at least twice on this Floor about our tremendous 
problem of underemployment.
  If you talk to any of these college graduates who can only find work 
in fast food outlets or restaurants, if they can find jobs at all, then 
you would know what I mean. I am sure they would say we are in a 
recession.
  Like all recessions, though, the average consumer will not notice the 
full effects of this one until several months after it starts.
  Thus most people will not notice this one, according to most 
economists, until very late this year, but really more probably a few 
months into 1996.
  What is the cause of this new recession, or if not a recession, at 
least this severe slowdown?
  Well, I think most people would agree that our obscene national debt 
of almost $5 trillion and our continuing deficits, or losses, of almost 
$1 billion a day, are the main problems.
  Congressman Armey, a PhD economist, says the fault lies with the huge 
tax increase passed by President Clinton and the Democratic Congress in 
1993.
  Lending credence to this view is John Mueller, chief economist for 
Lehrman Bell Mueller Cannon, Inc. The columnist Glassman says Mueller 
believes there is a lag time of 2 years between actions of the Federal 
Reserve Board and their effects.
  There is also a similar lag time with most major legislation passed 
by the Congress, too.
  Anyone who blames a recession or economic slowdown in the next year 
or so on Republicans in Congress is either forgetting or ignoring the 
obvious.
  First, most of the real changes passed by the House have not been 
passed by the Senate or have not been signed by the President. Most of 
the actions by the House have not even yet taken effect or actually 
gone into law.
  Second, despite all the publicity about so-called spending cuts, none 
of these will go into effect until the next fiscal year begins in 
October.
  Even then, the cuts do not exceed the growth in some programs, and 
thus overall Federal spending continues to go up and will do so every 
year under the
 most conservative budget that has been proposed.

  Obviously our economy is on thin ice. So, what should we do?
  First, we need to drastically reduce the Federal regulatory burden. 
The most conservative estimates are that Federal regulations now cost 
our economy approximately $500 billion each year.
  Second, we need to bring Federal spending under control, cut our 
losses completely, and even start paying off our national debt is the 
only way to really help the economy, and that is with uninflated 
dollars.
  It is ridiculous that we cannot even balance our budget until seven 
years from now, at the least. If we balanced the budget right now, we 
would still be spending over $1\1/2\ trillion by just our Federal 
Government this year. We would not have a lean government, we would 
still have a fat, sassy government. A strong, active, vibrant 
government is what we should have for that kind of spending.
  Third, we need to overhaul, and greatly simplify and reform our 
federal tax code. We should greatly downsize and decrease the power and 
cost of the IRS.
  It is just crazy that our Federal tax laws are so complicated and 
convoluted. I am told that we waste at least $200 billion a year in 
time lost and expense incurred in IRS compliance costs, keeping 
records, filling out forms, and so forth.
  Finally, we need to lower taxes at all levels. The average person--
not the wealthy, but the average--pays about half of his or her income 
in taxes of all types, Federal, State, and local, sales, property, 
income, excise, Social Security, and so forth.
  The least efficient, least economical way to spend money is to have 
Government do it, because there is no real incentive or pressure on 
Government employees to work hard and/or save money, as there is in the 
private sector.
  Money left in the private sector creates 2 to 2\1/2\ times as many 
jobs as does money turned over to Government.
  Times are good now for some people.
  But they could and should be good for everyone.
  Our country could be booming beyond belief--people could be doing two 
or three times as good as they are--if we would do the four things I 
just mentioned: first, deregulate our economy; second, balance our 
budget and start paying off the national debt; third, greatly simplify 
our tax code and basically eliminate the IRS; and fourth, lower the tax 
burden on our people, at all levels, so they can spend their own money 
wisely instead of having bureaucrats do it wastefully.
  We could be booming, Mr. Speaker, but because real change has not yet 
taken place, there are many signs that we are headed into a recession 
that has been produced by our own Federal Government.


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