[Congressional Record Volume 156, Number 71 (Wednesday, May 12, 2010)]
[House]
[Pages H3425-H3432]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          JOBS AND OUR ECONOMY

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 6, 2009, the gentleman from Missouri (Mr. Akin) is recognized 
for 60 minutes as the designee of the minority leader.
  Mr. AKIN. Mr. Speaker, thank you very much for recognizing me and 
allowing us again on a Wednesday evening to explore the interesting 
question that has certainly been much in the minds of Americans over 
the last couple of years; that is, the situation of jobs and our 
economy. Particularly, what is the connection between jobs and the 
economy, and what is going on? Do we have reason for hope? Are things 
turning around or not? And we continue as Americans to ask, where are 
the jobs? Because there are many, many people who are unemployed, and 
many people who are unemployed for more than a year are no longer 
counted in our statistics, which suggests that the unemployment rate is 
somewhere in that 9 percent or 10 percent area. So the real 
unemployment rate is probably higher. That is a reason for people to be 
concerned, if you have a job.
  If you don't have a job, it is not a matter of concern; it is a 
matter of a serious crisis. And there are many people who are 
struggling with that, and we are going to take a look at that this 
evening and also take a look at what are the various factors that 
influence the fact that we don't have jobs, whether we are doing the 
right or

[[Page H3426]]

wrong things, and also the curious phenomena that we are seeing now, 
where, from a policy point of view, we are doing many things that are 
very destructive to job creation, and yet the economy seems to be 
coming back to some degree. What is that? What drives the economy? And, 
why would Wall Street be having things look good for Wall Street when 
so many people are out of work? We are going to take a look at those 
questions this evening.
  Starting off, I have depicted here: The lower part of this graph is 
the net jobs gained or lost. This centerline here is zero jobs. We 
haven't created any jobs, we haven't lost any jobs if you see a bar 
that is near this centerline. This is going back to 1993.
  We come here: 2001. It was the recession when I was first elected to 
Congress. In 2001, we were losing jobs. And you can see those. We 
inherited a recession from the last days of the previous 
administration. George Bush came to office here, we were losing jobs, 
and we had to do something to try to turn the economy around. You see, 
something was done. The economy turned around.
  Now, the next and last section of the graph is 2009, and you can see 
the tremendous number of jobs lost over here, the jobs lost again being 
the lines under the graph, showing that these are thousands and 
thousands of jobs that are lost. So this graph here shows the fact that 
we do have a great deal of job loss. The graph up above is a little bit 
more complicated. We don't need to get into that for a moment.
  So how is it that this whole situation came to be, and how did we get 
into the problems in the first place? Well, it started some years ago 
for this particular recession. It was brought on, as you recall, you 
have probably heard some discussion about the word ACORN or about 
Freddie and Fannie. The details of this whole situation may seem a 
little bit hazy to you. That is all right. A lot of things go on, and 
it is hard to keep track of everything. But the recession really got 
started because of a combination of several things that happened.
  By and large, if you are looking at somebody to blame, you should be 
looking here. You should be looking at the Federal Government. It was 
policies of the Federal Government that created this problem, the 
unemployment problem and the turndown in the economy.
  Well, exactly what happened? Well, what happened was, going back many 
years, people got the idea that it would be a good idea for banks to 
loan money to people so people could buy houses. But there are some 
people who economically are not in a very strong position to be able to 
continue to make their mortgage payment month in and month out. So 
Congress, in its wisdom, made the decision that we were going to force 
banks to make loans to people who were bad loan prospects. That means 
that there was a high chance that they could not repay the loan.
  Now, I suppose this was done in the name of compassion or whatever. I 
am not sure how compassionate it is to put someone into a loan that 
they can't afford to pay for, but that is what we actually instituted 
into law. So we had the situation ticking along like a timebomb.
  By the time President Clinton was in his last year, he increased the 
percentage of the loans that had to be made to people who couldn't 
afford to pay them, so the bankers were going out making loans to 
people that couldn't afford to pay.
  You say, well, why would a banker do that? Well, part of the reason 
is because a banker could pass the loan on through to Freddie and 
Fannie. Freddie and Fannie were two quasi-public organizations. They 
acted like private companies, but there was always this implicit 
guarantee that if anything happened to Freddie and Fannie, the Federal 
Government would come in and bail them out.
  Well, so what happens? You put that in combination with another thing 
that was going on, and that was this recession here. The Federal 
Reserve, first of all, created money, but they also particularly 
reduced very much the cost of money to banks. So you had almost a zero 
interest level and you had a lot of liquidity looking for someplace to 
invest money. So what did people invest money in? They invested money 
in houses. So everybody started buying houses, and housing prices went 
up and up and up.
  I came down here by 2004 or 2005, and I thought I was the dumbest 
Congressman in the entire House because I hadn't bought a multimillion 
dollar house and watched it double in 4 or 5 years. But of course, when 
you see something expanding that rapidly, it suggests you may be 
dealing with a bubble, and of course that is what happened: The housing 
bubble popped.
  So it was a combination, one, of policies created by Congress 
requiring loans to be made to people who couldn't afford to pay them. 
And as the housing bubble popped and the housing values came down, all 
kinds of people were like, when the music stops, who is left without a 
chair?
  So the economy starts to take a beating, and the group that was 
pushing very hard for these loans to people who couldn't afford to pay 
them of course was ACORN, someone certainly that the President was 
closely associated with. And was this a big surprise to lawmakers? 
Well, it really wasn't to many.
  In fact, if you take a look at that great conservative oracle, The 
New York Times--I say that somewhat sarcastically--you find on 
September 11, 2003, as early as September of 2003, President Bush was 
saying to Congress, ``Give me authority to work with Freddie and 
Fannie, because they are spending too much money.'' And so the Congress 
did that. The Republicans were in charge here in the House.
  We passed a bill, it went to the Senate, and it was killed in the 
Senate because the Republicans did not have 60 votes in the Senate. And 
so this ticking timebomb continued to tick. We did not deal with the 
financial mismanagement of Freddie and Fannie until the train came off 
the tracks somewhat down the line.
  That may be a brief version, but it gives you a sense as to how 
things got started. And it wasn't problems with free enterprise, it 
wasn't problems with businesses much. It was made right here in this 
Chamber.
  I am joined by a fantastic Congressman from Illinois, somebody who is 
highly regarded, a graduate of West Point, which we won't hold against 
him even, and it is Congressman Shimkus.
  I would be delighted to hear your perspective on where we are going 
with these things.
  Mr. SHIMKUS. I thank my colleague for giving me some time. I am 
joined with some high school students from North City, Illinois, which 
is a small rural community. The thing that is worrying them and they 
are focusing on is, where are the jobs going to be?
  And I always come back to over this last year and a half: What have 
we done to help create an environment? As you know, and you have got a 
great background in this, there is a simple statement: If you want 
employees, you have to have employers.
  Mr. AKIN. That is a profound statement that you just made. It is so 
simple, and yet we forget it. Don't we?
  Mr. SHIMKUS. Well, we forget it, and we drive them out. You look at 
what we have done with the bailout of Wall Street. What we actually did 
was we established a premise of too big to fail, and then we bailed out 
the huge, powerful, big Wall Street banks. And who is paying the fare? 
Our small community banks, with new insurance premiums, and they are 
the ones who loan to small businesses throughout small-town rural 
southern Illinois.
  And then we bring up a cap-and-trade regime on a false premise of 
carbon dioxide as a toxic emittent. We say we want to tax carbon. What 
does that mean? Higher electricity prices, higher gas prices. That is 
not a good signal for people to invest and take over this if they are 
going to get a return investment.
  Then, we do the fraud of all frauds, and we say we are going to 
provide health care to all Americans, and we are going to cut Medicare 
$500 billion, we are going to raise another $500 billion in taxes, and 
we are going to create a system that really is unsustainable.
  And the business community is saying, time out. I am not going to 
take any risk until this thing all sorts out.
  So it is unfortunate, when we really need jobs in America, that our 
response here in the past 18 months is to send every signal against 
those.
  I want to finish with the statement that if you want to pay for 
government

[[Page H3427]]

services, you have to have the private sector that is earning money to 
pay the taxes to pay for government services. Government employment, 
government jobs is not going to be able to pay for government services.

                              {time}  2030

  Mr. AKIN. Well, you know, you have just made a whole series of very, 
very excellent, really commonsense kinds of points. And in summarizing 
what you said, many people have likened that our policy for the last 
year and a half is the equivalent--it's tantamount to declaring war on 
business. Now, you can't declare war on business and then complain that 
there aren't any jobs around. It just doesn't make sense.
  Now, supposedly the President was going to do some ``Meetings on Main 
Street'' about unemployment. So a couple of weeks ago, we had a meeting 
across the river from you, gentleman, on Main Street in St. Charles, 
and we invited about 30 or 40 business people, some bigger companies, 
smaller companies, and we asked them, What are the most important 
things to get right, for us to get right down here in order to create 
the environment where the private sector could create jobs? We can't 
make any jobs in the Federal Government. Every time we make a job, it 
takes two jobs out of the private sector, but we can set a proper 
environment for job creation.
  So I asked it a little bit from a negative point of view. I said, 
What are the things that are most destructive to creating jobs? I have 
got a list of them here, but they put them in order--actually the order 
that I think is almost common sense. The first thing they said was 
excessive taxation. Now, starting on excessive taxation, everything 
that just came out of your mouth, gentleman, is another story of 
excessive taxation. You've got the Wall Street bailout. I think you 
mentioned that failed stimulus bill--I would call it a porkulus bill. 
The $787 billion really turned out to be $800 billion, and then you've 
got the tax on carbon, the cap-and-tax. That's something we passed in 
the House, but the Senate, fortunately, hasn't confirmed it.
  You know, the President made a promise, he said, No one making under 
$250,000 is going to need to worry about getting taxed, and yet we pass 
a bill that the poor soul that flips the light switch is going to be 
taxed. And then on top of that, we add socialized medicine. All of 
those things are massive taxes, and our small business people were 
saying, If there's one thing you want to do to create jobs, you do not 
want to bury the small business guy in taxes. Now, you know that. It's 
absolute common sense, isn't it?
  Mr. SHIMKUS. Right. And as we follow the now health care law, it's 
hard for some of us to really--I mean, the reality is that the people 
who are going to have the most difficulty are the small businesses in 
complying. And, again, when you talked about small-town rural America, 
you look at--we want to encourage people to hire folks. We don't want 
to discourage the centralized--and it's a sad state of affairs that the 
only place in America that you can go to find a job is Washington, 
D.C., and the only place that real estate values are high is 
Washington, D.C. We cannot continue to incentivize the national capital 
at the expense of Main Street USA.
  Mr. AKIN. Right. The first thing is on the taxation point, why would 
taxation kill jobs? You know, if you think about it--first of all, 
let's say, whereabouts are jobs? Well, 80 percent of jobs in America 
are businesses with 500 or fewer employees. So as you're saying you've 
got these small business guys out there, and all of a sudden the 
government just lets them have it with a whole bunch of taxes, the 
small businessman, the profit that his little business makes is viewed 
as he made a ton of money.
  Mr. SHIMKUS. If the gentleman would yield, in small town rural 
America, a big company has 25 employees, maybe 40 employees. I mean, 
they are the massive job creators of rural America. And I know the 
Department of Commerce has their categories of what defines small. Most 
folks in my congressional district--again, I have someone who joined me 
tonight--I mean, if someone had 500 jobs in any part of the district, 
that would be like a massive influx. And so that's where we need to get 
to. We need to provide the incentive. I'm not just putting just the 
national government to blame. The State of Illinois is one of the worst 
States for people to locate and create jobs because of additional 
things that you just highlighted.
  Mr. AKIN. Is it tough on taxes?
  Mr. SHIMKUS. It's tough on taxes.
  Mr. AKIN. Our businessmen said, That's the worst thing. I think their 
point was, You've got yourself a little machine shop or some business, 
if all your money is taxed away from you, you can't put a shed on it 
and add a new machine tool; you can't invest in a new process or a new 
idea or a new innovation.
  We've got a guy in my district and he actually has a farm over in 
Illinois, and I just love innovation in Americans. This guy recognized 
that there is a material that nobody seems to want in our country, and 
it comes out of the south end of pigs. And it's kind of smelly stuff. 
He has found some way to put pig manure into these big kettles, run the 
pressure up and the temperature up and turn it into a crude tar which 
he uses to make asphalt to make roads. And we have a section of road 
which is a pig manure road which apparently our Department of 
Transportation says is pretty good quality asphalt. You know, that's 
the kind of thing, though, you've got to have money to invest in a new 
idea, and if the government taxes all your money away, how do you 
create those jobs?
  Mr. SHIMKUS. And you have it up there too. I'm going to end with 
this: uncertainty, because uncertainty creates a disincentive for 
people to assume risk. And if they're going to assume risk, that's 
where bailouts are a failed economic policy because there are two sides 
of that coin. If you're successful, we want those folks to be rewarded 
and be able to keep that earned money so that they can grow their 
business. But if they fail, they fail. Grant failed numerous times. 
Lincoln failed numerous times. The history of this country is rife with 
very successful individuals who were not successful in many businesses 
but didn't turn to government to ask for a handout.
  I want to thank you. I wanted to come down and visit. I appreciate 
your yeoman's work on this, and thank you for your work.
  Mr. AKIN. Well, I sure appreciate the way that you represent your 
district, and I know your constituents do. We're proud of you, and 
thank you for the fact that you bring that kind of common sense from 
the heartland here to the Capitol. We need a little more of that common 
sense. Thank you so much, gentleman.
  So I was just running along. We talked about what caused all this 
problem. Well, a lot of it was government policies and the idea of 
giving people all these loans. They couldn't afford to repay them, and 
then you have everybody buying all of these different kinds of 
mortgage-backed securities. And the major corporations in America, the 
Wall Street corporations, started to fail and choke on these bad 
policies that are based on no common sense at all.
  So now you have what's happened before in America and, that is, you 
have a recession going on. So the question is, What do you do if you've 
got a recession? And different Presidents have had different approaches 
to that. But what we have seen, as we've just been talking about, is we 
have done about everything on this list which are things that are going 
to kill jobs. We've done everything policy-wise wrong. We could hardly 
get anything more wrong.

  First of all, according to the small business people in our 
community, the excessive taxation. Well, let's talk about what the 
taxation was. Well, you've got the Wall Street bailout which is 
basically creating a whole lot of the government debt which is going to 
have to turn into taxation. You've got the taxation of the cap-and-tax 
bill that they're talking about. You're going to expire taxes on 
capital gains, dividends and death taxes. Those taxes are all going to 
go up next year. And then you've got the tremendous taxes that are 
inherent in the socialized medicine bill. So you have a whole lot of 
taxes coming down on the owners of businesses. That's a job killer.
  The next thing that my constituents said that was a major part of the 
problem was the insufficient liquidity. A businessman needs to be able 
to get

[[Page H3428]]

loans from a bank. He doesn't want big ones. He usually gets a loan for 
3 to 5 years and has to pay a pretty decent percentage to the local 
bank to get those loans. Well, what's happened is that we have 
tightened up the security and the requirements for lenders in small 
banks so tremendously heavily that it's very hard for small business 
people to be able to get loans. They can't borrow money, or the money 
they used to be able to borrow, they're paying twice the interest rate 
for the money. So the liquidity is a big problem. Insufficient 
liquidity is a big problem that small businesses are having.
  They're having liquidity problems, tax problems. The economic 
uncertainty--of course all of these massive bills like socialized 
medicine, those are things that create a lot of uncertainty. So if 
you're uncertain as a small businessman, what you're going to do, as we 
say in Missouri, you're going to hunker down. You're going to avoid 
making decisions. You're going to try to preserve your capital and try 
do what you can to ride out the storm. So that's the economic 
uncertainty that has been created.
  And then the red tape is another one that they mentioned. Excessive 
government mandates and red tape. That's particularly deadly to small 
businesses because a big business could have a red tape department, but 
a small business can't afford to have that kind of overhead in terms of 
management staff. So red tape is also very much a job killer.
  Now we have employed all of these tools in the last year and a half 
and essentially declared war on business. So why in the world would we 
want to do something like that? We shouldn't be doing it. The result 
then is that we have created an environment to make a recession that 
could have been bad, we've made it worse. We were told in the recovery 
plan, in the beginning of the year in 2008 and 2009 here, we were told 
that if we don't pass the recovery plan--I guess they call it the 
stimulus plan--if we don't pass this thing, we're going to have 
unemployment as high as 8 percent or 9 percent if we don't pass it. 
Well, on a totally party-line vote, the Democrats passed this bill, and 
our actual unemployment has gone up like a skyrocket. And why is that? 
Well, it's because obviously the stimulus bill didn't work.
  Now, should we have known it wouldn't work? Of course we should have 
known it. We could have gone back to the days of FDR who also had a 
recession that he turned into a Great Depression because he used a 
wrong economic theory. And what was that theory? Well, it was the idea 
that if the Federal Government just spends money wildly, it will 
improve the economy because as the government starts buying, they'll 
get everybody else buying, and the whole economy will take off and do 
well.
  So that was what Henry Morgenthau, with the advice of Little Lord 
Keynes, did just prior to the Great Depression. So at the end of about 
8 years of tremendous pain and suffering where the small businesses 
were not just hunkered down but were out of business, then what happens 
is, this guy, Henry Morgenthau who was Secretary of the Treasury under 
FDR, comes here to Congress. He talks to the Ways and Means Committee, 
and he said, You know, we tried spending, and it doesn't work. It just 
doesn't work. And he said, What's more, we're tremendously in debt as 
well. So that goes back to basically World War II days that shows that 
this idea of the stimulus bill just doesn't work. It's not the right 
way to do it.
  Now, is there a way to deal with a recession that comes along? Well, 
the answer is yes. It's been tried by quite a number of different 
Presidents, and the various Presidents that have been most successful 
in stopping these recessions, one was JFK. Now, of course the Democrats 
run everything down here. Republicans in the House are 40 votes short 
of the majority, so we don't have a lot to say about these different 
bills that were passed, and the same thing is going on in the Senate, 
and of course there's a Democrat in the Presidency.
  Now, is there an approach that they could do? I have been critical of 
Democrats, but not because of the fact that I have anything personal 
but because the policies have been hurting our country.
  Here is a case, JFK, who is a Democrat, that did the right thing. 
They should have learned from him. And what did he do? He cut taxes. 
How does that help? He cut taxes. You've got problems all over. The 
government should be spending money and things. If you cut taxes, what 
happens is, it leaves more money for that small businessman to invest. 
As he invests, it creates jobs. As more people have jobs and make a 
good income, they pay more in taxes. So it's an ironic effect of 
economics that you can actually reduce taxes and increase government 
revenue. We saw it happen under the Bush administration. JFK of course 
was followed by, you know, Ronald Reagan and Bush. Both of them used 
the same approach. By cutting taxes, they turned us out of a recession.
  You could see that on the first chart that we had. You can see that 
this recession that President Bush inherited here, he had in 2001--and 
you have kind of lackluster job growth through 2002 into 2003. And then 
put the policies of these tax cuts, which he was able to get through 
the Senate. In spite of the fact that we did not have 60 Republican 
votes, we did get tax cuts through the Senate, particularly capital 
gains dividends and the death tax. And when we got that through, you 
can see that the recovery followed. And so that's the effective way, 
and I think it's not American even to be critical of a political party 
or somebody else's solution without proposing a better idea. So 
certainly the better idea is cut taxes. That's what always works. It's 
worked in other economies and other parts of the world as well.
  So here we've got actually a little bit of a cartoon of what's going 
on. Sometimes we have to laugh a little bit even though it doesn't seem 
very funny when you don't have a job. But you have the President here 
saying, Now give me one good reason why you're not hiring. Well, there 
are a whole bunch of good reasons in these bulls that are in the china 
shop. Certainly the health care reform is a huge tax, but it's also a 
tremendous amount of government red tape and an extreme, extreme 
incentive not to hire workers because you have to pay so much in health 
care if you are a small businessman with this new socialized medicine 
that has just been approved.
  The cap-and-trade or cap-and-tax is the energy bill. Of course, most 
businesses use energy. So if you have an increase in the cost of 
energy, which this bill would do, you're taxing small business. And 
then of course you have other different taxes in the background coming 
in. So we're doing a lot of things that are absolutely the wrong thing 
to do. So that basically could be summarized as a war on business.

                              {time}  2045

  We have talked about what the right thing to do is, which is to cut 
our spending and also to cut taxes. The point of the matter here is 
that our economy and these jobs all work according to basic principles 
of economics.
  So now we come to, I think, a very, very interesting question, and 
this is the question: If we have been doing everything wrong, which I 
would suggest from a policy point of view we have done about everything 
wrong. We have created red tape. We have created tremendous taxes, and 
we are not allowing the liquidity that the businessmen need to make 
jobs. On top of that, you have a high level of uncertainty and 
excessive government spending. If we are doing all of those things 
wrong, how come it seems like the stock market is bouncing back and it 
seems like we are starting toward a recovery in appearances? That 
becomes kind of an interesting question.
  If what I am saying is true that we have done all of the wrong things 
for businesses, and if you check with almost any small business man in 
America, they would say yes, you do not want to increase taxes and 
uncertainty and government red tape. You want small business men to 
have access to capital and liquidity, and all of those things, if we 
haven't done a good job, are problems. Almost all small business men 
will say that is common sense, and if you want jobs, you have to have 
healthy businesses.
  How come is it, then, that it appears that we are pulling out of the 
recession and starting to do better? Well, obviously the answer to that 
question is that there are some other things that also affect our 
economy. In fact, there

[[Page H3429]]

is another thing that is even stronger than all of the policies that 
are so important that we get right down here. What is that force that 
is so powerful? Well, in a way, you could look at it as the crack 
cocaine of our economy. Think of it for a minute that there is a person 
standing there. They are in need of a seven-way heart bypass and they 
have diabetes and they are getting older. So they are not too healthy. 
But with a little crack cocaine, they think they are Superman.
  Well, we have the equivalent of crack cocaine in our economic system 
in America, and that is the Federal Reserve. And their crack cocaine is 
to increase the money supply. It used to be called ``running the 
printing press,'' except today we don't run printing presses. Things 
are just recorded. But the point of the matter is that the Federal 
Reserve has created a tremendous spike in liquidity to try to deal with 
the tough times in the economy.
  On top of that increase in liquidity, they have dropped the interest 
rates down very low toward zero. What that does is it creates all of 
this easy money that is looking for a home, and that has a tremendously 
stimulating effect on the economy, a little like crack cocaine does to 
somebody who might otherwise be sick.
  So, when we have done this in the past, we run into these bubble 
cycles where you have easy money at a low interest rate. There are 
people who have access to that money, and they want to buy stocks. They 
find something they want to buy; they bid it up. It goes up, up, up, 
and then the bubble collapses. We saw it with the high-tech stocks, and 
we have just been through it with real estate. People who had a lot of 
money, particularly low interest rates in 2004, 2005, they go out and 
buy real estate because what is more solid and American and reliable 
than mortgages of Americans for their own homes? It has been a very 
steady business.
  Well, you have to watch out when you see money get too easy to be 
made. You saw home prices in many areas double, and then the top blows 
off. That is created by this easy money, or what I would call the crack 
cocaine of our economic system. That is what is going on right now. 
That is why you see Wall Street apparently seeming to do better, the 
stock market seeming to go up, and yet all of the policies from a logic 
point of view that are necessary for a healthy business environment and 
for lots of good-paying jobs, those policies are not in place and they 
are being ignored.
  In fact, it is almost ironic. The President made a statement, and I 
had it on a chart last week. He said the government can't so much make 
the jobs, but we need to set the environment so there is the proper 
environment for job creation. He was exactly right on that. And then he 
turned around and has advocated every single policy that he has been 
advocating, all of his priorities are going to have the net effect of 
destroying jobs. So there is a little bit of a dichotomy here.
  Now, I have been critical of Democrat policies, not because I don't 
like Democrats, and maybe I ought to make it clear. Everybody that I 
know of in this Chamber here, there are a lot of fantastic people, and 
I don't know of anybody who wakes up in the morning and thinks, How I 
can mess up our country? Nobody thinks that way, but the point of the 
matter is there are policies that work and there are policies that 
don't work. The policies that work to create jobs is you have to get 
off of the big spending and you have to back off on taxes. If you do 
that, you will actually get more revenue and you can pay for more 
government services.
  Let's take a look at what I am talking about, big spending. Many 
people felt President Bush spent too much money; in fact, he probably 
did. These blue lines are President Bush, and these show what the 
deficit is by year. If you take a look here, the very worst Bush 
deficit was this year. It is shown in red because this was the Pelosi 
Congress with Bush as President. He was somewhere just about $450 
billion of deficit, which was President Bush's worst deficit. So he 
spent more money than we had, and that wasn't a good thing to do. He 
had two wars going on, and we were just coming out of a recession. 
Anyway, his worst spending year was 2008.
  Now we come to Obama's first year as President. What we find is that 
now the deficit has more than tripled in 1 year. So we go from $450-
some billion under President Bush, which was about 3.1 percent of our 
gross domestic product, which is about average, really, for some of the 
deficits that various Presidents have run. The deficit is about 3 
percent of our gross domestic product. The next year, under Obama, the 
deficit, and Pelosi and Reid, the deficit triples to $1.4 trillion.
  Now, what does $1.4 trillion mean? Well, it is three times bigger 
than Bush's worst deficit, but as a percent of GDP, it is 9.9 percent 
of GDP. That is the highest since World War II in terms of government 
spending.
  So this is not the thing to be doing when there are not a lot of jobs 
and when businesses are being hammered. We don't want to be running 
that kind of spending, and that kind of spending tends to lead to all 
kinds of taxes. What happens is you can take a recession and turn it 
into a Great Depression by using the wrong policies.
  Now, one of the things that I hear sometimes from people, and I think 
it is a fair and a good question, and that is: Okay, Congressman Akin, 
you are criticizing some of these Democrats, but I think you have a 
short memory. Don't you remember that the Republicans used to be in 
charge of 2001 through 2006? You were in the majority. What kinds of 
things did you do?
  Well, when we were in the majority, we did a lot of things that 
nobody knows anything about, but they were not actually such bad 
policies.
  In the case of health care, for instance, did you do anything in 
health care? Yes, we did. We passed a number of bills to move forward 
with associated health plans. That was something where small businesses 
could pool their employees together and get a better price on health 
insurance.

  What happened to the bills that the Republicans passed in the House? 
They went to the Senate.
  What happened in the Senate? Republicans did not have 60 votes in the 
Senate, so the bill died for associated health plans. It was brought up 
numerous times.
  We had bills to change tort reform. They passed in the House and they 
went to the Senate. What happened in the Senate? You guessed it. We 
didn't have 60 votes and they were killed in the Senate.
  We had bills to protect against the problems of Freddie and Fannie. 
The Republicans passed a bill to create more government control of 
Freddie and Fannie because they were cooking their books and they were 
not solvent the way they should have been. Guess what happened to those 
bills over in the Senate? Because we did not have 60 votes, they were 
killed by Democrats in the Senate because we didn't have enough to get 
to 60 votes.
  We also passed a number of energy bills in the House to protect 
against spikes in gasoline prices that we have experienced. What 
happened to our energy bills? A number of them that were sent to the 
Senate, you guessed it. They were killed by Democrats in the Senate. In 
fact, people are surprised to note that there is more difference on a 
party-line vote on energy in the U.S. Congress than there is on the 
subject of abortion. Most people know Congress gets polarized on the 
abortion issue. They don't realize that we are even more polarized on 
things like energy. All of these different bills were passed in the 
House. And, of course, we did get some strong judges on the Supreme 
Court.
  Now, one of the things that has always surprised me from a policy 
point of view--aside from the fact that we can't seem to learn from the 
other countries that have gone bankrupt and the States in America that 
are going bankrupt because they are spending too much money--why is it 
that we have so much faith in big government? That is something that is 
a real puzzle to me.
  I think of another country that was founded on the idea of a great, 
great deal of faith in big government. This was a major world power, 
and their whole basic way of thinking about things was that the 
government is going to provide you with food, the government will 
provide the citizens with housing for a place to live, the government 
will provide the citizens with education so they can be well-educated, 
the government will provide

[[Page H3430]]

them with a job, and the government will provide them with health care. 
So this was the idea that big government is going to provide you with 
food and clothing and shelter and a job and education and health care. 
What was the name of this big country? Well, it was known as the Union 
of Soviet Socialist Republics, the USSR. It was done by the Communists, 
and they felt it was the thing that big government could be trusted to 
provide all of those nice things for citizens.
  It turned out, as we took a look at it, that it wasn't such a nifty 
theory. It didn't work, and it created a great deal of poverty. And not 
only that, the people who had adopted that theory had failed to recall 
that historically one of the greatest dangers to human life is big 
government. Big governments have killed far, far more human beings of 
their own citizens than all of the wars of history. If you take the 
wars of history from the time of Christ forward, you will find that 
there weren't nearly as many casualties from war as there were just 
from the casualties of a couple of Communist dictators to what they did 
to their own people. That's not to mention the Nazis and other kinds of 
dictators that have likewise killed many of their own citizens.
  In the case of Stalin, about 40 million people were starved in the 
Ukraine. And, of course, Chairman Mao, not to be outdone, is noted for 
having murdered about 60 million Chinese. That is more, the combination 
of those people under communism, under the big government theory, 
killed more people than any wars.
  So why do we have so much faith in big government when we have seen 
its tremendous failures? And yet it seems over the past year and a 
half, the solution to everything is more taxes and more government. I 
don't see the logic of why we want to be doing that. So that is what is 
driving this tremendous Federal spending is this faith that big 
government has to do everything for us; and, of course, economically 
that is not a good approach.
  The result is we have gotten into this particular situation here. 
This is the actual money that the Federal Government takes in is the 
blue dot, and the red circle here is the money we are spending. 
Obviously, if you look at this, you can see the blue circle is smaller 
than the red circle. That says we are spending more money than we are 
taking in.
  What is that ratio? That ratio today is when the Federal Government 
spends a dollar, 41 cents of it is borrowed. Out of a dollar, 41 cents 
is borrowed. That is the difference between the blue and the red 
circle.
  Where is the Federal spending going? It is going to Medicare and 
Medicaid, which are now mathematically broken. Over time, if you run 
what is happening with these programs, you don't change the programs 
any, you just have more and more people asking for services out of 
these programs, that, in combination with Social Security, the dark red 
here, is growing at a rate that you could get rid of defense, 
nondefense and everything else, and you are not going to have enough 
money to run the government.
  This is really a crisis, and it is a little bit ironic that when the 
Federal Government cannot run health care, that is Medicare and 
Medicaid, which is currently the Federal Government's responsibility to 
be running Medicare and Medicaid, although Medicaid is passed on to the 
States to a degree, too, that we cannot run that well, and so what do 
we do? We are taking all of that over and have the government run all 
of health care with this new socialized medicine bill. Certainly the 
solution to that bill is only one thing: It must be repealed. It is the 
worst piece of legislation I have ever seen in Congress, and I believe 
that there are many, many other people who have the same opinion that 
the solution for America to move forward with decent health care has to 
start with a repeal of socialized medicine. You can see we are not 
running medicine too well with the government even before socialized 
medicine, and that is the problem with this excessive spending.

                              {time}  2100

  And what happens then too is as the government grows and grows, you 
take money away from small businesses. First of all, they hunker down. 
They don't make decisions. They don't make jobs. They lay people off. 
But eventually you could make them sick enough that they close their 
doors. And guess where the jobs go? There will be jobs, they just won't 
be in America. They will be overseas. And that's the problem with the 
excessive taxation and the war that's going on in our economy on 
businesses and jobs.
  People have taken a look at various countries and looked at this 
problem with excessive government and the regulations and the 
increases, and we can see in 2001, that the United States was sixth in 
terms of an economic freedom index. I think this is calculated by the 
Heritage Foundation. And they took a look at all kinds of things like 
taxes, redtape and a whole series of other factors, and the United 
States is sixth with the particular list they calculated. We've 
dropped, just in 10 years, to eighth, behind several other countries.
  And one of the things that a lot of the European countries have 
discovered, and it's a little bit ironic because we always thought of 
them as being much more socialistic and Big Government in their 
solutions. They're finding that they're in a race to try to cut back on 
taxes on business because they realize businesses are the keys to 
prosperity, both in terms of jobs, but also in terms of government 
revenues.
  You have to remember that when the economy is sick, the State 
governments really take a beating, and so does the Federal Government. 
In fact, if you take a look at the early Bush years, 2001, 2002, what 
you found was the cost of the tax cuts that the Bush administration put 
together, including the cost of the two wars in Iraq and Afghanistan, 
that the total of that amount of money was less than the drop in 
revenue because of the recession.
  So when you have a recession, it's not just small businesses. It's 
not just citizens that take a beating. It's also governments that don't 
have revenue.
  So by cutting taxes all of a sudden, what happens? Well, what you 
find is that the government revenue starts to go up. You say, that's 
just like making water run uphill. Congressman Akin, you're an 
engineer. How can you say something that seems to be so hard to 
understand? How is it that the government could cut taxes and actually 
increase their amount of revenue that they take in through taxes?
  Well, the answer is pretty straightforward. If you think about it for 
a minute, pretend that you're king for a day and your job is to tax a 
loaf of bread. And so you're going to do--you've got to sort of think 
in your mind, now, how much tax am I going to put on a loaf of bread? 
Am I going to charge a penny per loaf? Or am I going to charge maybe $5 
for a loaf of bread for taxes? Well, you start thinking, if I do $5 
that's probably too much. People may not buy any bread at all. If I do 
a penny, I probably am not getting all the taxes I could get.
  Well, common sense says that somewhere there is an optimum amount the 
government can tax something that's optimum in terms of how much 
revenue you can get. And what's happened is the government has 
increased taxes so heavily that we're way beyond the optimum. And so, 
by reducing the amount of taxes, you actually can increase the amount 
of revenue because, as the economy gets going, it generates more jobs, 
more prosperity. And as you take a percentage of that in taxes you end 
up, even though it's a smaller percent, you end up with more tax 
revenue for the government, which is what actually happened in 2004, 
particularly, and 05 and 06.
  And so anyway, some of these different governments, these foreign 
governments are starting to realize, you know, the Americans were right 
all the time. JFK was right. Ronald Reagan was right. Bush was right. 
When you get in trouble, you want to drop taxes and cut government 
spending, and you don't want to get into this highly and excessive kind 
of government spending here. And so that's what they did. That's what 
many foreign countries figured out.
  And here we go along, the USA, and our tax on corporations is the 
second-highest in the world. It's like we haven't learned at all from 
the lessons that Europe has been learning. And so that's something we 
need to be paying particular attention to.
  Now, to add insult to injury, we not only are overspending, we're not 
only

[[Page H3431]]

overspending by looking at it in a different way, we're not only 
hammering businesses with all kinds of regulations, redtape, with a 
lack of liquidity, huge and high taxes, but now, we've gotten to the 
point where we're that cynical here in Congress that we're not even 
going to create a budget. It seems like I think it's the first time 
this has happened in a very long time, that the U.S. Congress is not 
going to have a budget for the year.
  And maybe you could say, well, you haven't stayed in your budget 
anyway, so what's the point of creating it? But you've got to have some 
guidelines, some sort of rules that we're going to go by. And 
apparently, it's not in the cards that we're going to create a budget 
this year.
  All of these things are very concerning. All of these things affect 
Americans everywhere. And they're things that it's right that the 
American public should be upset, should be concerned about these 
things. And there is certainly a level of fear and anger in the general 
public because of the fact that we're not really paying attention to 
our business. We're not really being responsible economically, with our 
constituents.
  Now, all of this stuff about the economy, jobs, the Federal Reserve 
creating liquidity and low interest rates, I guess it can seem kind of 
mathematical or maybe even a little boring if it didn't have such a 
tremendous impact on the lives of everyday Americans and citizens.
  I think sometimes it's helpful to put a picture on what we're talking 
about. And in my own mind, as a guy who's responsible for earning 
income for my family, the picture that I guess I live in fear of is a 
picture of a house with a sidewalk out in front, and the family 
furniture, like a sofa and an easy chair and an ironing board, and I 
don't know what else, sitting out on that sidewalk because I couldn't 
afford to pay the mortgage payment on the house. And so the house has 
been taken away from me and the family.
  And I'm picturing a wife and some kids looking at Dad saying, now 
what are we going to do? Now where are we going to go? You haven't had 
a job in a long time, Dad.
  And that's being created by the wrong policies right here in 
government. And it's that reason that there needs to be a change, and 
there needs to be a whole new look at what we're demanding that the 
Federal Government does.
  What's happened is we have drifted from the idea of limited 
government, of the Federal Government primarily doing only the things 
that States cannot do for themselves. Originally, a couple of hundreds 
years ago the Federal Government was very boring. We only had about 
four laws to the books. We had a law against piracy on the high seas 
because that wasn't a State function. We had a law against 
counterfeiting because that wasn't a State function to take care of 
that. And we had a law against treason because when somebody is a spy 
on America, they're a spy on the whole country. So there were a very 
limited number of laws at the Federal level. And all of the other kinds 
of things, things like murder and stealing and all those things, were 
all State laws.

  Now we look at the Federal Government, and what do we want the 
Federal Government to do?
  Oh, we want the Federal Government to do food, and we want the 
Federal Government to do housing, and we want the Federal Government to 
do education. We've just taken over almost all of the student loans in 
this last year or two, so now the Federal Government's in the student 
loan business. And we've got the Federal Government in the car-making 
and the insurance business and the flood insurance business. And we've 
got the Federal Government in the food business and in the housing 
business, in all of these different things, which never, never were 
dreamed of by the Founders, that the Federal Government would get into 
the health care business and all of these different things.
  And so what's been the result? Well, the result, as you can see, is 
excessive spending. But it's been that chairs and furniture sitting out 
on the sidewalk, and the father trying to figure out, I've been looking 
for a job for over a year now, and I still don't have a job, and asking 
himself, what went wrong?
  Well, an awful lot went wrong. It started right down here when we 
started imitating the socialistic Big Government idea that the 
government is going to do everything for everybody. And the fact of the 
matter is, the government shouldn't and it can't, and we are getting a 
real lesson in that in these very days.
  And so it is that we've come taking a good look at where the problem 
started, the fact that we have done the wrong solutions, the solutions 
of excessive government spending, excessive taxation, taking away 
liquidity from small business people, and then, last of all, using the 
crack cocaine of the Federal Reserve to create tons of money and low 
interest rates. That will boomerang on us, just as crack cocaine does 
to a sick person, and it will continue to make our country sick until 
we can start to direct the Federal Reserve to control and regulate the 
supply of money in such a way that we don't create tremendous amounts 
of liquidity and inflation.
  I'm joined here this evening on the floor by a good friend of mine, 
the Congressman from Iowa who's noted as a businessman, a man of a 
considerable amount of common sense, a man who's not shy about 
expressing his opinions. And so it's a treat for me to just welcome my 
good friend, Congressman Steve King, if you'd like to share a word or 
two. We're about to close up.
  Mr. KING of Iowa. Well, I thank the gentleman from Missouri for 
heading up this Special Order hour and for talking so much common sense 
into the Record himself. And as we watched, there are two different 
paths one can follow. The road that's being traveled by the Obama 
administration and the Pelosi House and the Reid Senate is a road down 
the path of Keynesian economics on steroids. And the path that we 
should have followed, and the path that we've got to get back to, is 
more of the Adam Smith, free market component of our free enterprise 
economy. And if we look at all of the components of this free market 
that have been nationalized, taken over, or are under a great threat of 
this Congress taking them over, we can add up, as I've many times said, 
the banks, the insurance companies, Fannie and Freddie and the car 
companies, the student loan program completely, the nationalization of 
our bodies under Obamacare, our skin and everything inside it. Now we 
have the financial services bill sitting over there in the Senate about 
ready to get shoved out of there and back here for a conference report, 
and it could end up on the President's desk. If we add all of that up, 
and if we add to that cap-and-tax, which is another huge endeavor on 
the part of the President, the Speaker and the majority leader in the 
Senate----
  Mr. AKIN. Controlling energy, controlling health care, controlling 
every financial transaction, it's like three nets of oppression, isn't 
it?
  Mr. KING of Iowa. Let me add up the percentages of the formerly 
private sector from a year and a half ago, and it comes to 74 percent 
of the private sector would be either nationalized today or 
nationalized with the two acts that are pending that they're trying to 
bring at us, that being cap-and-trade and the financial services, Mr. 
Akin, and I'd yield back.
  Mr. AKIN. Wow, that's incredible. Now, that's 74 percent of what used 
to be private a couple of years ago has been nationalized, or at least 
under heavy national regulation and control?
  Mr. KING of Iowa. We are at least at 51 percent that has been 
nationalized, and that's the banks, the insurance, Fannie and Freddie, 
the car companies, and then Obamacare. That's 51 percent.
  Mr. AKIN. Now, is that based on the amount of revenue that each one--
the size of the business? Is that how you figured it?
  Mr. KING of Iowa. It's based upon the private sector activity as 
analyzed by Dr. Boyle of Arizona State University, who's written the 
analysis and the article on it, Mr. Akin.
  Mr. AKIN. Wow, that's absolutely incredible. So just in the last year 
or two we've seen history being made.

                              {time}  1715

  Mr. KING of Iowa. We have seen history being made. And those things 
are what one would consider to be a done deal. And then we are on the 
cusp of the financial regulations, which is another 15 percent of the 
economy some

[[Page H3432]]

say. And then add to that another 8 percent, and which I think is a 
very low estimate of what cap-and-trade or cap-and-tax would actually 
do to us. So I don't know what's left. Whatever part of the economy 
they would like to take over.
  But from my standpoint, every bit of free enterprise that's out there 
increases the vitality of Americans. They have got a reward for working 
and producing more effectively. It's not enough to work hard; you have 
got to work smart, too. And everything that the Federal Government 
takes over diminishes the vitality of the American worker and lowers 
the average annual productivity of our American people, which 
diminishes us as a people and reduces our gross domestic product and 
takes our standard of living down.
  Mr. AKIN. You know, what you are talking about makes all common sense 
economically. One other thing, and I have heard people talk about this, 
you can take a look and see that we are not learning from history. You 
can see that socialized medicine didn't work well in England because 
you look at the cancer rates there. You take a look at Canada, their 
socialized medicine system costs them a fortune. When you get sick in 
Canada, you come down to America to get medical care. And you can see 
examples.
  You can see examples of it not working in Massachusetts, not working 
in Tennessee. And yet we refuse to learn from it. It didn't work in the 
Soviet Union. We refuse to learn. And to some degree, you can say 
logically we should be smarter than to do all this socialistic stuff.
  But there is another argument why it's not a good idea which I have 
not heard as often. Maybe it's a more emotional argument, but it is 
true nonetheless. And that is that it's stealing. It's stealing. When 
the government takes money that it's not authorized constitutionally to 
take, that it has no moral logical reason why the government should 
take money and redistribute money, it goes back to the argument between 
the President and Joe the plumber. And the President made it very 
clear. He said we think it's the job of government to take money from 
one person and give it to someone else.
  Now, when and where does the government have the authority to steal 
money from one person and give it to someone else? If I beat you over 
the head and take your wallet, we call it stealing. But if the 
government takes your money out of your pocket and gives it to me, is 
it morally any different? It's still institutionalized theft. And 
fortunately, our Founders understood that.
  They pitched socialism out with Governor Bradford in the 1620s when 
it was imposed on the Pilgrims by the loan sharks from England. They 
understood that not only did socialism not work, they tried it. They 
almost starved under it. They also knew that it was morally wrong and 
that it was institutionalized theft.
  Mr. KING of Iowa. Is that the point in history when the first order 
came down no work, no eat?
  Mr. AKIN. I think that the no work, no eat came a long time before 
the Pilgrims. As I recall, it was written in the Good Book.
  Mr. KING of Iowa. But in the United States?
  Mr. AKIN. That might have been a direct quote from Scripture, though. 
So that's good.
  We are getting pretty close in time. Well, I am very thankful for the 
opportunity to share with my colleagues and friends my very deep 
concerns about the fact that we are doing the wrong things in the 
economy. And the solution is straightforward. It is cut taxes, cut 
government spending, and repeal the socialized medicine bill and get 
back to some sense of fiscal sanity and reduce the number of functions 
the Federal Government is trying to do. This isn't that complicated. 
It's been done before. There is all the precedent that shows if we do 
this it will work. But we are on the wrong track now.
  I do thank my good friend from Iowa, Congressman King, who has just 
been a stalwart of freedom and liberty. And God bless you and God bless 
the USA.

                          ____________________