[Congressional Record Volume 156, Number 104 (Wednesday, July 14, 2010)]
[House]
[Pages H5603-H5610]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
THE GOVERNMENT, THE ECONOMY AND JOBS
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. Madam Speaker, it's a treat to be able to join you this
evening to talk about the things that are of great significance to our
country and to every individual citizen that lives in America. I
thought that as we got into the subject of where things are with jobs
and the economy tonight I might start by introducing it in a little
different way than we do sometimes here on the floor, and what I'm
going to be talking about tonight really is the fact that there is this
fundamental difference between Republicans and Democrats. And most of
the fighting and argument comes really in the answer to just one
question. It's kind of a really simple thing. And the question is this:
What should the Federal Government do? That's really what divides us.
That's what makes all the people here in this Chamber disagree with
each other, and sometimes even scream and yell, but at least
respectfully disagree with each other, because we have a fundamentally
different idea of what the Federal Government should do. That's a huge
part of what we discuss. And, of course, the more that the Federal
Government is going to do, it is going to cost more. And the more that
it costs, the more regulations and all that you have, the more laws
that are passed. And, inevitably, as the government does more, people
have less freedom.
So there is some sort of a question, well, you know, what should the
Federal Government do. So we're going to be talking in a way about that
tonight because it is the question of politics, essentially. And of
course the Democrat position is--it's almost like the law of gravity,
that wherever there's a problem, the answer always is more taxes and
more government. The government should fix that problem. That's what
they think. And the Republicans always say, well, we want less taxes
and less government, and they tend to go that way. So we're going to
talk a little bit about that.
We're also going to talk about sort of a theoretical question that
sometimes I used to ask interns. We had an intern program. These are
students that are in college and are just about to graduate from
college. And I would ask them this question, and that is, Is it
possible for the government to steal? Can the government steal from
people? And you'd see they'd get these quizzical or puzzled looks on
their faces. Can the government steal? Well, what does that mean? And
you'd see them thinking, Well, I guess it's impossible because the
government can kind of do anything they want and, therefore, the
government can't steal.
Of course if you come to the conclusion that the government can't
steal, then that means that you believe the government owns everything.
Do you really believe that? Many people are taught that in school. As
they get older, as they work hard for a living, they start to take a
different perspective. They worked hard for that dollar bill, and
they're not so sure they want the government to confiscate it.
Anyway, we are going to be talking a little bit about the conditions
in our economy and where we are. Why is it that we have a problem with
jobs? Why is the economy flat on its back? Why do we have a sense that
things are not well in America? And there are some answers to those
questions. It's not complicated. We simply look to the people who have
gone before us and see what those are.
I am joined here this evening by a new Member of Congress, a young
man that shows tremendous promise and is joining us here on the floor
tonight from Georgia. Georgia seems to be a good State for growing
congressmen. And my good friend Congressman Graves is joining me on the
floor here tonight from the State of Georgia. We are here early enough
that it may be that even some of your constituents will have a chance
to say, Hey, that's my guy. We sent him to Congress, and he's doing a
great job.
Welcome, Congressman, and we are going to get into things here in
just a minute. I thought I might start, though, by going back a little
bit to how did this economic problem come to be.
{time} 1750
And of course history just kind of continues to go along. But if I
had to pick a point, this is kind of an interesting one. This is
September 11, but it's not 2001, it's 2003, 2 years after the attack on
New York City, September 11, 2003.
This is the New York Times, not exactly a conservative oracle, is
reporting some news and this the news. It says that the Bush
administration today recommended the most significant regulatory
overhaul in the housing finance industry since the savings and loan
crisis nearly a decade ago.
And it goes on to say that under the plan disclosed in the
congressional hearing today a new agency would be created within the
Treasury Department to assume supervision of Fannie Mae and Freddie
Mac. Why? Because they just lost about a billion dollars, and they
weren't running their house very well.
Now, Freddie and Fannie are not government organizations. They're
quasi-government. And when Freddie and Fannie started doing some wild
and wooly things economically, the problem was that the assumption was
the Federal Government would come and bail them out. And so Freddie and
Fannie are getting out. This is 2003. Real estate market's booming.
President Bush says, watch out, Freddie and Fannie are getting in
trouble. I need more authority as President to control Freddie and
Fannie. Freddie and Fannie, paying many lobbyists up here on the Hill,
dishing out hundreds and hundreds of thousands of dollars, thousand
dollar bills, just passing them out all over here. So there's Freddie
and Fannie. They're starting to get in trouble. President Bush says
we've got to regulate them.
Now the Democrats, on the other hand, the guy who is now in charge of
taking care of regulating Freddie and Fannie because he's in the
majority now, this is Congressman Frank, the Democrat, he says, these
two entities, Freddie and Fannie, are not facing any kind of financial
crisis.
Well, that's interesting. We, of course, 20/20 hindsight we say,
well, obviously you were wrong. I'm sure he would admit he was wrong.
They were facing a financial crisis. And as Freddie and Fannie start to
crash and collapse, we start to see the recession that's upon us. And
so that was a piece of it.
Now, Freddie and Fannie, their whole concept was that we're going to
require banks to make loans to people who really can't afford to pay
the loans. Now, how that's compassionate I'm not so sure because I
wouldn't want to be in debt to some loan for my home that I couldn't
afford to pay the mortgage payments on.
[[Page H5604]]
But many people were encouraged to take loans out on houses because
they're going up in value so fast during those years. You just go ahead
and take the loan, postpone paying any interest payments. Five years
later turn the house over, you doubled your money. It sounded good for
a while until the music stopped, and then you didn't have a chair to
sit in. And so we have the beginning of this financial problem that was
based on liberal social policy that said that banks have to loan money
to people who can't afford to pay those mortgages, and we'll just sort
of sweep it under the carpet.
Well, then as the economy crashes, what happens? Well, we go back to
the same old mistake we've made in the past. Unfortunately, with the
stimulus bill the Democrats didn't learn from their mistakes. I wish
they would learn from other Democrats. They may not want to learn from
Republicans, but at least learn from other Democrats.
This guy, Henry Morgenthau, is Franklin Delano Roosevelt's Treasury
Secretary, and he's the one that started with the recession which
turned into the Great Depression because they did the wrong things.
So he says now, after 8 years--their idea was that if you grab the
loops of your boots and pull hard enough, you can fly around the room.
The idea is if the government spends enough money, it will make the
economy do really well. And so they tried it for 8 years. And this is
his report to Congress.
He says, We have tried spending money. We're spending more than we've
ever spent before, and it does not work. I wish they heard those words:
``it does not work.''
I say, after 8 years of the administration, we have just as much
unemployment as when we started, and an enormous debt to boot.
You want to know why we've got unemployment? Because we haven't
learned from going back even to FDR's Treasury. This was Keynesian
economics. It says if the government hires a whole lot of people,
spends a whole lot of money, it's going to make the economy okay. But
the trouble is, it doesn't work.
I'd like to ask my good friend from Georgia now, Congressman Graves,
if you would just join us. Let's talk a little bit about this whole
situation because I don't want to be just critical of the Democrats. I
will be critical of them, not because I don't like them, but because
they're wrong. Their economics are wrong. They're doing the wrong
thing. They're hurting the American public.
People are out of jobs, and what we need to do is say, that's not the
right way to do it. But we have to have a good solution. We have to
offer something constructive.
And let's talk about that. I yield.
Mr. GRAVES of Georgia. It's great to join you tonight on this
discussion. I think it's the number one discussion going on across
America right now, and that's our economy, how's it going to get back
on track.
And we've seen 15, 16 failed months of economic policy coming out of
Washington, DC right here. And as I spent my time on the recess, and I
had the opportunity 31 individual times to speak to various groups on
those 12 days, I can tell you the economy is on the tops of the minds
of the people.
Mr. AKIN. It sounds like the people from Georgia got their nickel's
worth out of their Congressman. Thirty-one separate meetings?
Mr. GRAVES of Georgia. Thirty-one separate addresses or speeches over
12 straight days.
Mr. AKIN. I wouldn't want to be your car.
Mr. GRAVES of Georgia. But I can tell you, it's the number one topic
on the minds of north Georgians, is how to get this economy back on
track.
But what astonished Georgians so much was that just 4 days before
July 4, the day of independence, the day of celebrating independence
from tyranny and bondage of years ago, 4 days before that, $167 billion
of indebtedness was created on 1 day here because of the Federal
Government. That's the numbers, 1, 6 and 7, with 9 zeroes behind it, a
phenomenal amount, nearly $1,500 per person here in the United States
just on 1 day.
Mr. AKIN. You're saying $167 billion of indebtedness just up to the
time of just before the 4th of July?
Mr. GRAVES of Georgia. No, just on 1 day. That was June 30, June 30
of this year alone, which was more than the deficit of 2006 altogether.
And you look at the stated budget of the State of Georgia, the annual
budget is about $17 billion today. So almost 10 times the budget of the
State of Georgia for an entire year was borrowed in 1 day here for the
Federal Government.
Mr. AKIN. Wow, that's a lot of borrowing.
Mr. GRAVES of Georgia. So Georgians want to know how are we going to
get back on track. So I spent part of my time this week on what I was
calling my Economic Advisory Tour. We decided we're going to tear down
the walls that we see here in Washington where Washington is not
listening to the constituents. Instead, we're going to open up
communication. Instead of Washington pushing down ideas on job creation
on the private sector, why don't we get the ideas from the business
leaders themselves, the risk-takers, the entrepreneurs, the ones that
have the vision and the dreams themselves.
And so we had a great tour this week. And we came up with a simple
formula. We're not that far away. In fact, we have, what, in America,
17 million Americans without a job, 27 million businesses all
throughout the Nation; and we know all those businesses want to expand,
succeed, have a profit because we believe profit's a good word here in
the Republican Caucus.
But you have 17 million unemployed. You have 27 million businesses,
so the formula is simple. If just one business out of every three would
hire one person in the next 12 months, unemployment would be cut in
half. And you know what? I didn't say government.
Mr. AKIN. That's pretty straightforward. All you have to do is just
create one job per every three businesses, and there's no more
unemployment.
Mr. GRAVES of Georgia. And we didn't say if government would hire one
more American. We said the private sector. So the question comes down
to this, and this is probably what would be a great discussion tonight
is, Why? Why are businesses in north Georgia and all across this Nation
saying, you know what? I'm not going to hire somebody right now, even
though I want to. I want to expend my business. I want to see my
profits grow, my sales increase. I want to invest in capital, but I'm
not right now.
Mr. AKIN. Not going to do it. Hey, you know, I'd really like to pick
up because, as you said, there are people sitting around having dinner
in America. In fact, I'm a little hungry myself. I'm going to look
forward to getting some chow. But they're sitting around there talking
about the same things you and I are talking about here tonight.
And we've talked about one solution, which was the government takes
$800 billion. That's what the Democrats did with their stimulus bill,
and they said, if you don't pass this stimulus bill, do you know what's
going to happen? We might get unemployment as high as 8 percent if you
don't pass this stimulus bill. So the Republicans didn't vote for it,
but they pushed it through anyway. Spent $800 billion.
And it really wasn't even good old FDR, you know, ``stimulus.'' It
wasn't concrete to build hydro-plants or roads. It was basically taking
money from one State, like in the State of, I don't know about Georgia,
but Missouri, we're fairly conservative and we have a balanced budget,
and we're not overspending. And yet you've got Illinois or California,
they're overspending on the pensions of a lot of, like, teachers and
things. So they take money away from our States, and I assume Georgia
is probably a little bit more cautious fiscally. They take money away
from our constituents and send them to the other States where the
governments have been out of control spending.
Well, anyway, so they get this idea.
{time} 1800
Mr. GRAVES of Georgia. Wealth redistribution.
Mr. AKIN. The old wealth redistribution. The old socialism deal. So
anyway it is $800 billion. And here is what actually happened. This is
putting people back to work the big government, Democrat way. Look what
happens to the employment in the private sector. It's this white line.
So 2007, 8, 9, 10, you see there is unemployment. And yet if
[[Page H5605]]
you take a look at the red line, that's the Federal Government. It's
hiring all right. Instead of letting the businesses keep some of their
money and hire people, instead they're hiring government workers. So
that's how it works.
Mr. GRAVES of Georgia. If I remember right, what, about 700,000
temporary workers for census data gathering, which already a third of
them have been laid off.
Mr. AKIN. The trouble is really the government can't stimulate the
economy. The whole assumption is silly, because all the government does
is takes money and spend it. But if you hire a government employee,
does that create a job? The answer is no, because for every one
government employee you have two jobs you have lost from the private
sector because you are sucking money out of the private sector. So when
you have the government spending a lot, you take jobs away. That's
what's going on. That's why the jobs are going.
Mr. GRAVES of Georgia. If I could expand upon that, because you make
an interesting point. Because what I have started to understand, just
from talking to business owners, is that the labor pool is a zero sum
game. You are either in the private sector or you are in the government
sector, one or the other. And so as the government sector expands, you
are actually drawing intellectual capital and wealth out of the private
sector all together and expanding the governmental sector. So the
inverse of that would be if we want to shift some intellectual capital
and wealth back to the private sector, we must shrink the governmental
sector.
Mr. AKIN. It's one of those things, it's sort of an inevitable law.
And you can't just let the government continue to grow and grow and
grow, because eventually it takes over everything like a cancer.
Mr. GRAVES of Georgia. I guess to illustrate that point even more
clearly, let's assume government is the solution here. And we hear a
lot of people say government's the solution. So why don't we make every
American a government employee? Why wouldn't we do that if everyone
could have--
Mr. AKIN. Don't you go giving people ideas here in D.C. Somebody will
try and do that you know.
Mr. GRAVES of Georgia. But they say that's the solution, to expand
government. That's what creates jobs. So why don't we do that for
everyone?
Mr. AKIN. Of course, obviously, that doesn't work, does it?
Mr. GRAVES of Georgia. It doesn't work. Why? You are right. The
answer then is the private sector.
Mr. AKIN. This is what was promised with the government bailout. You
know, we are going to do the stimulus bill, $800 billion. And if you do
the stimulus bill, these are the numbers the administration and the
Democrats said--this is what's going to happen to unemployment; it's
going to go down. And if you don't pass the bill, they said this is
what's going to happen. But we did pass the bill, and that's what
happened. Obviously, their economics don't work. They don't understand
the facts.
So where have we gone? Here is the picture right here. This is the
nasty little secret down here. You remember hearing that they used to
say that George Bush spent too much money.
Mr. GRAVES of Georgia. Right. Eight failed years, if I remember
right.
Mr. AKIN. See, those are these blue years, was George Bush. And then
right here was a Bush year, but this is when Speaker Pelosi was in
charge of Congress. So this was in a way, if you give Bush credit for
when Pelosi was in Congress, Congresswoman Pelosi, then this would be
his worst year, which is about $460 billion worth of deficit. That's
his worst year.
The next year, 2009, was when President Obama and the Democrats ran
everything. Take a look at this jump. My goodness, it's a three times
worse deficit than the Republicans had run under Bush, and Bush was
spending too much money. And I agree we were spending too much money.
And then the next year, 2010, it's even worse.
Mr. GRAVES of Georgia. So if you go back to your other graph that
talked about employment and the growth of employment, or I guess in our
case what we are talking about is the growth of unemployment today, you
would see it probably correlates with that deficit spending.
Mr. AKIN. If you spend more money, look what happens. You start to
lose jobs.
Mr. GRAVES of Georgia. Yeah.
Mr. AKIN. Now, does that make sense? Is that logical? Now, you know,
I was talking to a bunch of people, too, as I went around my district.
And you know, people make economics way too complicated. I said, look,
it's not that complicated. It's like a lemonade stand. Just picture you
run a lemonade stand. It doesn't have to be complicated. And if you
want a little business, if it's a lemonade stand or a machine shop or
whatever it is, you want to make some jobs, you want to do some jobs,
what you want is you have got to allow the guy that owns it to make
enough profit from it so that he will add another wing on it, and he is
going to sell tea mixed with lemonade, and then he is going to have
peach lemonade, and different things and different products, different
people. So as he expands his business he hires more people.
But in order to let him do that, first of all he's got to keep enough
of his profit to be able to invest it back in his business. I mean it's
isn't complicated. Don't make economics so hard. And so I am sure you
are talking to your constituents. My constituents are nodding their
head up and down, yeah, I understand that. Not that complicated.
So if you want to know what's going to kill jobs, the first thing is
excessive taxation. It's just a killer to jobs. Where does the
government get all its money? Taxation. Did you talk about that back in
Georgia?
Mr. GRAVES of Georgia. We did. And I know we are moving to solutions
here.
Mr. AKIN. Good.
Mr. GRAVES of Georgia. It's easy to look back and sort of, I guess,
bash the policies of the last several months, but what's important
right now as a Nation is looking for leadership. I mean there has been
a lack of leadership coming out of Washington for some time now. The
Nation's looking for leadership. They're looking for a vision. They're
looking for a plan. And what we have discovered is it's about certainty
in the marketplace. When the marketplace has a little bit of certainty
about what's going to happen in the future, that creates confidence.
There is no confidence in the business marketplace.
So your first point up there is excessive taxation. The one thing
that is certain right now is that because of inaction right here in
Congress because of the Democrat leadership, taxes will go up this
January of 2011. Capital gains will rise. Dividend tax will rise. Every
income tax bracket will rise. The death tax will rise. The marriage
penalty will rise. All of those will rise. So if we want to bring some
confidence back to the marketplace, we would make those tax cuts
permanent, wouldn't you think?
Mr. AKIN. You are absolutely right. I think you are hitting a couple
of different points in this chart. The first one I am talking about is
excessive taxation. But taxation also creates an economic uncertainty.
And if you have got that lemonade stand and you don't know what's going
on, you think maybe a tornado is coming, or maybe there is a tornado
coming from Washington, or whatever it is, what you are going to do is
you are going to hunker down. In Missouri, we use the word hunker down.
I don't know if there is a verb to hunker or not.
Mr. GRAVES of Georgia. You know, that's a favorite Georgia Bulldogs
statement.
Mr. AKIN. Is it? Okay. Anyway, if you are talking about economic
uncertainty, if you don't know what's going on as a businessman, what
you are going to do is you are going to be very cautious, very
conservative, and you are not going to hire a bunch of extra people.
But let's take a look at these job killers. Excessive taxation.
Lets's take a look at what's coming down the pike. You have to be able
to see. This is the largest tax increase in history unless Congress is
going to act to deal with it. First of all, for married people the
standard deduction decreases if you are married. And then parents, you
have a child tax credit, it will be cut in half from a thousand to 500
per kid. If you die this year and you have an estate, you pay nothing.
Next year if you die, 55 percent tax on it.
[[Page H5606]]
You are a small businessman. You have gotten to be 80 years old. You
got your business all going, it's really doing good. It's actually a
farm. It's 1,000 acres with some big pieces of equipment. It's worth
$10 million, your farm is. And you up and die this year, and you pass
that farm on to your son and he runs it, no problem. Next year same
thing happens, you got the nice farm, got it all set up, you die, the
government says, hey, taps your son on the shoulder, I need 55 percent.
But he says wait a minute. If I take half the land of the farm then it
doesn't make the thing work economically. I can't run the farm on half
the land and half the equipment. If I have to sell 55 percent of it,
you are going to put me out of business. They say you don't understand.
You owe the IRS 55 percent of the cost of that farm. And so that small
business closes down next year because of this policy.
Because what are we doing? Largest tax increase in history. Take a
look at some of these tax increases. If you are paying 10 percent, you
are going to be paying 15 percent next year. Those who are paying 25
percent of what they earn, they are going to be paying 28 percent.
Those paying 28 are going to go to 31. Those paying 33 are going to go
to 36. Thirty-five is going to go 39. Capital gains, dividends, death
taxes. All of this stuff is going up.
Mr. GRAVES of Georgia. Now, if I remember right, a couple years ago
we heard a lot about hope, a lot about change. Taxes were not going to
go up on the middle class if I remember right. But if I look at your
charts, it's clear that the taxes are going to go up on not just the
middle class, but every class. Everyone will pay taxes, regardless of
where they are on the economic spectrum whatsoever. And as a result,
businesses will not hire as many individuals because their taxes are
going to go up. And if businesses aren't hiring individuals,
unemployment continues to rise. Unemployment continues to rise, it
impacts everyone throughout this Nation. Again we are back in this
crazy cycle.
Mr. AKIN. Same cycle again. So basically what you are saying is,
let's say that you don't make hardly any money at all. And so you are
saying to yourself, hey, I am not making much money, so I am not paying
any income taxes. So do I care? I like it if the taxes go up.
{time} 1810
Oh, no, you don't, because what happens if you have excessive
taxation? You get no jobs. You know, you can't just beat up on
businesses, say all businesses are bad and then complain there aren't
any jobs. So if we keep soaking the owners of businesses with excessive
taxation, we're going to have a problem with jobs.
So what the solution to these problems is--we're making it sound
complicated. It shouldn't be complicated. It's simply that you've got
to back off on taxes and back off on government spending. It's as
simple as that.
Mr. GRAVES of Georgia. So the solutions aren't reform and takeover of
various industry in this Nation. In fact, it's just the opposite,
because in the 15 counties that I spoke to this week, they said, Look,
just get out of our way. Let us once again be creative, come up with
the ideas to dream and to expand my business. But don't put that next
regulation, don't force health care upon me. Don't increase taxes right
now at all. Instead, let us, the business owners, the entrepreneurs,
the risk-takers, the ones who are willing to risk it all and work the
hardest here and put it all on the line, allow us to do that without
government interference.
Mr. AKIN. This is kind of an amazing chart. These are all different
countries all around the world down here, and there's a little green
line there. And this is the corporate tax rates. And this little green
line happens to be the United States. And the only one with higher
taxes on corporations is Japan. And we wonder, gosh, we can't
understand why we've lost jobs in this country. Well, we've got the
second highest corporate tax rate going, not to mention the taxes on
individuals, as you're saying.
So we're not doing the job. And part of the reason we're doing all of
this taxation, of course, is because we're spending too much money.
Mr. GRAVES of Georgia. It seems that there was a report put out by
the Heritage Foundation that indicated that America is now classified
for the first time as ``mostly free,'' I believe, given their ranking
system. And that would be a great illustration. I don't think most
Americans realize that America is second highest in the world when it
comes to corporate tax rates, behind Japan, that all of these other
nations that you have on this chart have lower tax rates than the
United States of America. And we wonder why jobs go overseas to other
countries.
Mr. AKIN. Right. And that's the thing. People get really upset. In
fact, the Democrats that were talking before we came on tonight,
they're very upset that all of these jobs went overseas. And I'm
thinking to myself, Well, who's pushing all of the jobs overseas? You
create an environment in America that is hostile to business and the
jobs are going to go overseas. It is as inevitable as water running
downhill.
And what do we do? We keep increasing taxes, increasing government
spending, and the smart executives and corporations in America that
have plants and facilities all over the world, they keep creating jobs.
It's just the jobs aren't here. The jobs are going overseas because
they've created such a hostile environment that the jobs aren't going
to be here. And how do they make the environment hostile? Well, first
of all, by too much in taxes, and the second thing, of course, is too
much spending.
Here's a containment dome. We've had some trouble with oil leaking
out of containment domes. And here's one. This is a containment dome.
There's another containment dome, and it's not working either. It sure
isn't working. Take a look at the rate of the spending that we've been
doing. And the spending is always followed by, of course, a whole lot
of taxation.
And so the first thing is, if you want to get this thing back on
track, if you want to do the opposite of job killers, you want to
create jobs, then what you need to do is you want to cut your taxation.
This is one of those things I started out by saying I wish the
Democrats would learn from the other Democrats, and one of them they
could learn from was JFK. JFK had a bad economy and he did the right
thing. He cut taxes. And when he cut taxes significantly, guess what
happened? More jobs, stronger economy.
And the funny thing is--now this is sort of odd. If you cut taxes,
the Federal Government will actually take in more money in revenue than
if you didn't tax it. Have you thought about that? It's almost
counterintuitive.
Mr. GRAVES of Georgia. Well, it explains exactly what we need to do.
You're right. It's counterintuitive, but it works. Just as if that were
to work, then the opposite must be true if you increased taxes. That
means your revenue decreases. There is a great illustration in the
State of Georgia. They're trying to increase the tobacco tax in order
to fill a budget hole. But prior to that, the administration here had
raised tobacco taxes. And as a result of the raise of tobacco taxes
from the Federal level, income of the State tobacco taxes had decreased
by 20 percent.
Mr. AKIN. So let's do that again, because these numbers are
interesting.
You're saying Georgia basically did a little experiment along these
lines. It was a specific tax on one product--that is, tobacco--and they
increased the tax on tobacco.
Mr. GRAVES of Georgia. They were proposing to increase the tax on
tobacco. Then they looked, and they looked at what had happened just
prior to that. And it was the year before, and it was the
administration here that actually raised taxes on tobacco. And as a
result of that, the revenue for the State of Georgia actually declined
20 percent. Without the State of Georgia raising taxes, the Federal
Government raising taxes, but the State of Georgia's taxes that they
would normally collect from tobacco actually declined by 20 percent.
This shows that when you increase taxes, you actually--productivity or
consumption, all of those things, decrease and therefore it's more
damaging to the economy.
Mr. AKIN. I was trying to explain that to some--because I give some
of these talks to my constituents, and one of the ways I try to explain
it is let's say that you're king for a day and your job is to tax a
loaf of bread and you want to get as much tax revenue as you can by
taxing bread. And so you go
[[Page H5607]]
through this little exercise in your mind and say, I can tax the bread
$10 a loaf or one penny a loaf. If I taxed at one penny a loaf, nobody
would notice, and I would get a penny times all of those loaves of
bread. But if I got $10 on a loaf, wow, I could make a lot of money,
but then maybe nobody would buy any bread because it's too expensive.
So common sense would say somewhere between a penny and $10 you're
going to come to an optimum place where you can get the most tax on it
and people will still keep buying bread. If you increase it, you
actually lose revenue; If you decrease it--so there's an optimum spot.
And what's happening is the government is taxing people so much, by
increasing the taxes, it basically stalls the economy and so their
revenue drops.
Now, if I were a happy socialist, if I were really one of these guys
that wants the government to do everything for everybody----
Mr. GRAVES of Georgia. Is there such thing as a happy socialist? I
mean, help me with that.
Mr. AKIN. That's the trouble. There aren't very many of them that are
happy because they're so worried about somebody else making money that
they don't think--if I were a happy socialist, I would want a strong
economy so I had more money to swap around to my buddies, you see. But
instead what we're doing is we raise the taxes so much, it kills the
economy and we don't have as much money to work on.
Now, the Federal Government doesn't notice it so much, but State
governments that have balanced budgets--Missouri has a balanced budget
amendment. We have to balance a budget. And if you're a legislator or
Governor, particularly in a State that has a balanced budget--and most
of them do--when you have a recession, it is a tough time to be the
leader of your State because people hate you because you have to keep
cutting things to keep the budget balanced. Of course, down here, we
just let it go.
Mr. GRAVES of Georgia. It's that print, spend, and borrow mentality
down here.
What you were referring to a minute ago, there's a line of
demarcation that I refer to as the tipping point that occurs. And
whether it's an economy or anywhere else, there is a great book written
on that very subject matter of how that occurs throughout time in
various ways.
So what we need to do right now is look for solutions that tip the
other way. I think we Republicans are certainly the ones for less
taxes, less government, personal responsibility, and it's those
positive solutions that I think Americans are looking for right now.
They're looking for that glimmer of, I guess, sunshine out there that
says we're going to get through this.
I'm telling you, we are going to get through this. We're going to get
through this as Americans together working hard, once again, dreaming
and not being dependent on the Federal Government to be the solution.
Mr. AKIN. You're absolutely right. I like the idea of being positive.
And the solutions, one of them was JFK. He cut taxes, and the
recession, after a period of about a year, turns right around and
things go along well. Ronald Reagan did the same thing. Massive tax
cut. As soon as he did that, the economy--takes a little while--the
economy turns right around because there's money now being invested not
in more big government but the businessman puts that money into
different new ways of creating, buying another milling machine, another
wing on the building, more money for research and development to come
up with a better way to make a product. And all of those things
together, when the money goes back to the small business man, they
start to hire people.
I think--what is it?--companies with 500 or fewer employees employ 80
percent of Americans. So if those smaller businesses from 500 employees
on down, if they got more money to spend on their own business, that's
part of the solution. And everybody does better when that happens.
Of course, another thing that kills jobs is this insufficient
liquidity. The businessman can't borrow money because it's all tied up
in banks. Of course, we've got that problem going on now, too, and part
of the reason is the government is gobbling up so much money with their
incredible, incredible level of Federal spending which, once again, we
point to this chart. This is what's happened under Obama the first 2
years of his Presidency. It's three times more deficit than Bush, in
his worst year, had.
So this liquidity is a big deal to the businessman. And the banking
rules right now make it hard for small business men to get liquidity.
And as you mentioned, the economic uncertainty. Who is going to take a
risk when you see the lineup of what's happened to us? First of all,
you've got Wall Street bailout, and then you've got Cash for Clunkers,
and you've got this stimulus bill where we waste $800 billion.
{time} 1820
And then we passed cap-and-tax at three o'clock in the morning. It
was supposed to be about how bad CO2 is, and what's the
solution to the bill to keep CO2 down? You guessed it, a
whole lot of taxes and a whole lot of red tape and government
regulations
Mr. GRAVES of Georgia. Those taxes are only on Big Business, right,
that wouldn't impact the consumer? That seems to be the argument that
is put out there, but we all know that it's not Big Business that pays
taxes. It's not the corporations that pay taxes. It's all passed down
through the consumer through the cost of any goods and services as any
other cost would be in a service or in a product.
But I've been here 30 days. Thirty days I've been sworn in here as a
Member of Congress.
Mr. AKIN. We are glad to have you, too. We wish we had some more
people who would vote along the lines of getting these jobs going and
getting the economy going.
Mr. GRAVES of Georgia. It is an honor to represent Georgia's Ninth
Congressional District. I tell you, in Georgia what an incredible
State. I know your State is great as well. But we have 13 Fortune 500
companies, three Fortune 100, the world's busiest and largest airport,
the fourth busiest port in the Nation, an incredible university system
and so much when it comes to entrepreneurial sprit.
Mr. AKIN. But you haven't mentioned Georgia peaches yet. You've got
some good peaches down there.
Mr. GRAVES of Georgia. But a great State, so much to work with there,
but there's that uncertainty that lies out there.
So in my 30 days here, the House voted on TARP II--of course, I
opposed that--the expansion of unemployment benefits to a far-reaching
amount, and then the war supplemental budget which was 61 percent un-
war related, and it goes one thing after another, whether it is
financial reform or whether it is this reform or that reform, just in
my 30 days. So there is a little bit of certainty out there in the
business community.
The certainty is that something's going to come down from Washington
that's going to put another burden on them, another tax on them and it
is killing job creation today. It's time to change that certainty
around and say you can be certain that coming out of Washington it's
going to be less taxes, less government, personal responsibility, and
liberty and just for all. Let's get back to free markets and
capitalism.
Mr. AKIN. That's what it boils down, too, isn't it? Two different
visions for America. One of them is there are all these people who are
victims and the government has to take care of them and you don't have
to be responsible and you are just going to be part of this permanent
welfare idea. And I don't think Americans by and large really want
that. I think Americans really like the idea more of having the courage
to live some dream that God puts on their hearts.
You know, the way that this country was founded, they believed that
every single person that God created in this world had some purpose,
some job that God had in mind for them to do. So what they did was they
came up with the idea that the only thing that you got in trouble for
up in New England was if you didn't work. You see, over in Europe they
had all these classes and they had certain people who didn't want any
calluses on their hands because they didn't like the idea of working.
But the people that came to this country said, no, your job is to
work hard because God made a job for everybody to do. In the process of
doing
[[Page H5608]]
that, they created almost a classless society because how can you look
down your nose at somebody else if God made one person to be an
accountant, another person to be a blacksmith, another one to be a
farmer? How could you look down your nose if somebody is doing what God
called them to do?
But it was always the idea of hard work and being honest and so
people could be free and chase the dreams that they had in their heart.
But I don't think people are happy when the government is dishing them
out, you know, always dependent on the government, you see, and I don't
think that's what America is all about. I don't think Americans are
happy with the system where they're just constantly going to be
dependent on the government. I think people love freedom in this
country.
As you talk to people around your district, I ask people if you had
to summarize what is America all about--I love to ask that question.
Let's say somebody from some foreign country came and they had a bunch
of TV cameras and put it in your face, and you've lived in America. Can
you tell me just in a sentence what is the basic secret of what makes
America such a special place. And the word that I always hear is
freedom, freedom. It is not like, no, that the government's going to
take care of me. No, it's the idea of being a free person, and that's
something that's so precious to us in this country.
Mr. GRAVES of Georgia. You're right, and it's great, and that's what
we've got to get back to is allowing the freedom to succeed and the
freedom to fail, wouldn't you say? I mean, that is a freedom as well.
Not government bailouts and government taking care of businesses that
make poor decisions or take a risk that just doesn't work out, for
whatever reason. But, you know, when we think about where we are going
in the future--and I think we've got a great future--we just have to be
positive. We have to come up with positive solutions and solutions that
aren't the government being the solution but empowering the private
sector.
We've come into a new era I believe, and I believe it's coming. I
would like to say the sun is setting on an era, and that's the era of
the champions of government, that the sun is setting on that and now a
new dawn is arising and that is going to be the champions of the
taxpayer.
So as we move forward through these next weeks and this great recess,
I think America is waiting for this Congress to take a recess so that
they will stop passing policies that are damaging to small businesses
and elect a new governing majority here coming up soon and we have
positive solutions that just reduce the business owners and, once
again, empower them to be the job creators instead of empowering
government to be that.
Mr. AKIN. You know, when people make a mistake--we were talking quite
a bit about socialism, and liberals really just hate it when you
mention that word ``socialism,'' but really an awful lot of Americans
don't know socialism when they see it. And it is very dangerous, it's
deadly, and it goes to the idea of what's the job of the government.
And if you go to our Founders, right off the bat the Pilgrims had
socialism imposed on them by the loan sharks from England, and they
pitched it out. They knew it wasn't any good. They knew that socialism
was really a system of stealing where the government would take from
one person and give to another person. If you go to the founding of our
country, it was built on a bright vision. There was a fresh air; there
was a vibrancy and enthusiasm because you could fail. There was an
incentive to do well.
The understanding was that the job of the government was limited and
limited in a particular way, and that was, the job of the government
was justice. And Lady Justice was depicted--they chipped her out of
marble, you know, and she's sitting there and she always had
this blindfold over her eyes and she held up the scales, and the scales
were what the law says and your own actions. But she always had that
blindfold on. Well, what did the blindfold mean? Well it meant when you
came before the government, before Lady Justice, she didn't peek
whether you're black or white or male or female, rich or poor. She just
said this is the way the law applies evenly to all people.
But socialism does something different. Lady Justice peeks and says
this one's rich, this one's poor. I'm going to take from this one to
give to this one and then we get sophisticated and we steal from
everybody and pass it around to everybody else in the government. It
gets more and more inefficient, but Lady Justice is peeking. That's
socialism. It's wealth redistribution. It is institutionalized debt.
It's morally wrong, and worst of all, it doesn't work.
Mr. GRAVES of Georgia. Right. And I believe Bastiat over 150 years
referred to that as ``legalized plunder'' in the book, ``The Law,''
where he knew that anyone that was taking without permission and giving
to someone else was plunder. And in the case of taxation here in the
United States and the raising of taxes that we're going to see in
January 2011 just due to the inaction of the leadership here in
Washington, that is an increased legalized plunder that is going to
occur.
Mr. AKIN. Which really kind of wraps back around. I promised when we
started we'd ask a couple of these really basic questions, that is, Can
the government steal? A lot of kids say, well, the government can't
possibly steal. The fact of the matter is the government can steal when
the government does stuff that it's not its job to do. And one of the
things it's not its job to do is to take something from one person and
give it to someone else and that's, of course, what the President said
that he wanted to do with the government. He announced that before he
was elected that that was his plan, to take money from Joe the plumber
and give it to someone else.
And, of course, he said he wouldn't tax anybody that made less than
$250,000, and yet that silly cap-and-tax bill that we passed in this
Chamber before you were here--you don't have the shame of having that
having gone through here--but if you flipped a light switch, you start
paying a tax. You know, it isn't a matter of 250,000 bucks, you flip a
light switch you're going to be taxed.
And that socialized medicine bill, wow, is that ever a disaster.
They've got taxes in there on wheelchairs. I thought I saw a taxing on
everything that moves or doesn't move, but they've even got taxes on
wheelchairs in that thing, and of course the problem is that's what
kills jobs. It's messing the economy up, adding to the insufficient
liquidity, the economic uncertainty and of course the red tape and
government mandates.
You put this package together and you can go both ways. You can have
a vibrant economy, people free and prosperous and out there chugging
along, good economy, or you can just keep on dialing in more and more
government interference, more tremendous levels of spending, and
basically what you're doing is you're killing freedom.
{time} 1830
Mr. GRAVES of Georgia. When you think about it, imagine if you had
the opportunity to implement the policies that you felt were best to
get jobs moving forward here in this Nation. If it was me, I would say,
let's empower the private sector. Let's allow them to be the job
creators, not government. Let's reduce the tax burden. Let's start with
the capital gains tax, the corporate tax rate, as well as many of the
other tax rates involved in there. But then not only reduce taxes, cut
spending. You have to cut spending in association with those tax cuts.
In addition, we need to cut it beyond because of the spending level
that we're currently on. But when you think about spending, everyone
around here says, well, you can't cut spending. And you have to ask the
question: Are we running at an efficient level here as government? We
know the answer. The answer to that is no. In my opinion there are no
sacred cows. It is time to cut government and cut it and cut deep when
it comes to cutting government. Americans all across this Nation are
cutting their budget, and there are a lot of important things in their
budget. I believe it's time for the Federal Government to cut their
budget tremendously, reduce taxes, reduce the regulation, and let the
private sector once again flourish.
Mr. AKIN. I think you're absolutely right.
The idea, though, that we can bring the level of spending that we've
got
[[Page H5609]]
going on under control by just trying to get efficiency, I think that's
probably optimistic. I think what we have to do is decide that there
are some things that Washington, D.C. should not be doing in the first
place. We shouldn't cut it; we should just totally eliminate it. It
should just stop. None. We need to take a good look at our Federal
spending and say, What are the things the Federal Government has to do?
We have to defend our Nation. We know that much. Because the States
aren't going to do that. We have to make sure there's no pirates on the
high seas. There used to be a law, it was one of the few Federal laws
against piracy on the high seas. There was a Federal law when America
started that was against counterfeiting, because that was not a State
job; that had to be a Federal job.
There are very few jobs that originally started at the Federal level.
And then everything else, we have to push them back to the States. I
would be happy to say, look, if the people of California, or
Massachusetts, or Tennessee want to have socialized medicine, let them
try it and see how it works. They could learn from Massachusetts. It
didn't work well. They could learn from Tennessee. They about shut down
medicine in Tennessee. If States want to try these things, let the
experiments begin at the State level. But at the Federal level, we have
got to basically stop a lot of stuff. The first place I would start
with would be just what Ronald Reagan said, shut down that Department
of Education.
I had a group I was talking to down at a Honda dealership just a
couple of days ago and I asked them, How much benefit do you think
you've gotten from a whole bunch of Federal bureaucrats that work in
the Department of Education? Has it helped your kid any at all? There
were these blank looks. No, I don't think it's helped a whole lot.
So what happens if you sell the building and just shut down the
Department of Education at the Federal level? Why can't that be done at
the State or local level? I think we have to ask those tough questions.
Maybe you could make a case, gosh, it would be nice if; but we can't
afford it.
Here's a number: Debt and deficit as a percent of GDP. This is
deficit. Here's the United States. We're right alongside of Greece and
Spain and the United Kingdom. We're right in there with these European
countries that are struggling, and we're not much better off than they
are. We're way overspending.
Here is debt as a percent of GDP. You've got the United States. There
are only two other countries that are worse than we are, that's Greece
and Italy.
Mr. GRAVES of Georgia. If you had to simplify that for the American
viewers out there, and I see that says about 91 percent of our debt as
a percentage of GDP. How would you simplify that in terms of the
average household at home and they have income coming in, their pay as
it relates to debt?
Mr. AKIN. Let's try and speculate a little bit. Let's say the income
for the whole year, they make a hundred bucks. So what does this mean,
91 percent? If their income is a hundred dollars for the year, what
does that mean? That means they've got an incredible level of debt.
They're not going to get back out from under it hardly.
Mr. GRAVES of Georgia. You're saying that 91 percent of that goes to
debt; that income has to go to debt.
Mr. AKIN. That's the problem.
Mr. GRAVES of Georgia. If the liability was called in at that point.
It is a liability of 91 percent.
Mr. AKIN. Yes.
So the point is, what do we do here in America? We basically have to
stop thinking that the Federal Government is God and that it's going to
solve every problem. We've got the Federal Government now, they're into
the automobile business, the insurance business, the student loan
business, they're in the flood insurance business, they're in the food
business, they're in the housing business.
It kind of reminds me, there was this country that I grew up paying
close attention to in the U.S., and it had this philosophy that the
government is going to give you food, and it's going to give you a
place to live, some shelter, it's going to give you an education, the
government's going to give you a job and it's going to give you health
care. We looked at that country and thought, That's not going to work.
And it didn't work. The whole country crashed economically. It was
called the USSR.
Here we are today, and what does the Federal Government try to do?
Give people housing and food and education and a job and health care.
How are we different? What we have to understand is the Federal
Government has to be reined in to do just what it's supposed to do,
which is justice. That is, provide a set of laws where everybody is
equal before the law and a national security that protects us from
terrorists and other people that wish us ill. So that Federal
Government is just going to have to go on a diet.
Mr. GRAVES of Georgia. That's right.
I've only been here 30 days and I can tell you, this government is
way too big. It does not run efficiently. There are many tasks that it
should not be involved in whatsoever. We've seen those pass this House
just in my few short weeks of being here. As I think about where we're
going and I think about the solutions that we're all seeking, the
Economic Advisory Council that I've put together across the 15 counties
of the Ninth Congressional District is going to be one of the most
dynamic councils I believe we have ever seen, because these are the
business leaders, those that are on the ground hiring and making
decisions for their business, that are making tough decisions; what to
cut out of their budgets, what hours are they going to operate, what
supplies are they going to buy. And we're asking them that question,
What is keeping you from hiring that next employee? Because it goes
back to that, if one out of three businesses would just hire one person
in the next 12 months, unemployment would be cut in half. That's how
close we are.
So what is it that the government is doing to prevent you from hiring
that next employee? I am excited that soon I will be bringing back what
I believe are going to be some powerful recommendations to the House of
Representatives right here and say, From the Ninth Congressional
District, from the business leaders in north Georgia, here's what they
say needs to be done in order to get this economy back on track.
Mr. AKIN. I think you and I have a pretty good idea what they're
liable to say, because they have enough business sense to know what's
happened historically. They know socialism doesn't work, and they know
what you've got to do is as the jobs and wealth and freedom, those are
things that come from free people. It isn't the government that makes
jobs. It's the businesses. It's all of the innovative Americans that
are out there, that are living that dream in their heart. From the
beginning days of this country, there are these people, these crazy
people that came to this land with some dream of something they wanted
to do.
I remember there was one guy that had this idea, he wanted to build
light bulbs. He built a hundred of them and none of them worked. His
attitude was, now I know a hundred ways not to build a light bulb.
These crazy people came with these dreams in their hearts, the dream
became a vague possibility and eventually it became a reality, and
America was built, one dream at a time. It got to be so common, we
called it the American Dream.
I know, gentlemen, as you travel in Georgia and you talk to those
people, that you really get to love them out there, and you hear the
stories:
``Well, my wife and I were sleeping under a park bench, but we had
this idea for a little business. That was 20 years ago. Well, now, my
goodness, we've done pretty well. The kids are in good shape. We've got
a nice house. I think I might be selling the business.''
We do this, this, or that. Who would have thought it? We've got one
guy in Missouri. He started a little company called Innoventor. I love
this story. Talk about somebody with some imagination. He had grown up
on a hog farm. Some of us that are from suburbia, we're not too fond of
the by-product of those hog farms. But he had a lot of that by-product
kicking around trying to figure out what to do with it. And so this guy
took all this pig manure and he put it into a tank and he ran the
[[Page H5610]]
temperature up and the pressure up in the tank according to some basic
principles of the way that we work with petroleum products and figured
out a way to turn all that pig manure into this thick oily sludge which
they then use to make asphalt.
And so he's got a section of road in the State of Missouri that's
paved with asphalt made from pig manure. Of course the first question
is, does the road smell? He says, No, when you get it up to this
temperature, all the ammonia and things that you associate with smell
is gone. But here's a guy that took something that nobody wanted,
people looked at it as a liability, and he's got an invention that's
going to turn that pig manure into asphalt to pave our roads with.
That's the kind of thing that makes America. I thought that was a
colorful example. I know you've got stories of your own from Georgia.
My brother was a Ramblin' Wreck from Georgia Tech. I know they've
trained some good engineers down there.
{time} 1840
Mr. GRAVES of Georgia. There are great talents and opportunities in
Georgia. And as I know we are wrapping up our time probably here, and
as I sort of close out, it goes back to that zero sum. It is a zero sum
game when it comes to employment.
You are either expanding the private sector, or you are expanding the
governmental sector. And I believe our objective, and I am glad that
you are of like mind with me, that as we consider the deliberations
over the next several weeks, that those who are watching tonight know
that there are two men, plus more here, who really want to see the
private sector expand, and expand through innovation and the excitement
of the idea.
So I sort of liken it to the flame. There is that entrepreneurial
flame out there. It has been dampened. It has been dampened quite a bit
over the last 15-16 months with the policies coming out of Washington,
and I believe it is our objective and I believe we can do this.
It is time to once again fan that flame and get that dampened spark
flamed back up and get that entrepreneur fired back up about that
American dream that you just spoke of.
I will close with this story, because my son who is 10 shared with me
the greatest illustration last year. We were debating allowances. We
were talking a dollar for this task and a dollar for that task. And he
stopped me and he said, dad, if you give me a dollar to do something
that I should already be doing, doesn't that just take away from what
mom can buy groceries with? Wouldn't it be better if I made something
and sold it and added to the family?
I mean, what a phenomenal example from a 10-year-old boy who
understands productivity and wealth accumulation. That is something
that excites me, that that young generation gets it.
Mr. AKIN. Well, you know, that is a heartwarming story, and it shows
the basic nature of your 10-year-old son. He understands that somewhere
along the line, that he was made to do something, and even that God
maybe has a plan for him, and his thinking was, I want to help my dad.
You know, there is nothing I think as a Christian that inspires me
more than a passage in the Bible that is in Ephesians. It says that we
are God's workmanship created in Christ Jesus. That means that each one
of us is a unique and special person.
But not only that. Here is what exciting. He says unto good work
which God prepared for us to do, every single one of us has a purpose
in this world, and the purpose is to do some good work, which our
Father wants us to do. And it is a pretty exciting thing if you are not
cynical to say, you mean I can actually do something that would please
my Father in heaven?
You see, I think the freedom that we treasure in America was given to
us so that we could do that mission that we were created to do. That is
what freedom is all about. It is not to abuse, not to have the
government take from one person and give to another person. It is about
each one of us doing what we were called to do and living that American
dream.
Then as the country builds and becomes strong and we have this
attitude that everybody has a purpose, everybody, there is no one that
isn't included in that, and that the freedom we enjoy is freedom so
that we can do what we were created to do in the first place. When we
have that kind of attitude, it gets contagious, and all over the world
people are going to say, hey, look what is going on in America. Isn't
that exciting? Those people really do believe in freedom. They
understand the difference between socialism, which is big government
doing something that is stealing, it is dishonest, and allowing people
to follow their god-given direction.
That means as you said though that people will fail sometimes. We
try, we fall down, we have to get up and try it again. If we didn't
understand that, none of us would know how to walk. We fall down the
first few times. And I found that out trying to ski as well. You know,
there is a part of my anatomy that worked as a brake for quite a while.
It got pretty sore.
But we keep getting back up again, and that is necessary in a free
kind of society. But I think America loves that sunlight and bright
light of freedom and that fresh air and the enthusiasm of the
challenge, and the fact that every one of us has a purpose that we were
put on this earth to do.
The Lord has given us the simple commandment, thou shalt not steal,
and when somebody takes something from one person and gives it to you
and you didn't earn it, you see, that is short-circuiting the way God
made everything, and that is why it didn't work. It didn't work for the
Soviet Union, it hasn't worked in these other countries.
Socialized medicine doesn't work. Yes, you get insurance, but you
can't get any health care. That doesn't do you any good.
Well, I appreciate your joining me, and thank the good citizens from
Georgia for sending up such a great Congressman, Congressman Graves. Is
a pleasure joining you.
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