[Congressional Record Volume 168, Number 125 (Wednesday, July 27, 2022)]
[House]
[Pages H7245-H7247]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                             ECONOMICS 101

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 4, 2021, the Chair recognizes the gentleman from Arizona (Mr. 
Schweikert) for 30 minutes.
  Mr. SCHWEIKERT. Madam Speaker, one of the reasons and one of the 
focuses for tonight's presentation is I am just frustrated because of 
the silliness that not only has become this body but even when you 
listen to the White House, Madam Speaker.
  So the White House is terribly concerned that on Thursday we will get 
the latest statistics from the Bureau of Labor Statistics. I believe it 
is on second quarter GDP. GDP now is the Atlanta Fed calculator. It is 
a wonderful app if you want to look at it.
  It is basically saying: Hey, we may be negative, and when we were all 
in high school they said that two consecutive quarters of negative GDP, 
well, that is a recession. Technically it is not. Yes, there is a 
committee that decides it. That is what we argue about.
  Has this place lost its mind?
  So the press cycle becomes: Oh, are we in recession or not?
  It is not, technically. If it goes negative it will be a recession. 
But isn't this horrible that we are talking about this?
  Let's just pretend and stop worrying about it and actually let's try 
something unique.
  Could we actually talk about what is happening to people, what is 
happening to the country, what is happening to the budgets, the debt 
and the deficits, the actual thing that will either make or break 
society, which will make people's lives more miserable or more 
prosperous?
  Because right now we are in avoidance of all the big things.
  But we do have some great virtue signaling bills. I mean, I had the 
blessing earlier today of my telehealth bill being stolen from me and 
handed to another Member because, well, we needed the politics.
  Hey, good job, majority.
  But I have to give Democrats credit. They have done some amazing 
things in, what, their 16, 17 months of absolute control, when they won 
the House back in the 2018 election.
  So this is a chart I have had here multiple times. Yes, it is all 
beaten up. The number is from, functionally, the 2021 CBO numbers. A 
couple of hours ago we got the updated numbers.
  For anyone wanting to know why I am using tape, apparently it is 
against House rules for me to reach over and use a big marker and write 
on the boards.
  But the number we had been operating with is in, functionally, 29 
years we are going to have $112 trillion of debt in today's dollars--
not inflation-adjusted dollars, but in today's dollars--and it is 
almost all Medicare and Social Security. The rest of the budget is in 
balance.
  A couple hours ago--and I have only made it through the first dozen 
pages of the new CBO report, and you can get it online, Madam Speaker, 
it is only 90 pages--we moved from $112 trillion last year to--
congratulations to the Democrats, they got us to $138 trillion--$138 
trillion of borrowing in the next 30 years in today's dollars.

                              {time}  1930

  Now, the reality, we are never going to get there. We will blow up 
before that. But this talk, the virtue signaling, the insanity of this 
place, well the Democrats are getting in; we are going to pay for 
everything. We are going to do policies that are fiscally sensible.
  Well, okay. Congratulations. CBO just actually took us from $112 
trillion to $138 trillion on the math. It is just stunning. Does anyone 
around this place give a damn?
  And maybe I am a little on the cranky side. You know, I had a miracle 
happen about 3 weeks ago. I was at home, and the phone rings, and my 
little girl's birth mom had a little boy; so now I have a little boy. 
So my wife and I, we have a 30-day-old baby at home, so there hasn't 
been a lot of sleep.
  And I am holding this little guy, and I am going, he is only 30 years 
old when this happens. And the economy most likely blows up long before 
then.
  Does anyone here care about the next generation? Does anyone here 
care about your own retirement?
  You have got to understand how fast the numbers are rotting away from 
us. But at least we are going to have a debate for the next couple of 
days of are we in recession or not recession.
  Well, technically two consecutive quarters are not technically a 
recession; and the White House cares a lot about that because we know 
that it is about the message and virtue signaling as the economy around 
us is burning down.
  And I am going to show you some numbers here. Could we try something 
new? How about let's go back to a type of misery index? How miserable 
are our constituents? How miserable is America and the public?
  And we are going to look at some slides here that show you just how 
much of people's wages have been stripped from them.
  So a simple slide, and this is from the new CBO, from a couple of 
hours ago. We did our best to put it together, and it is not going to 
make a lot of sense. But basically, what I am trying to show is, $138 
trillion of borrowing in today's dollars. That is a pretty steep curve. 
Every bit of this steepness here that you see here is Social Security 
and Medicare.
  How many of us here are willing--I am the senior Republican, I am the 
ranking Republican over Social Security. We are busting our humps to 
try to come up with a bipartisan way to save the program, in a 
functionally--in a decade.
  If you are on Social Security, you are going to have a quarter of 
your Social Security check disappear. Let alone, we expect, just 
because of inflation, your copay on your Medicare is probably going to 
more than double.
  The number of our brothers and sisters who will be seniors at the end 
of the decade, who will be moved into poverty because of what the 
Democrats have done this last year and a half; does anyone care about 
them?
  And then, this is the stuff we have been able to start to pull out 
from the CBO numbers that should start to scare this place half to 
death. If you start looking at what they call the alternative 
scenarios, and that is actually when inflation or interest rates have 
small variances, and the speed that, if you actually go to the baseline 
scenario, but if you actually start to go to a scenario over there 
where interest rates are just 2 percent, 3 percent higher than the 
predicted average, you actually get in a line here in about 20, 25 
years, every dime of tax receipts, every dime of tax receipts just pays 
interest.
  There is no more government. There is no more military. There is no 
more medical research. There is no more education. There is no more 
Social Security and Medicare.
  How many of you are going to spend your August going home and telling 
townhalls how you are going to protect Social Security and Medicare, 
but you are not willing to actually talk about the real math?
  It is real. This isn't Republican or Democrat; it is math. And this 
place has basically become a math-free zone.
  And look, this is a chart I bring up here all the time because it is 
nice and simple and graphic. 77 percent in 2001, was mandatory. Okay. 
This is Social Security and Medicare. These are things we put on 
formula. We don't vote on any of this.
  Well, about 10 percent of our budget is defense; unlike, I had a 
Democrat just last week saying oh--no, defense is 10 percent of our 
spending. The entire budget that we, functionally, truly vote on, 
discretionary is now to 13. And guess what? This is the `21. The new 
numbers, the mandatory now is about 80 percent of all of our spending.

[[Page H7246]]

  Discretionary, if you adjust for inflation, has basically been flat 
for a decade. There is some stuff we vote on substantially because of 
what Republicans did when we still had control here. We flattened out 
discretionary spending.
  But unless we are going to tell the truth of what is going on here--
we are getting old as a society. Last year was our lowest fertility 
rate in U.S. history.
  And once again, in 10 years, people on Social Security are going to 
be taking one hell of a cut. How many people here, when the political 
class is back in the home district this August, will stand up and talk 
about what they intend to do to save the program?
  So now, let's talk about the current misery. This is what the left's 
policies have brought to people. Earnings lost due to inflation--and 
let's use the Phoenix/Scottsdale area because that is where I live. 
That is my home. That is who I am here to protect.
  And let's just use the since August 2020 date so it is nice and 
simple. You, functionally, have just lost 1.9, almost 2 months of your 
labor. So you are, functionally, almost--in the Phoenix area, inflation 
has been so high, you are almost working for 2 months, and you are 
getting no compensation. You, functionally, have had the value of your 
labor stripped. You have lost a couple of months.
  If I make some of the adjustments, you start to realize you will get 
to work for about 57 days. You get to go 57 days for free.

  So instead of me standing in front of you and saying well, the 
Phoenix has had 12.3 inflation, and if I use CPIW, with the other 
adjustment which adjusts food and fuel, it is 13.1.
  Screw talking about the percentages. Congratulations. Even if you are 
part of the population that has had wage hikes, if I take the average 
wage hike in my community, you are, functionally, working at least a 
month to a month and a half for free, and this has been done to you in 
less than a year and a half.
  Does anyone care about the working people? The people that get up in 
the morning, the retired couple, the young couple that is trying to put 
their home together to maybe 1 day be able to afford a house?
  I have no idea how people are surviving out there. And does this 
place--we are going to have a debate on whether we are technically in a 
recession or not because that is our talking point for the week.
  And look here, I am going to give you two boards here, just to try to 
understand; and we have been trying to adjust, so let's just use 
something like healthcare support occupation. And this is just the loss 
of purchasing power just due to fuel prices. And I even rolled the fuel 
price back down.
  You, functionally, lose, every month, 4 days of labor. You start to 
think about what these costs mean. So let's use that's even bigger.
  Let's actually use--this one I love. Does anyone recognize this? This 
is our congressional calendar. You know, this is the days we are here 
supposed to be doing the people's work.
  Take a look, functionally. Come down here. You will notice a couple 
of months with Xs on it. Those are days of labor you lose. You may get 
your paycheck, but it has no new purchasing power. Actually, it has 
lost purchasing power because of inflation.
  Anyone watching C-SPAN today, how many of you heard people come 
behind these microphones and actually demonstrate they care about you? 
They care about your savings, your retirement, your future, the future 
of my kids, your kids.
  The average working person in my community--because I represent the 
community with the highest inflation in America--has lost 40 days of 
their labor. Their purchasing power has been stripped from them in a 
year.
  And I am going to get a little geeky for a second. Do you know where 
the value has gone? You do realize inflation, basically, benefits 
debtors, and crushes workers and savers.
  Okay. Who is the biggest debtor in the world? We are. The United 
States is the biggest debtor in the world. We are basically--one of the 
wink and nods that are going on, I believe, with the administration and 
the majority here is oh, inflation is bad, wink, wink, nod, nod.
  But it is really reducing the value of the debt in real dollar terms, 
because inflation is a tax transfer from you to the debt because it 
devalues the borrowing by deflating the value of your purchasing power.
  So we strip purchasing power from you, but by doing that, when we pay 
back the debt, when we pay back the debt, the debt is paid back by 
inflated dollars. It is a tax.
  So when the left actually promises--when the President promises, we 
are not going to tax anyone under $400,000; the hell you are not.
  And in my community, you, functionally, have just taxed everyone 12.3 
percent, new additional tax this year. You stripped that value from 
them. And the wink, wink, nod, nod, fancy economists, basically 
realized, hey, but we devalued the debt by that much. So you have got 
the stealth tax.
  And now you start to realize why America is poorer today. So the 
Democrats get elected. We just went through 2018, 2019, first quarter 
of 2020, one of the miracle moments of this country. We closed income 
inequality.
  Wages were growing. Inflation was flat. Poor people became less poor. 
The working poor become more prosperous. The middle class became 
substantially more prosperous. Wages were up, what, several thousand 
dollars in real purchasing power. Every dime of that is gone.
  And look, I am friends with a couple of the Democrats, and they 
despise these floor speeches because it is so uncomfortable to hear 
that their policies have almost been dystopian in destruction. But it 
is math and at some point the math will win.
  And the fact of the matter is, all the progress this economy, this 
society, the closing income inequality, the reduction of food 
insecurity, it is all gone. In a year and a half of, functionally, 
Democrat control, it is all gone.
  You are poorer today than you were the day they were elected. And all 
that progress we made in that '18, '19, the beginning of 2020, from the 
tax reform, the regulatory reform, it has all been stripped from you.

  But yet, we are going to sit here and argue about, oh, are we in 
recession? Oh, is it two quarters? No, you are not technically.
  We will do anything around here to either virtue signal or avoid real 
issues, while people are getting crushed.
  We have got to stop the whining, the small ball around here, and 
start doing something that makes people's lives better.
  And yes, I can go out and snip all of the nice headlines talking 
about, oh, it is not a recession. Oh, you know, God willing, don't 
think we are going to go into a recession.
  Okay. Fine. Let's pretend God's willing. Let's pretend we are not in 
a recession. Let's remove that word.
  How could we then pretend--could we just pretend--you are willing to 
virtue signal on everything else. Are you willing to pretend we 
actually care about people, care about the economy, care about the 
future, care about the debt and the country collapsing because of the 
rate we are borrowing?
  And there are other things in the data that let us know, if you are a 
data geek, and you actually sit and watch the financial news channels, 
and the talking heads, and the spokespeople from the White House, you 
are not being told the truth.
  And how do you make public policy when it is the political theater is 
the only thing that matters?
  It is the spin. We have become an Orwellian body. We should be 
ashamed of ourselves.
  I am the senior Republican for also the Joint Economic Committee, as 
well as being the ranking member, the senior Republican over Social 
Security.
  We have been holding Joint Economic hearings instead of doing what we 
used to do, where the left would have their economists; the right would 
have their economists; we would bring in really professional people, 
and we would try to understand what was going on and how we could make 
society healthier, wealthier.
  Instead, we are going to bring in people and we are going to talk 
about the economics of whatever the pop culture--gun violence today, or 
we are going to talk about--we don't do real stuff anymore. We are 
basically writing people's campaign brochures now.

[[Page H7247]]

  


                              {time}  1945

  This is really important because unless we as a body can get the 
incentives right to get up labor force participation--I know these are 
geeky terms but our brothers' and sisters' participation in the 
economy, I do not believe we can get the productivity back where we 
have to be to take on inflation, to start to stabilize the economy in 
the future.
  We have a problem here. This should have been the trend line. 
Something is going on. We have millions of our brothers and sisters who 
have disappeared.
  Of course, you have a great unemployment number. We have great 
unemployment numbers. They are really low, except we have millions of 
people who disappeared. They are not participating.
  Once again, it is spin through not telling the truth about the math. 
Now, it gets even darker and more misleading. I am sorry to be geeking 
out, but you do realize we have multiple agencies, multiple groups that 
do the calcs of what is unemployment, what is labor force 
participation, and who is participating in the economy, and there is 
some crazy divergence going on out there.
  There is something called the establishment survey. That is what you 
get every week, every month on this month's unemployment--we have 
everyone working. Except at the very same time, there is something 
called the household survey, and that is showing numbers that have 
hundreds of thousands of people who have moved into unemployment.
  How is that possible? How is it possible that two government surveys 
in the same sample times are starting to produce such divergence in the 
numbers?
  I would love to tell you that I know, but I haven't had time to dig 
into this. But there is something going on there. There is some noise 
within our economy, yet we are all pretending.
  This is the talking point the left keeps giving you. Well, we are not 
in recession. Look at the employment data, except, also, I need you not 
to look at the household survey because that number is going in the 
wrong direction.
  Remember, how does the Federal Reserve take on inflation? They break 
the economy. They break the labor markets. They raise interest rates 
like they did today. And the dirty secret is, oh, I don't think we will 
drive it into recession--wink, wink, nod, nod.
  Of course they will. That is how it works. They need to break the 
wage-price spiral, which is real and has begun. You all know what the 
wage-price spiral is, right? Prices go up, so I have to pay my workers 
more. Well, if I pay my workers more, I have to raise my prices. Well, 
if I raise my prices, I have to pay my workers more. Well, if I pay my 
workers more, I have to raise my prices. You end up in this ratcheting 
effect, and we are in that right now.
  A couple of months ago, we would have a debate on the floor with a 
couple of my more geeky colleagues, and they would still want to try to 
say, oh, inflation is transitory. No. It is structural now. It is built 
into everything you are buying.
  Fuel prices go up here, but eventually, the distillates from that 
fuel that are in that mug that holds the milk that you go buy is now in 
the components of production. It is structural.
  That is a real problem because we are trying to do some of the math 
about what happens, God forbid, if we have substantially higher than 
normal inflation for a year. God forbid it is 1 year, 2 years, 3 years, 
even if they start to knock it down, and there you bring the Fed in.
  What is the Fed doing right now? They are jacking up interest rates. 
They are making your life more miserable. They are functionally trying 
to put you out of work.
  They need to raise unemployment. They need to create the elasticity 
in the employment markets. So, all of a sudden, that wage-price 
spiral--you are willing to work for less because you need the job. But 
you already see the data right now of how many of our brothers and 
sisters are just trying to maintain their life.
  Their rent has gone up. They are using their credit cards. Now, their 
credit cards are going to get substantially more expensive because 
interest rates are going up. Now, we are actually seeing articles that 
the Treasury may have to write checks to the Federal Reserve.
  One day, I will do a whole Fed presentation on how it actually works. 
But when they raise interest rates, they are actually raising interest 
rates on what they are willing to pay on bank deposits. Therefore, they 
are paying interest on the bank deposits.
  The Federal Reserve needs to get cash to pay a rate of return on the 
bank deposits, and they get that from the Treasury, which is a little 
crazy, but that is how it works.
  You start to think about the math. I know these are just statistics, 
but they are also people. They are people, and this place has just 
become cruel.
  I guess the virtue signaling here is only done when it is a good line 
for a brochure, and I know it is half an hour of talking about economic 
data, but these are people.
  We are trying to do a breakdown right now of how seniors survive. You 
do realize how many of our seniors, even with the Social Security COLA 
that may be over 8 points, their copay on healthcare--because, 
remember, some of the healthcare inflation has been double baseline 
CPI. Many seniors now have to pay 20 percent of that, so they are 
bleeding.
  The COLA for Social Security doesn't keep up with actual inflation, 
and it is also a lagger. I won't walk through the table, but understand 
we are trying to do the math here of how many of our seniors basically 
are moving into poverty, and we are trying to do something latitudinal 
over a decade. By the end of the decade, what population has just this 
cycle of inflation done?
  On Thursday, when the second quarter GDP number comes out, and the 
White House and Democrats say, ``Oh, we are not in recession. It is not 
a technical recession,'' how many of them are going to get behind a 
microphone and say, ``I don't care whether we are in recession or not. 
I care about seniors who are about to become poverty-stricken.'' How 
many are going to say, ``I care about the family that is having trouble 
surviving.'' Where is the empathy in this place? Does anyone care?

  We make public policy by feelings, by virtue signaling, not by a 
calculator, and I accept I sound like an accountant on steroids. It is 
my sin. But these are people.
  We are going to sit here, and we are going to fuss like crazy over 
little symbolisms. We are going to fight over the naming of a post 
office.
  At the same time, someone is going to go home and realize they have 
to figure out whether they can pay the air-conditioning bill or be able 
to have enough gas to drive down to the food bank. There are ugly 
things happening out there, and it doesn't need to happen.
  We as Republicans have some ideas to stop it. It may not completely 
stop inflation, but at least it would help. The brain trust on the 
other side, the idea is, well, let's send them a check. That is what 
caused the problem.
  Please, can you have some folks that actually showed up for their 
basic economics class be the ones making public policy here? Let's stop 
hurting people. This isn't partisan. This is our job.
  Madam Speaker, I yield back the balance of my time.

                          ____________________