[Congressional Record (Bound Edition), Volume 155 (2009), Part 7]
[House]
[Pages 8400-8401]
[From the U.S. Government Publishing Office, www.gpo.gov]




                         ECONOMIC CONSEQUENCES

  The SPEAKER pro tempore. The Chair recognizes the gentleman from 
Pennsylvania (Mr. Pitts) for 5 minutes.
  Mr. PITTS. Mr. Speaker, what we do here in Washington, the policies 
that we make, have direct economic consequences on the market, on job 
creation or loss, on retirement accounts, and on the financial security 
of the American people.
  For example, yesterday, Secretary Geithner finally released the 
administration's plan for dealing with the troubled assets that are 
dragging down our banks and that are impeding our Nation's economic 
recovery. The market jumped up 500 points.
  Now, we still need to do some work to evaluate exactly how this plan 
will work and whether it is the best plan for the country, but I think 
this is a perfect example of how our actions here in Washington affect 
Wall Street.
  I have a chart here with some data that I have assembled for the last 
30 years, from 1977 to 2009, of market activity, and I want to show a 
broad trend that we see over that time regarding the market's reaction 
to government policies:
  Here on the top, this yellow line, is the Dow Jones Industrial 
Average. You will see the red and blue panels. The colors here indicate 
which party is in control of Congress. So, where you have red, that is 
the control of the Congress, both the House and Senate, by Republicans. 
Where you have blue, that is the control of the Congress by the 
Democrats, both House and Senate. Where you have these slash/slanted 
marks, you have a divided Congress.
  From 1977 to 1995, you see the Dow Jones growing gradually, minimal 
growth. You see when it hits the red panel that it moves sharply up. 
When you have, actually, the dot-com collapse and 9/11 and the divided 
Congress, you see it goes down. When it hits the red, it goes sharply 
up again.
  The next chart down below shows budget deficits from 1977 to 2009. 
The bars above represent deficits. The bars below represent surpluses. 
Notice under President Obama that this last bar, the yellow line, is 
$1.752 trillion for fiscal year 2009. Let me just put that into 
perspective. That single deficit is more than the previous eight 
deficits under President Bush combined. If I could show you the 
projected deficits, they are all trillion-dollar deficits out for 10 
years as far as we can look.
  So I think we need to really question some of the rhetoric we are 
hearing

[[Page 8401]]

about fiscal responsibility about this present administration. These 
deficits have both immediate and long-term consequences. The long-term 
consequences are the debt that we are leaving to our children. In the 
more immediate term, they represent the eroding of our standing in the 
world. They are going to feed inflation and undermine the value of the 
dollar.
  Last month, I met with a delegation of Chinese officials. The first 
question they asked me was, ``Congressman, is America abandoning the 
free market system?''
  I mean the world is watching us, and they have expressed some 
hesitancy about buying more of our debt. I think, when we go in the 
market this year with $2 trillion or $3 trillion in treasuries to fund 
our budget, it is going to be harder and harder to find willing buyers.
  When the rest of the world watches as the U.S. Government takes over 
private businesses, as government spending grows and as the government 
crowds out the private sector and stifles innovation and the 
entrepreneurial spirit on which this Nation was founded, we have 
serious problems. When we take these kinds of actions and make these 
kinds of policies, we are jeopardizing our standing in the world and 
our future.
  How can we be the leader of the free world with this kind of 
government intervention and undermining of the free market?
  I also want to point out here that there is a good lesson here on 
this bottom chart. You see these 4 years right here in a row. That is 
when the Republicans were in control of Congress and when President 
Clinton was in office. For the first time in years, we balanced the 
budget 4 consecutive years in a row, and we paid down on the public 
debt 4 years in a row. Now, Clinton deserves some credit, and the 
Congress deserves some credit, but we balanced the budget 4 years in a 
row.
  The lesson here is that real bipartisanship works. The phony 
bipartisanship of wanting us to come in at the last minute and vote for 
something that we did not have any opportunity to create or to craft in 
the first place will not work. Real bipartisanship works and policies 
matter, and some policies help create an environment in which our 
economy can thrive.
  The government cannot create wealth. The American people, 
entrepreneurs and businesses must do that. Yet the government can and 
at times has implemented flawed policies like spending too much, taxing 
too much and borrowing too much like we are seeing right now. Those 
policies have economic consequences.

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