[Congressional Record (Bound Edition), Volume 156 (2010), Part 11]
[House]
[Page 15634]
[From the U.S. Government Publishing Office, www.gpo.gov]




                     CONTINUING ON THE ROAD TO RUIN

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from California (Mr. McClintock) is recognized for 5 minutes.
  Mr. McCLINTOCK. Mr. Speaker, throughout what was supposed to be a 
recovery summer, the President has repeated a familiar theme, that the 
Republicans ran us into a ditch and now they want the keys back. That's 
an important point. We need to understand exactly what it was that the 
Bush administration did to run us into a ditch.
  In fact, President Bush made two major policy blunders. The first was 
to preside over unprecedented regulatory intervention into the housing 
market that deliberately enticed people who couldn't afford homes to 
buy them anyway. At the same time, these policies deliberately 
encouraged lenders to make irresponsible loans by promising them that 
Fannie Mae and Freddie Mac would cover the risk. This created a massive 
artificial housing bubble that ultimately burst with catastrophic 
impact.
  But my question of President Obama is, if we know that this road 
leads to ruin, why does he continue down it at even higher speeds? 
Failing to learn from the damage that government intervention does by 
creating artificial bubbles in the economy, the President has repeated 
and amplified Mr. Bush's blunders not only in the housing market with 
mortgage subsidies and home purchase credits, but now also in other 
markets like automobiles and home improvements. Each time he has 
squandered billions of dollars merely to borrow from future demand, 
leaving behind economic craters each time these bubbles have burst.
  President Bush's second blunder was to increase Federal spending at 
an unsustainable rate, transferring economic decisions from the 
productive sector to the government sector and crowding out the capital 
market by excessive government borrowing. Now remember, the first $168 
billion stimulus bill was a Bush brainchild. That's when we all got 
those $600 checks. If massive deficits and record government spending 
create prosperity, well then the final Bush years should have produced 
a golden age for the American economy. Has the President reversed these 
irresponsible Bush-era policies? On the contrary. He has amplified and 
expanded them.
  In his first 19 months in office, this administration has run up more 
publicly held debt than all 8 years of Bush combined, with a promise 
that this would keep unemployment under 8 percent. Yet all this has 
accomplished is to crowd out trillions of dollars of capital that could 
otherwise have gone to employers to add jobs or to homebuyers seeking 
to re-enter the housing market or to consumers seeking to make consumer 
purchases. Thus, instead of the sharp V-shaped recovery that normally 
follows a recession, America is now entering its third year of economic 
distress.
  The reason these policies have not worked is because they cannot 
work. They didn't work under George W. Bush, and they have not worked 
when Barack Obama doubled down on them. The core of Obamanomics is the 
proposition that, if government can inject enough money into the 
economy, it can stimulate consumer spending and, therefore, demand for 
production.
  Unfortunately, government cannot inject a single dollar into the 
economy that it has not first taken out of the same economy. It's true, 
if the government takes a dollar from Peter and gives it to Paul, Paul 
will have an extra dollar to spend--but Peter now has one less dollar 
to spend in that very same economy.
  On paper, the economic effects of income transfers always net to 
zero. In practice, transfers net to much less than zero because they 
shift huge amounts of capital away from decisions that would have been 
made in the productive sector based on economic return towards 
decisions that are made in the government sector based on political 
return.
  We see very clearly the government jobs that are created when 
government puts that dollar back into the economy. What we don't see as 
clearly are the productive jobs that were prevented from forming as 
government first takes that dollar out of the economy. We see those 
lost jobs reflected in a chronically high unemployment rate and a 
stagnating economy.
  It's time that we stopped wrestling for the steering wheel and 
recognized bad public policy for what it is, whether the driver is a 
Republican or a Democrat. The problem is not the driver but the 
direction, and the direction hasn't changed.
  We all know the road to prosperity. We've taken it before. When we've 
reduced the burdens on productivity, the economy has blossomed. It 
worked when Ronald Reagan did it. It worked when John F. Kennedy and 
Harry Truman did it. And it will work again, but we will need leaders 
with a far better sense of direction than what we have today.

                          ____________________