Eight months after Congress passed toxic asset relief, a growing number of Americans, including many in Congress, are questioning government bailouts. Furthermore, a poll shows more Americans want the President’s stimulus spending program halted. Both programs have thus far failed to achieve their goal of strengthening the economy and their ballooning of the federal budget deficit will ultimately do more harm than good.
by Congressman Mike Turner
Eight months after Congress passed toxic asset relief, a growing number of Americans, including many in Congress, are questioning government bailouts. Furthermore, a poll shows more Americans want the President’s stimulus spending program halted. Both programs have thus far failed to achieve their goal of strengthening the economy and their ballooning of the federal budget deficit will ultimately do more harm than good.
I opposed the $700 billion in government bailout funding for Wall Street last October and also voted against the $800 billion stimulus spending bill that was passed earlier this year. Neither program has provided working families, including many in southwest Ohio, with the recovery funds they need to get back on their feet after job losses and unprecedented home foreclosures. Instead, government money was used to bailout the bad behavior of companies such as AIG, and for the controversial government take-over of General Motors. Additionally, the majority of the stimulus funds have yet to be spent despite promises from the Administration that the money would be quickly used to jump start the economy.
The news of how AIG gave generous executive bonuses and lavish corporate retreats after it received bailout funds enraged most Americans. Furthermore, the government’s eagerness to acquire control of a major corporation, forcing it to downsize and shed jobs, has further alarmed the nation. Rasmussen reported last week that 45 percent of Americans favor cancelling the economic stimulus program, compared to 36 percent who still favor it. Most also believe that the stimulus will not create new jobs and will be bad for the economy. What’s more, according to a June 9 Fox News poll, 58 percent of Americans disapprove of the government take-over of General Motors.
As the country struggles to recover from a deep recession, the federal government’s response – colossal new spending – will only slow the national economic recovery. The President’s own budget projects the federal deficit will grow to nearly $1.75 trillion by the end of this fiscal year. The national debt today is over $11 trillion, equaling $37,000 for each U.S. citizen. In order to pay for this unprecedented new spending, the government will have to expand overseas borrowing and increase taxes. This risks a prolonged economic downturn and a heavy tax burden for Americans and their children.
While the government should have a role in stabilizing the economy, it must not overreach and impede potential recovery through massive new debt and government intervention into the private sector. Serious questions are emerging over the government’s exit strategy in its ownership of General Motors. Also unclear is the government’s intent to continue to bailout companies despite the fact that TARP funds were approved by Congress to provide financial liquidity for loans and not to serve as a revolving account to selectively acquire and control major companies.
Last week, House Republicans unveiled a plan to reform the financial regulatory system. The new plan would put an end to bailouts and ensure that the government stops rewarding failure and picking winners and losers. It would restore market discipline and make clear that financial firms cannot expect Washington to cover their losses and bad behavior.
I opposed both the TARP and stimulus funding because they spend money we don’t have on programs that will not stimulate the economy. The lack of focus on the real need of our communities for assistance during these tough times is very disappointing. However, I remain committed to working with my colleagues to seek a solution that will both restore our economy and provide meaningful relief to workers and homeowners.