In consecutive weeks, President Barack Obama has presented two painfully unserious and economically misguided proposals. The first, his $450 billion American Jobs Act, is another stimulus proposal, based on the ill-conceived notion that more government spending is the answer to what ails the economy. The second is the president’s plan to raise taxes by $1.5 trillion on American job creators. Both plans are a far cry from “winning the future,” as the president claims on the campaign trail.
Like the president’s last stimulus, which cost nearly $1 trillion and failed to turn the economy around, Stimulus 2.0 assumes that massive government spending on feel-good projects — with the administration picking the economic winners and losers — will result in job creation and jolt the economy out of its doldrums. This assumption is already a proven loser.
Stimulus 1.0 ended in bad investments, massive corporate welfare, wasteful spending and more debt. What was supposed to keep unemployment below 8 percent, create millions of new jobs and hasten the economic recovery instead stands as a textbook example of the failed liberal notion that we can spend our way out of an economic hole.
The most egregious failure of the first stimulus is the now-infamous case of Solyndra, a Fremont solar energy company, which received a $535 million stimulus loan guarantee from the Department of Energy.
At the time, Obama said such investments were “leading the way toward a brighter, more prosperous future.”
Vice President Joe Biden said, “We are not only creating jobs today, but laying the foundation for long-term growth in the 21st-century economy.”
Solyndra has now filed for bankruptcy and more than 1,000 jobs have been lost, sadly emphasizing the disastrous consequences of economic meddling by the federal government.
Obama then followed up his poor jobs plan with an equally unserious and overtly political deficit-reduction proposal. It relies heavily on enormous tax increases at a time when the economy can least afford them.
Worse, Obama all but ignores entitlement spending, the greatest driver of our deficit. His plans makes no mention of Social Security — which can be made solvent for the next 75 years with just a few relatively easy adjustments — and would reduce Medicare and Medicaid spending by just 3 percent over the next decade. The president’s tax plan will allow entitlements to balloon out of control, threatening not only the solvency of those programs, but our entire economy.
Obama’s focus on small-ticket spending items, such as ending subsidies for corporate jet owners, reveals he is much more concerned about election-year talking points than positive reforms to create jobs and make the economy grow.
Rather than waste our time debating these plans or engaging in political gamesmanship over the deficit, Congress should now focus on how to get the federal behemoth out of the way so that American companies and workers can thrive.
We should push for enforceable spending restrictions (such as the Cut, Cap, and Balance Act and the Balanced Budget Amendment) that would significantly reduce our debt-service costs and make it easier to finance our current obligations.
We should put a moratorium on new federal regulations, which are strangling economic growth and job creation.
And we should encourage domestic energy production, reducing our dependence on foreign oil and reversing this administration’s assault on our domestic energy industry.
Two years after the passage of the first failed stimulus, we have little to show for it other than an increase in our federal debt. Yet this administration appears to have learned anything useful about how the economy works.
Congress should reject Obama’s new attempt to tax and spend our way out of an economic hole and instead get to work paring away the taxes and regulations that stand in the way of job creation.
Mike Lee is a Republican U.S. senator from Utah.