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 Rogers: More Borrowing Won’t Solve Economic Woes By U.S. Representative Mike Rogers, Michigan 8th District, Special to the MACPA These are certainly challenging times for our state. With an unemployment rate that leads the nation and with our largest employers – the auto companies and auto suppliers – struggling to remain in business, there can be no question that Michigan’s economy is in dire need of help. That is why I was so disappointed, with the “stimulus” and spending bills that have moved through Congress on largely party line votes. There is no question that our economy needs some help, but the fact of the matter is we need to focus on job creation, housing and the credit markets. Unfortunately, so far the Washington plan is to simply keep spending money we don’t have. Since last fall Congress has committed the American people to a generation’s worth of spending, including: $700 billion in the original Wall Street bailout; $720 billion additional bailout money announced February 10; $736 billion previously committed to AIG, Citigroup, Bank of America, Fannie Mae and Freddie Mac; and $789 billion in the omnibus budget bill recently signed in to law by President Obama. By now I’m sure you have all heard about some of the more outrageous projects found in some of these bills. From bonuses to AIG executives, to tattoo removal programs, to $30 million to protect endangered mice in House Speaker Nancy Pelosi’s district, there are plenty of specifics to be upset about. But the real outrage should be that we do not have the money to pay for this spending spree. It will all have to be borrowed from foreign nations – mostly our competitors in the global economy. This means that as American taxpayers every one of us will have to reach our hands out to other nations and borrow – on the promise our children will pay it back – more money than we have spent on all wars the U.S. has ever fought in combined. Today, China and Japan are the largest holders of U.S. debt. Both have expressed reluctance to lend us more, with the Chinese Premier going so far as to question the credit worthiness of the United States shortly after Secretary of State Clinton traveled to China and essentially promised to look the other way on human rights violations, provided the Chinese continue to loan us money. There are real consequences to putting ourselves in debt to the rest of the world. Inflation and rising interest rates are an inevitable side effect of this explosion in spending, making our savings worth less. Another very real outcome is further crowd-out in the credit markets for small businesses. As the federal government pays more to finance its larger debt, businesses large and small will face higher interest rates too, and in the case of some smaller businesses and start ups the cost will be too high for them to pay. Our nation, and especially our state because of its special circumstances, needs help. Washington cannot continue to be paralyzed by old fights over party and ideology. It is time to focus on new solutions to today’s problems. That is why I support broad-based tax reform and relief that makes it easier for Americans to save their own money, reforms that would have created twice as many jobs as the “stimulus” but at half the cost. Unfortunately, that plan was defeated in favor of the stimulus bill. But that does not mean Congress’ work is done. Our economy is in dire need of help, and it is well past time that Democrats and Republicans come together on plans that will get America back to work without sentencing our children to debtor’s prison. Mike Rogers serves on the U.S. House of Representatives Energy and Commerce Committee and the Permanent Select Committee on Intelligence. |
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| PO Box 5068 Troy, MI 48007-5068 Phone: 248.267.3700 Fax: 248.267.3737 E-mail: macpa@michcpa.org | |
