The latest unemployment numbers for the month of October, 2009 are in. Unemployment in the United States stands at a twenty six year high of 10.2 percent. Add in discouraged workers and part timers and the real unemployment rate is north of 17 percent.
Congressman Mike Pence, chairman of the House Republican Conference, was quick to point out the obvious failures of Obama administration economic policies and misplaced priorities on the part of Congressional Democrats.
“The American people want to know why Congress is forcing through the Pelosi plan for a government takeover of health care instead of a plan that will help create jobs. Concerned citizens don’t understand why their elected officials can’t work together to create jobs and bring relief to families hurting in the city and on the farm. It is time Democrat leaders abandon their endless pursuit of government-run health care and begin working on bipartisan solutions that will put the American people back to work.”
Republicans are pointing out with a special kind of glee that the Obama administration had promised that if the stimulus package were passed, unemployment would not exceed 8 percent.
Why did the stimulus package, costing eight hundred billion dollars, fail so spectacularly? The simple reason is that the stimulus package relied on government directed spending to stimulate economic activity. There are two problems with this.
First, the sort of projects that a stimulus package funds have a beginning and an end. Once a project, say a highway or some other public work, ends, the jobs and the economic activity accompanying them goes away.
Second, politicians, especially liberal democrats, are hardly the most expert in spending money in a sensible manner. A great deal of the stimulus money went to pork barrel projects which, while they suited the ego of some politicians and may have even enhanced their reputations in their home districts, had little or no effect on economic growth.
There is, fortunately, a model for government action that does stimulate economic growth. Presidents as diverse as John Kennedy, Ronald Reagan, and George W. Bush have used this action to good effect. That government action is to lower taxes across the board. Each time the government has lowered taxes, economic growth has ensued.
The reason low taxes spur economic growth and job creation is axiomatic. The more money that is in private hands, the more that gets saved, invested, and spent. The more saving, investing, and private spending that takes place, the more the economy grows. Also private investors know a lot more about what kind of investments are likely to garner good returns than politicians in Washington.
But will Washington listen? Sadly, likely not, so long as Obama, Reid, and Pelosi are in charge. Fortunately the American system has a way to change that too.
Source: Pence Statement on Latest Unemployment Numbers, Congressman Mike Pence, GOP.Gov