“I’m also a mother. I’m a wife. I’m an American veteran, and I’m one of your middle-class Americans. And, quite frankly, I’m exhausted…Mr. President, I need you to answer me honestly. Is this my new reality?”
–Velma Hart, September 20, 2010
How We Got Here
Just months after transferring $700 billion from Main Street to Wall Street via the TARP bank bailout, Democrats enacted a $1.2 trillion (including the cost of interest) “stimulus” plan in February 2009, invoking its passage as necessary to create jobs. Speaker Pelosi stated at the time, “The choices that were made in [the stimulus plan] were to create jobs, jobs, jobs and jobs and jobs as soon as possible and jobs over a period of time to stabilize the economy.” Despite, or perhaps because of, Democrats’ record spending, the nation’s unemployment rate hit a 27-year high of 10.2 percent just eight months later. Claims from the Obama administration that the bill would prevent unemployment from surpassing eight percent rang hollow.
The American people began to demand a reversal of course on spending but rather than heeding those demands Democrats moved forward with a $1 trillion federal takeover of the healthcare industry, promising the plan would create jobs for millions of Americans. On February 25, 2010, before the bill was rammed through Congress by the Democrats, Speaker Pelosi stated, “It's about jobs. In its life, it [the healthcare bill] will create 4 million jobs—400,000 jobs almost immediately.” Democrats’ fiscal recklessness and empty promises have resulted in stubbornly high unemployment and a national debt of nearly $14 trillion. The results of their attempts to remake the nation’s economy could not be any clearer—Democrat policies have failed the American people.
What We Have Lost
Jobs Lost: On October 8, 2010, the Bureau of Labor Statistics reported that the economy lost 95,000 jobs in September as the nation’s unemployment rate remained at 9.6 percent. The Associated Press reports that the unemployment rate has been stuck above 9.5 percent for 14 consecutive months, the longest stretch since the 1930s; the rate has remained above nine percent for 17 consecutive months. There are currently 15 million Americans unemployed.
Financial Security Lost: On October 6, 2010, the Wall Street Journal reported, “Middle-class Americans made their deepest spending cuts in more than two decades…Households in the middle fifth of the population sliced their average annual spending to $41,150 in 2009…down 3.5 percent from 2008, the steepest one-year drop since records began in 1984…Meanwhile, the poorest Americans spent more as prices for necessities like food and rental housing climbed. Spending rose 5.6 percent from 2007 to 2009 for the poorest fifth of consumers…despite a 5.5 percent drop in after-tax income…”
Household Wealth Lost: On September 17, 2010, Reuters reported, “U.S. household wealth fell by $1.5 trillion in the second quarter, according to Federal Reserve data on Friday that showed the strain a slow-paced recovery and high unemployment are putting on Americans…Declines in the value of financial assets—especially in stocks and mutual funds—accounted for much of the decline in second-quarter net worth. Stocks alone were down $1.9 trillion…more than offsetting small gains in other areas like state and local government retirement funds.”
Independence Lost: On October 6, 2010, Bloomberg reported, “The number of Americans receiving food stamps rose to a record 41.8 million in July as the jobless rate hovered near a 27-year high, the government said. Recipients of Supplemental Nutrition Assistance Program subsidies [food stamps] for food purchases jumped 18 percent from a year earlier and increased 1.4 percent from June...Participation has set records for 20 straight months…An average of 43.3 million people, more than an eighth of the population, will get food stamps each month…according to White House estimates.”
American Dream Lost?: A September 21, 2010, ABC News poll found, “Just half of Americans say the American Dream still holds true.”
What To Do Now
“It is increasingly clear that no matter what party is in power, so long as our national security needs keep rising, an economy hampered by restrictive tax rates will never produce enough revenues to balance our budget just as it will never produce enough jobs or enough profits…In short, it is a paradoxical truth that tax rates are too high today and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now.” –President John F. Kennedy
President Kennedy had it right on taxes and economic growth. In that same vein, House Republicans have a plan that will put America on a path towards economic prosperity. The Pledge to America includes actions that will create jobs, end economic uncertainty, and improve the country’s competitiveness. The plan will do the following:
Immediately cut government spending to pre-bailout levels—to save at least $100 billion in the first year and put the federal government on a path to balance the budget and pay down the debt, moving away from a debt-driven economy and eliminating the fear that unsustainable spending has created.