Friday, March 21, 2008

Trying to help, Congress has made economic situation worse

Grant outlines his plans to improve the economy in this morning's Union Leader:

Trying to help, Congress makes economic situation worse


THE STIMULUS package Congress recently passed will send out checks from $300 to $1,200 to American taxpayers. Congress has finally stopped the pretense of pork barrel projects and is now trying to buy our votes directly. While this extra cash will come in handy during this economic downturn, it certainly won't have any significant effect on the economy as a whole.

In fact, the stimulus package was also loaded down with hundreds of earmarks, special pet projects put in to help incumbents back in their districts. Overall, the only economic activities this stimulus package seemed designed to encourage were campaign contributions.

High taxes, unfunded mandates and overregulation are slowing the economy, which is having trouble keeping pace with runaway federal spending. Congress's appetite for our dollars is taking a big bite out of the private sector. If Congress were serious about encouraging investment and growth it would lessen its interference in our economy and stop punishing small businesses that are trying to grow into big businesses.

The top two threats to prosperity today are inflation and a growing credit crisis. Both have little to do with the true strength of the American economy and everything to do with our money supply. In 1963, groundbreaking economist Milton Friedman wrote, "Inflation is always and everywhere a monetary phenomenon." He was correct then, and now.

The Federal Reserve's recent paranoia about deflation led it to overreact, and we're seeing higher prices as a result. Politicians pushing for easier access to credit handed out incentives for lenders to make bad loans and for homeowners to make bad decisions. Politicians trying to protect these folks from the consequences of their bad decisions risk spreading the pain of bad loans to the entire country, through a taxpayer-funded bailout.

Congress has the ability to address both problems, but not by continuing its current policies. Ending our bloated farm subsidies, specifically the ethanol boondoggle, would not only reduce federal spending significantly, but it would remove the perverse incentives in our agricultural sector, which are driving up the price of bread, milk, meat and vegetables other than corn.

Congress also can help bring energy prices down by scrapping the failed policies that have helped drive them up. We should allow responsible exploration of domestic oil reserves. We should remove the regulatory roadblocks that stand in the way of new oil refineries, the bottleneck in our transportation system that makes gas prices so volatile. And we should permit the construction of new nuclear power plants, which have the potential to provide safe and clean electricity.

The greatest benefit Congress can provide is to finally control federal spending. Our mounting national debt threatens our status as the safest place to invest in the world. Congress' unwillingness to acknowledge the massive unfunded obligations of Medicare and Social Security will leave the next generation with a massive tax bill. These fiscal time bombs will not be defused with a $300 check.

The American economy is the strongest engine of economic growth in history. It has propelled our country and much of the world to a quality of life undreamt of a century ago. And it is because of market capitalism.

Capitalism has consequences, sometimes painful. But government efforts to protect us from those costs are almost always far more harmful. So, thanks, Congress, for trying to help. But please stop because we can't afford any more of your kind of generosity.

Grant Bosse is a Republican candidate for Congress from New Hampshire's 2nd District. He lives in Hillsborough, and can be contacted at

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