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Congress Approves Another Reckless Spending Bill

December 16, 2009
 by Austin Raynor


Amidst widespread unemployment and skyrocketing deficits, Congress passed yet another bloated and irresponsible stimulus bill.

On Sunday, amidst 10% unemployment and the worst recession in decades, the Senate passed yet another massive spending package, totaling $1.1 trillion, that combines six of twelve annual appropriations bills. Most of the money, ostensibly, is intended to cover the operating budgets of various departments in the federal bureaucracy. But the bill actually entails another massive expansion of federal government, cloaked beneath its talk of “operating expenses” and hidden behind the distracting, protracted health care debate.

An analysis of the 1,000 page bill reveals that it does substantially more than merely make annual appropriations. It contains 5,000 pork projects, including the construction of a farmer’s market in Kentucky and the renovation of a historic theater in New York. Pork in the bill totals $3.9 billion. Senator John McCain criticized the wasteful legislation as “shameful.”

Furthermore, agency operating budgets, instead of decreasing, as one might expect in a period of economic malaise, declining government revenues, and skyrocketing deficits, are actually increased substantially. Agencies funded by the bill will receive, on average, a ten percent budget increase (a number far exceeding the rate of inflation). Compared to last year, the FBI’s budget increased $680 million, the Veterans Health Administration’s allotment rose $4.1 billion, and the National Institutes of Health received an additional $692 million.

On top of that, the bill approves a 2% pay increase for all federal workers. This comes at a time when 17.2% of Americans are either unemployed, have searched for but have since given up on finding a job, or have taken a part time job because they are unable to find full-time work. The pay raise is also particularly shocking when considered in light of the fact that federal compensation per person, on average, is twice that of people employed in the private sector.

Harry Reid, Senate Majority Leader, commented upon passage of the bill that “Every bill that is passed, every project that is funded and every job that is created helps America take another step forward on the road of economic recovery.” This statement is a gross misrepresentation of economic realities.

Most importantly, the idea that the government can create more jobs than would arise spontaneously, merely by the workings of the free market, is simply a myth. The government can only redistribute, not create, wealth. Money that is spent on government projects is money that has been acquired, through taxation, from the private sector. If the private sector still possessed the money, it would create jobs, either in the form of businesses hiring employees or individuals investing in businesses through the stock market or even by simply putting their money in the bank (which then loans money to businesses).

Thus, the money that the government uses to “create” jobs is money that, had it not been appropriated by the government, would also have been used to create jobs. So the net effect is that the jobs that are created are those favored by government rather than those favored by the people (since the jobs created by the private sector are a reflection of market demand). Furthermore, bureaucracies spend money less efficiently than does the private sector, so the number of jobs “created” with a certain amount of money by the government is always less than the number of jobs created with that same amount by the private sector.

The bill testifies to the willingness of Washington bureaucrats, who already enjoy insulation from the competition of the private sector, to leech ever more extravagantly off of those productive Americans who drive true economic growth and those hit hardest by the recession. It also indicates Congress’ irresponsible lack of restraint in terms of budgetary matters. This year’s deficit is larger than India’s entire economy and the national debt (the cumulative sum of each year’s deficit) currently stands at $12 trillion dollars. The unfunded liabilities of Social Security and Medicare alone—payments the government has promised to make, but doesn’t currently have the money to do so—top $70 trillion.

The only sector of the economy that this bill aids is the government sector—and it does so at the expense of the rest of us. Meanwhile, it exacerbates the out-of-control deficit that threatens to devalue the dollar and contribute to widespread economic malaise. Prior to this bill, federal spending in 2009 was already at a historical high of 20.2% of GDP, which is double federal spending, as a percentage of GDP, during the New Deal in 1934. But the current administration seems hell-bent on enriching itself, even if the price is the impoverishment of the people. It’s fitting, then, that the next item, apart from health care, on Congress’ agenda is the raising of the federal debt ceiling to $14 trillion.

America desperately needs legislators with the moral backbone to keep spending below revenue levels. But Congress is a reflection of the American people, who have scorned thrift for the temptations of cheap credit and consumerism—a value shift evident in the spike in mortgage defaults. Impetus to change in a democratic government must come from the people. Only when the people have found once again value in fiscal discipline and responsibility will they demand these values from their legislators.

Related Content:

Economics of Pie - Richard Sutton
Restore Fiscal Sanity by Ending 'Home Rule' - Bennett Kalafut
The Violence of the Health Care Bill - Nick Coons

Add Comment

User Comments:
, on 12/16/2009 at 8:22pm, said:

1. Cut back on the Pentagon.

2. Let the Bush tax cuts for the rich expire.

3. What is taxed for Social Security, STAYS in Social Security.

Oh wait. I forgot. You guys HATE SOoial Security (and those who need to survive from it).

TRUTHBEKNOWN, on 12/17/2009 at 11:35am, said:

The financial industry and Wall Street, in other words the "power brokers" are the guilty ones. This article is completely biased.

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Libertarians hate people that live off Social Security? That's news to me.

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