W. Akin

Mr. AKIN

Mr. AKIN. I'd just like to jump in if I could, gentleman. I'm detecting a certain level of skepticism on your part whether or not this government agency was really very effective in protecting us and in preventing a massive environmental mess. I guess the question I have is--you're suggesting that maybe a government agency isn't that reliable. Yet we just trusted the government with all of America's health care. Does that make you feel comfortable now that you see how the government is working in the MMS area?

Mr. AKIN. Appointee.

Mr. AKIN. So, when we're talking about a cozy relationship here, it's very cozy.

Mr. AKIN. I thank you, lady. We've been talking about a broad range of different topics today; but in general, it is the condition of our economy. The thing I would like to be sure that we don't do is to leave with the impression that there aren't solutions to these problems, but the solutions include, one, we're going to have to back off our just giving away money to everybody. We're going to have to reduce Federal spending. What we're going to have to also do is to use the power of reducing taxes to increase government revenues. So we have to reduce taxes in order to get the economy back and going and to start creating jobs. Now, if we want to continue the formula of destroying jobs the way we have been, what's going to happen is that it's going to be harder and harder to get the economy back on track, but there is a solution. It's not complicated. It involves doing tax cuts selectively to allow those small businesses to start creating jobs again, and we have to get off their backs with regulations and red tape. We have to increase their ability to get liquidity, but we also have to stop taxing and taxing and taxing. All of the talk about concern about jobs is just a bunch of lip service because every one of these things is a job killer: Cap-and-Tax. They're going to tax energy. Health care taxes, a massive effect of destroying jobs. There are all kinds of businesses now that are asking, How can I get my employees under 50 so I don't have to get involved in this? The death tax. Taxes on inheritances. This is another thing that is going to tie up money that could be invested in business and that could create jobs. The capital gains tax. This is one of the big things that helped create jobs before. This is going to expire next year. So there are solutions to these problems, but the solutions require some grown-up leadership in Washington, D.C. Mr. Speaker, I thank you for your indulgence this evening. I yield back.

Mr. AKIN. I do yield, lady.

Mr. AKIN. Well, I very much appreciate the little history lesson and also the shot of inspiration that you have shared with us, the idea of the shining city on a hill. I think that there are a lot of people that can be quoted. I'm thinking of good old Alexis de Tocqueville, a Frenchman who traveled around America, took a look at our system and said he looked for the secret of America's greatness. And he had a great quote along those lines, but one of the things he said was: You have a weakness in America, and that is, if the public realizes that they can vote themselves largesse out of the public treasury, you're really going to be in trouble. There's another name for that. It's called socialism; the idea that voters can demand the Federal Government to keep giving them more and more stuff. The problem with that system is that eventually you run out of other people's money. That was one of the great weaknesses that Alexis de Tocqueville saw with our system, that because we are a self- governing people, because people have the right to vote, they can also make irresponsible votes and they can perpetuate a socialistic system. A lot of Americans don't really know what socialism means anymore. They don't understand that the concept of American law was that people are all equal before the law, that Lady Justice is not supposed to give a special deal to a rich person or a poor person or anybody else, that people are all equal before the law. The Pilgrims experimented with socialism. It was demanded of them by the agreement that they made with the loan sharks of London that financed the expedition to send the Pilgrims to America. So it was forced on them and they agreed to it, to have everybody take all of their corn that they grew and everything they produced over at the new colony in Plymouth and divide it equally and then send the shares back to London. Well, that lasted less than about a year or so. And Governor Bradford saw everybody starving to death, and they pitched socialism, and he wrote in ``The History of Plymouth Plantation,'' he said: As though men were wiser than God. And he said: This is an experiment that's been tried among godly, hardworking people, and everybody can take a look at our example and see that this isn't going to work. So the Pilgrims understood it. Unfortunately, our Congress today doesn't seem to understand it, and that's why you see these kinds of things. Here's the Federal Government employment numbers. We're trying to create employment. Well, that's one way to do it; go hire everybody. What's the trouble with this theory? Well, every time you hire somebody in the government, you lose two jobs in the private sector. So now after we've passed this wonderful stimulus bill--which we were told if we didn't pass it, unemployment might get to 8 percent. We're now close to 10 percent unemployment, and we continue to do the very things which kill jobs, particularly worst of which is taxation. But this is an alarming trend as well, government employment going up. And I think a recent study just indicated that the average government employee makes twice as much money as the average civilian employee in America. That is not a good trend, because pretty soon everybody is going to be working for the government--that's not very hard to break that equation--and then who's going to be paying? I see my good friend, Congressman Gohmert from Texas, coming to bring us a little bit of Texas wisdom, perhaps. Lou, would you join us, please.

Mr. AKIN. Hey, let's do that one again. One worthless man is a shame, two is a law firm, and three is a Congress. Congress was smaller in those days, I suppose. Well, thank you for that bit of Texas wisdom. Here's another chart that runs along with it. This is private sector employment, government employment. You can see what's happened here. We're doing some employment, all right. It's the government that's doing the employment. But you take a look at the blue line--this is the private sector employment--you see jobs going down like a submarine. And that isn't just a statistic, that isn't just a fact, that is suffering--suffering in our economy, suffering with lots of people who don't have jobs, a lot of younger people moving back with their parents. The house is full of people because we're having trouble with not having the jobs. Now, what kills the jobs? Well, first of all, excessive taxation is a big deal. Insufficient liquidity is another problem. Our banking regulators are so tough that it makes it very, very hard for businesses to get loans. A third big job killer is economic uncertainty. Boy, oh, boy, do we have some of that. Who knows what we're going to do next. We just passed this socialized medicine bill, and everybody who has employees is going to get whacked for having employees. There's a huge incentive we've created to get rid of any excessive employees on your budget because you're going to get taxed heavily for socialized medicine. And then, of course, the old standby. If you can't get them with too much taxes, no liquidity, and uncertainty, then you hit them with red tape and government mandates. You put this together, and you've got a great formula to destroy jobs in America, and we have been doing this in a massive kind of way. Here's kind of a list of some of the Obama plan taxes: Cap-and-tax. That's that tax on energy. Do you remember how the President said, I'm not going to tax anybody who makes less than $250,000? And then he comes up with this deal, that you get taxed when you flip your light switch. I don't know how in the world you can keep those two things separate, that you're going to only tax people making $250,000, and then nail them with a tax when you flip your light switch. Did you want to make a comment? I would be happy if you want to jump in, Congresswoman.

Mr. AKIN. Reclaiming my time, all of these things are really indicators that we've got a Federal Government that is out of control. We're hiring too many Federal employees, spending too much money. We don't even have a budget for the first time since the seventies. This is not a good picture. Congressman Gohmert.

Mr. AKIN. Let me just stop you for a minute here, please, because I would like to try and get these numbers figured out a little bit. Of all of the different complaints I heard about President Bush, the one that I think I heard the most was that he was spending too much money. I think the people didn't like the fact we were at war in Iraq very much, but I think particularly they were worried that he was spending too much money. And so I guess his last year in was 2008, and that was when the Pelosi Congress was here. And that was his worst amount of deficit spending that he did, which was about a $470 billion deficit that year in his spending. Now, that wasn't good; that was about 3.1 percent of gross domestic product, and that was his worst spending, and he was spending too much, and some of us said, yes, he was, and we didn't vote for some of the spending. He was followed by President Obama the next year, which is 2009, and the amount of deficit there was $1.6 trillion, that is three times more than Bush's worst year. And, boy, were we doing some spending. Then we went from 3.1 percent of GDP all the way up to 9.9 percent GDP, and so we just rocked into this. I will tell you, President Obama made George Bush look like Ebenezer Scrooge.

Mr. AKIN. I would like to reclaim my time for just a minute. I really wanted to inquire of you about some of these numbers that you just said, because I am not on the Budget Committee. And I was kind of shocked in a way. We haven't not had a budget since back in the 70s, and that was just since we put this current budgeting process. And we've always had a budget, and yet this year we don't have a budget, and we are spending money at a tremendous pace. Is the rapid rate of spending, is that part of the reason we don't have a budget, because we are just so embarrassed we are spending so much? Is it because by putting a budget down it acknowledges the complete fiscal irresponsibility that we have started down that path? Do you think that's what it is? Or is it just we can't figure it out? Why don't we have a budget?

Mr. AKIN. The thing that has, I think, other Americans, and myself included, concerned about, is you keep going out into this uncharted territory where we are spending more and more and more money that we don't have, and America is banking on our good credit. We have nations like China who buy our Treasury bills because the Chinese are very good at saving money, and they are taking their savings and buying our Treasury bills. You wonder how long can we keep spending money on all kinds of pension and welfare programs and feel-good programs and reward-people- for-not-working programs and food stamp programs, and all kinds of other things that may be nice? How long can we continue to borrow other people's money to do that before it comes time to pay the fiddler? When we do, what is that going to look like? That is kind of a scary thing. This is a chart of some of these absolutely amazing items of spending. This is the Wall Street bailout at $700 billion. You have got the economic stimulus bill--I think it's closer to $800 billion, finally, which wasn't a stimulus bill at all; it was just paying various States that had exceeded their budgets so they could keep paying generous pensions that they can't possibly afford to sustain. Then you have got the appropriations, Obama appropriations and the IMF bailout, and now you have got the big health care thing. They are claiming that's a trillion. I think we will be lucky to get away with it only been being a trillion. You put all of this stupendous spending together, and the bottom line is they don't want to have a budget because they don't want people to see that we are really pushing the edges on things. I have a chart here that I think is a little bit spooky. I don't know if you can see it from where you are standing, but this is debt and deficit as a percent of gross domestic product. What I have got here, this is deficit as a percent of gross domestic product. The deficit that we have in the United States, as a percentage of GDP, is 10.3 percent. You take a look at Greece here and their percentage as a deficit of GDP is about 9.4 percent. Now Greece is about to crash the European Union because of their crazy financial situation, their socialized medicine and all. They can't make it work. And so deficit as a percentage of GDP is 9.4, and here we are at 10.3. That doesn't make me feel comfortable that we are worse off than Greece is. Then coming across on the chart, debt as a percent of GDP, our debt is 90.9 percent of GDP. Greece is worse at 130, but Greece and Italy are the only two nations of Europe that are worse off than America is. So these numbers don't give us cause to be very comfortable with our economic situation. I am wondering whether that's not the reason why the Democrats don't want to put a budget in front of people, because they are going to realize somebody is going to get wise that we are just blowing the lid off of any kind of economic sanity by our excessive spending.

Mr. AKIN. Well, I very much appreciate the expertise that you bring from Wyoming. The idea of cutting spending here, that's got to be the closest thing to a swear word you can say in Washington, D.C., the idea of cutting spending. Yet I just heard less than an hour ago the Democrats just raving about the wonders of Social Security and their Medicare and Medicaid programs, the three major entitlements, all of which a Democratic economist, a Republican economist, all agree that they are on a train- wreck path in a fairly short period of time. Because these entitlements are just like starting a robot, some machine that gets going. You create the law, the law gives out money to people, and it just runs. If you don't touch it, it just keeps giving out money. And the trouble is, it's giving out more money than we have. What's going to happen is you are not going to have anything to spend any money on for Defense or any other program because Medicare, Medicaid, Social Security, will eat the entire budget up. What you are saying is correct. We need some of that common sense that says, wait a minute, we just can't keep running more and more and more government giveaways. It gets back to the question, do we really want to follow the model of the Soviet Union down the primrose path into just economic collapse, because we know it didn't work. It's not working well for Europe, and we know what the models are that make for a prosperous and healthy and good economy. And it's what you are saying; one of the main things you have to do is to cut taxes. The interesting thing is that the Democrat, JFK, figured that out. He cut taxes because we were in a recession. He cut taxes and found out a very fascinating thing: That the recession stopped, the economy got stronger, and he actually collected more tax revenues with a lower tax rate. It seems like it's like making water run uphill, but it's not. What happens is you have more economic activity. Because of that there are more taxes that are generated because there are more transactions and, therefore, the government actually raises more money by cutting taxes. JFK figured it out. Ronald Reagan did the same thing, and it worked like a champ for him, and George Bush did the same thing. He did some serious tax cuts and moved us from recession to recovery. Because he understood this basic principle: There are certain things that are job killers, and one of the worst ones is excessive taxation. Why is that true? Well, because, the people who make jobs are businesses, and the business people have to have some of their own money to plow back into the business to put a new wing on a building, to buy a new machine tool, to start a new process, and to get a new plant going somewhere. They have to have some money. If you tax it all away from them, then they are not going to have money and they can't make jobs. FDR found that out the very hard way. They kept driving and driving and driving the taxation of business owners. Instead of just creating, business owners that were hiding and hunkered down inside their businesses--they closed them down. The businesses closed, and all the employees were laid off.

Mr. AKIN

Mr. AKIN. Is it tough on taxes?

Mr. AKIN. You know, what you are talking about makes all common sense economically. One other thing, and I have heard people talk about this, you can take a look and see that we are not learning from history. You can see that socialized medicine didn't work well in England because you look at the cancer rates there. You take a look at Canada, their socialized medicine system costs them a fortune. When you get sick in Canada, you come down to America to get medical care. And you can see examples. You can see examples of it not working in Massachusetts, not working in Tennessee. And yet we refuse to learn from it. It didn't work in the Soviet Union. We refuse to learn. And to some degree, you can say logically we should be smarter than to do all this socialistic stuff. But there is another argument why it's not a good idea which I have not heard as often. Maybe it's a more emotional argument, but it is true nonetheless. And that is that it's stealing. It's stealing. When the government takes money that it's not authorized constitutionally to take, that it has no moral logical reason why the government should take money and redistribute money, it goes back to the argument between the President and Joe the plumber. And the President made it very clear. He said we think it's the job of government to take money from one person and give it to someone else. Now, when and where does the government have the authority to steal money from one person and give it to someone else? If I beat you over the head and take your wallet, we call it stealing. But if the government takes your money out of your pocket and gives it to me, is it morally any different? It's still institutionalized theft. And fortunately, our Founders understood that. They pitched socialism out with Governor Bradford in the 1620s when it was imposed on the Pilgrims by the loan sharks from England. They understood that not only did socialism not work, they tried it. They almost starved under it. They also knew that it was morally wrong and that it was institutionalized theft.

Mr. AKIN. I think that the no work, no eat came a long time before the Pilgrims. As I recall, it was written in the Good Book.

Mr. AKIN. Wow, that's absolutely incredible. So just in the last year or two we've seen history being made.

Mr. AKIN. Mr. Speaker, thank you very much for recognizing me and allowing us again on a Wednesday evening to explore the interesting question that has certainly been much in the minds of Americans over the last couple of years; that is, the situation of jobs and our economy. Particularly, what is the connection between jobs and the economy, and what is going on? Do we have reason for hope? Are things turning around or not? And we continue as Americans to ask, where are the jobs? Because there are many, many people who are unemployed, and many people who are unemployed for more than a year are no longer counted in our statistics, which suggests that the unemployment rate is somewhere in that 9 percent or 10 percent area. So the real unemployment rate is probably higher. That is a reason for people to be concerned, if you have a job. If you don't have a job, it is not a matter of concern; it is a matter of a serious crisis. And there are many people who are struggling with that, and we are going to take a look at that this evening and also take a look at what are the various factors that influence the fact that we don't have jobs, whether we are doing the right or wrong things, and also the curious phenomena that we are seeing now, where, from a policy point of view, we are doing many things that are very destructive to job creation, and yet the economy seems to be coming back to some degree. What is that? What drives the economy? And, why would Wall Street be having things look good for Wall Street when so many people are out of work? We are going to take a look at those questions this evening. Starting off, I have depicted here: The lower part of this graph is the net jobs gained or lost. This centerline here is zero jobs. We haven't created any jobs, we haven't lost any jobs if you see a bar that is near this centerline. This is going back to 1993. We come here: 2001. It was the recession when I was first elected to Congress. In 2001, we were losing jobs. And you can see those. We inherited a recession from the last days of the previous administration. George Bush came to office here, we were losing jobs, and we had to do something to try to turn the economy around. You see, something was done. The economy turned around. Now, the next and last section of the graph is 2009, and you can see the tremendous number of jobs lost over here, the jobs lost again being the lines under the graph, showing that these are thousands and thousands of jobs that are lost. So this graph here shows the fact that we do have a great deal of job loss. The graph up above is a little bit more complicated. We don't need to get into that for a moment. So how is it that this whole situation came to be, and how did we get into the problems in the first place? Well, it started some years ago for this particular recession. It was brought on, as you recall, you have probably heard some discussion about the word ACORN or about Freddie and Fannie. The details of this whole situation may seem a little bit hazy to you. That is all right. A lot of things go on, and it is hard to keep track of everything. But the recession really got started because of a combination of several things that happened. By and large, if you are looking at somebody to blame, you should be looking here. You should be looking at the Federal Government. It was policies of the Federal Government that created this problem, the unemployment problem and the turndown in the economy. Well, exactly what happened? Well, what happened was, going back many years, people got the idea that it would be a good idea for banks to loan money to people so people could buy houses. But there are some people who economically are not in a very strong position to be able to continue to make their mortgage payment month in and month out. So Congress, in its wisdom, made the decision that we were going to force banks to make loans to people who were bad loan prospects. That means that there was a high chance that they could not repay the loan. Now, I suppose this was done in the name of compassion or whatever. I am not sure how compassionate it is to put someone into a loan that they can't afford to pay for, but that is what we actually instituted into law. So we had the situation ticking along like a timebomb. By the time President Clinton was in his last year, he increased the percentage of the loans that had to be made to people who couldn't afford to pay them, so the bankers were going out making loans to people that couldn't afford to pay. You say, well, why would a banker do that? Well, part of the reason is because a banker could pass the loan on through to Freddie and Fannie. Freddie and Fannie were two quasi-public organizations. They acted like private companies, but there was always this implicit guarantee that if anything happened to Freddie and Fannie, the Federal Government would come in and bail them out. Well, so what happens? You put that in combination with another thing that was going on, and that was this recession here. The Federal Reserve, first of all, created money, but they also particularly reduced very much the cost of money to banks. So you had almost a zero interest level and you had a lot of liquidity looking for someplace to invest money. So what did people invest money in? They invested money in houses. So everybody started buying houses, and housing prices went up and up and up. I came down here by 2004 or 2005, and I thought I was the dumbest Congressman in the entire House because I hadn't bought a multimillion dollar house and watched it double in 4 or 5 years. But of course, when you see something expanding that rapidly, it suggests you may be dealing with a bubble, and of course that is what happened: The housing bubble popped. So it was a combination, one, of policies created by Congress requiring loans to be made to people who couldn't afford to pay them. And as the housing bubble popped and the housing values came down, all kinds of people were like, when the music stops, who is left without a chair? So the economy starts to take a beating, and the group that was pushing very hard for these loans to people who couldn't afford to pay them of course was ACORN, someone certainly that the President was closely associated with. And was this a big surprise to lawmakers? Well, it really wasn't to many. In fact, if you take a look at that great conservative oracle, The New York Times--I say that somewhat sarcastically--you find on September 11, 2003, as early as September of 2003, President Bush was saying to Congress, ``Give me authority to work with Freddie and Fannie, because they are spending too much money.'' And so the Congress did that. The Republicans were in charge here in the House. We passed a bill, it went to the Senate, and it was killed in the Senate because the Republicans did not have 60 votes in the Senate. And so this ticking timebomb continued to tick. We did not deal with the financial mismanagement of Freddie and Fannie until the train came off the tracks somewhat down the line. That may be a brief version, but it gives you a sense as to how things got started. And it wasn't problems with free enterprise, it wasn't problems with businesses much. It was made right here in this Chamber. I am joined by a fantastic Congressman from Illinois, somebody who is highly regarded, a graduate of West Point, which we won't hold against him even, and it is Congressman Shimkus. I would be delighted to hear your perspective on where we are going with these things.

Mr. AKIN. Well, I sure appreciate the way that you represent your district, and I know your constituents do. We're proud of you, and thank you for the fact that you bring that kind of common sense from the heartland here to the Capitol. We need a little more of that common sense. Thank you so much, gentleman. So I was just running along. We talked about what caused all this problem. Well, a lot of it was government policies and the idea of giving people all these loans. They couldn't afford to repay them, and then you have everybody buying all of these different kinds of mortgage-backed securities. And the major corporations in America, the Wall Street corporations, started to fail and choke on these bad policies that are based on no common sense at all. So now you have what's happened before in America and, that is, you have a recession going on. So the question is, What do you do if you've got a recession? And different Presidents have had different approaches to that. But what we have seen, as we've just been talking about, is we have done about everything on this list which are things that are going to kill jobs. We've done everything policy-wise wrong. We could hardly get anything more wrong. First of all, according to the small business people in our community, the excessive taxation. Well, let's talk about what the taxation was. Well, you've got the Wall Street bailout which is basically creating a whole lot of the government debt which is going to have to turn into taxation. You've got the taxation of the cap-and-tax bill that they're talking about. You're going to expire taxes on capital gains, dividends and death taxes. Those taxes are all going to go up next year. And then you've got the tremendous taxes that are inherent in the socialized medicine bill. So you have a whole lot of taxes coming down on the owners of businesses. That's a job killer. The next thing that my constituents said that was a major part of the problem was the insufficient liquidity. A businessman needs to be able to get loans from a bank. He doesn't want big ones. He usually gets a loan for 3 to 5 years and has to pay a pretty decent percentage to the local bank to get those loans. Well, what's happened is that we have tightened up the security and the requirements for lenders in small banks so tremendously heavily that it's very hard for small business people to be able to get loans. They can't borrow money, or the money they used to be able to borrow, they're paying twice the interest rate for the money. So the liquidity is a big problem. Insufficient liquidity is a big problem that small businesses are having. They're having liquidity problems, tax problems. The economic uncertainty--of course all of these massive bills like socialized medicine, those are things that create a lot of uncertainty. So if you're uncertain as a small businessman, what you're going to do, as we say in Missouri, you're going to hunker down. You're going to avoid making decisions. You're going to try to preserve your capital and try do what you can to ride out the storm. So that's the economic uncertainty that has been created. And then the red tape is another one that they mentioned. Excessive government mandates and red tape. That's particularly deadly to small businesses because a big business could have a red tape department, but a small business can't afford to have that kind of overhead in terms of management staff. So red tape is also very much a job killer. Now we have employed all of these tools in the last year and a half and essentially declared war on business. So why in the world would we want to do something like that? We shouldn't be doing it. The result then is that we have created an environment to make a recession that could have been bad, we've made it worse. We were told in the recovery plan, in the beginning of the year in 2008 and 2009 here, we were told that if we don't pass the recovery plan--I guess they call it the stimulus plan--if we don't pass this thing, we're going to have unemployment as high as 8 percent or 9 percent if we don't pass it. Well, on a totally party-line vote, the Democrats passed this bill, and our actual unemployment has gone up like a skyrocket. And why is that? Well, it's because obviously the stimulus bill didn't work. Now, should we have known it wouldn't work? Of course we should have known it. We could have gone back to the days of FDR who also had a recession that he turned into a Great Depression because he used a wrong economic theory. And what was that theory? Well, it was the idea that if the Federal Government just spends money wildly, it will improve the economy because as the government starts buying, they'll get everybody else buying, and the whole economy will take off and do well. So that was what Henry Morgenthau, with the advice of Little Lord Keynes, did just prior to the Great Depression. So at the end of about 8 years of tremendous pain and suffering where the small businesses were not just hunkered down but were out of business, then what happens is, this guy, Henry Morgenthau who was Secretary of the Treasury under FDR, comes here to Congress. He talks to the Ways and Means Committee, and he said, You know, we tried spending, and it doesn't work. It just doesn't work. And he said, What's more, we're tremendously in debt as well. So that goes back to basically World War II days that shows that this idea of the stimulus bill just doesn't work. It's not the right way to do it. Now, is there a way to deal with a recession that comes along? Well, the answer is yes. It's been tried by quite a number of different Presidents, and the various Presidents that have been most successful in stopping these recessions, one was JFK. Now, of course the Democrats run everything down here. Republicans in the House are 40 votes short of the majority, so we don't have a lot to say about these different bills that were passed, and the same thing is going on in the Senate, and of course there's a Democrat in the Presidency. Now, is there an approach that they could do? I have been critical of Democrats, but not because of the fact that I have anything personal but because the policies have been hurting our country. Here is a case, JFK, who is a Democrat, that did the right thing. They should have learned from him. And what did he do? He cut taxes. How does that help? He cut taxes. You've got problems all over. The government should be spending money and things. If you cut taxes, what happens is, it leaves more money for that small businessman to invest. As he invests, it creates jobs. As more people have jobs and make a good income, they pay more in taxes. So it's an ironic effect of economics that you can actually reduce taxes and increase government revenue. We saw it happen under the Bush administration. JFK of course was followed by, you know, Ronald Reagan and Bush. Both of them used the same approach. By cutting taxes, they turned us out of a recession. You could see that on the first chart that we had. You can see that this recession that President Bush inherited here, he had in 2001--and you have kind of lackluster job growth through 2002 into 2003. And then put the policies of these tax cuts, which he was able to get through the Senate. In spite of the fact that we did not have 60 Republican votes, we did get tax cuts through the Senate, particularly capital gains dividends and the death tax. And when we got that through, you can see that the recovery followed. And so that's the effective way, and I think it's not American even to be critical of a political party or somebody else's solution without proposing a better idea. So certainly the better idea is cut taxes. That's what always works. It's worked in other economies and other parts of the world as well. So here we've got actually a little bit of a cartoon of what's going on. Sometimes we have to laugh a little bit even though it doesn't seem very funny when you don't have a job. But you have the President here saying, Now give me one good reason why you're not hiring. Well, there are a whole bunch of good reasons in these bulls that are in the china shop. Certainly the health care reform is a huge tax, but it's also a tremendous amount of government red tape and an extreme, extreme incentive not to hire workers because you have to pay so much in health care if you are a small businessman with this new socialized medicine that has just been approved. The cap-and-trade or cap-and-tax is the energy bill. Of course, most businesses use energy. So if you have an increase in the cost of energy, which this bill would do, you're taxing small business. And then of course you have other different taxes in the background coming in. So we're doing a lot of things that are absolutely the wrong thing to do. So that basically could be summarized as a war on business. We have talked about what the right thing to do is, which is to cut our spending and also to cut taxes. The point of the matter here is that our economy and these jobs all work according to basic principles of economics. So now we come to, I think, a very, very interesting question, and this is the question: If we have been doing everything wrong, which I would suggest from a policy point of view we have done about everything wrong. We have created red tape. We have created tremendous taxes, and we are not allowing the liquidity that the businessmen need to make jobs. On top of that, you have a high level of uncertainty and excessive government spending. If we are doing all of those things wrong, how come it seems like the stock market is bouncing back and it seems like we are starting toward a recovery in appearances? That becomes kind of an interesting question. If what I am saying is true that we have done all of the wrong things for businesses, and if you check with almost any small business man in America, they would say yes, you do not want to increase taxes and uncertainty and government red tape. You want small business men to have access to capital and liquidity, and all of those things, if we haven't done a good job, are problems. Almost all small business men will say that is common sense, and if you want jobs, you have to have healthy businesses. How come is it, then, that it appears that we are pulling out of the recession and starting to do better? Well, obviously the answer to that question is that there are some other things that also affect our economy. In fact, there is another thing that is even stronger than all of the policies that are so important that we get right down here. What is that force that is so powerful? Well, in a way, you could look at it as the crack cocaine of our economy. Think of it for a minute that there is a person standing there. They are in need of a seven-way heart bypass and they have diabetes and they are getting older. So they are not too healthy. But with a little crack cocaine, they think they are Superman. Well, we have the equivalent of crack cocaine in our economic system in America, and that is the Federal Reserve. And their crack cocaine is to increase the money supply. It used to be called ``running the printing press,'' except today we don't run printing presses. Things are just recorded. But the point of the matter is that the Federal Reserve has created a tremendous spike in liquidity to try to deal with the tough times in the economy. On top of that increase in liquidity, they have dropped the interest rates down very low toward zero. What that does is it creates all of this easy money that is looking for a home, and that has a tremendously stimulating effect on the economy, a little like crack cocaine does to somebody who might otherwise be sick. So, when we have done this in the past, we run into these bubble cycles where you have easy money at a low interest rate. There are people who have access to that money, and they want to buy stocks. They find something they want to buy; they bid it up. It goes up, up, up, and then the bubble collapses. We saw it with the high-tech stocks, and we have just been through it with real estate. People who had a lot of money, particularly low interest rates in 2004, 2005, they go out and buy real estate because what is more solid and American and reliable than mortgages of Americans for their own homes? It has been a very steady business. Well, you have to watch out when you see money get too easy to be made. You saw home prices in many areas double, and then the top blows off. That is created by this easy money, or what I would call the crack cocaine of our economic system. That is what is going on right now. That is why you see Wall Street apparently seeming to do better, the stock market seeming to go up, and yet all of the policies from a logic point of view that are necessary for a healthy business environment and for lots of good-paying jobs, those policies are not in place and they are being ignored. In fact, it is almost ironic. The President made a statement, and I had it on a chart last week. He said the government can't so much make the jobs, but we need to set the environment so there is the proper environment for job creation. He was exactly right on that. And then he turned around and has advocated every single policy that he has been advocating, all of his priorities are going to have the net effect of destroying jobs. So there is a little bit of a dichotomy here. Now, I have been critical of Democrat policies, not because I don't like Democrats, and maybe I ought to make it clear. Everybody that I know of in this Chamber here, there are a lot of fantastic people, and I don't know of anybody who wakes up in the morning and thinks, How I can mess up our country? Nobody thinks that way, but the point of the matter is there are policies that work and there are policies that don't work. The policies that work to create jobs is you have to get off of the big spending and you have to back off on taxes. If you do that, you will actually get more revenue and you can pay for more government services. Let's take a look at what I am talking about, big spending. Many people felt President Bush spent too much money; in fact, he probably did. These blue lines are President Bush, and these show what the deficit is by year. If you take a look here, the very worst Bush deficit was this year. It is shown in red because this was the Pelosi Congress with Bush as President. He was somewhere just about $450 billion of deficit, which was President Bush's worst deficit. So he spent more money than we had, and that wasn't a good thing to do. He had two wars going on, and we were just coming out of a recession. Anyway, his worst spending year was 2008. Now we come to Obama's first year as President. What we find is that now the deficit has more than tripled in 1 year. So we go from $450- some billion under President Bush, which was about 3.1 percent of our gross domestic product, which is about average, really, for some of the deficits that various Presidents have run. The deficit is about 3 percent of our gross domestic product. The next year, under Obama, the deficit, and Pelosi and Reid, the deficit triples to $1.4 trillion. Now, what does $1.4 trillion mean? Well, it is three times bigger than Bush's worst deficit, but as a percent of GDP, it is 9.9 percent of GDP. That is the highest since World War II in terms of government spending. So this is not the thing to be doing when there are not a lot of jobs and when businesses are being hammered. We don't want to be running that kind of spending, and that kind of spending tends to lead to all kinds of taxes. What happens is you can take a recession and turn it into a Great Depression by using the wrong policies. Now, one of the things that I hear sometimes from people, and I think it is a fair and a good question, and that is: Okay, Congressman Akin, you are criticizing some of these Democrats, but I think you have a short memory. Don't you remember that the Republicans used to be in charge of 2001 through 2006? You were in the majority. What kinds of things did you do? Well, when we were in the majority, we did a lot of things that nobody knows anything about, but they were not actually such bad policies. In the case of health care, for instance, did you do anything in health care? Yes, we did. We passed a number of bills to move forward with associated health plans. That was something where small businesses could pool their employees together and get a better price on health insurance. What happened to the bills that the Republicans passed in the House? They went to the Senate. What happened in the Senate? Republicans did not have 60 votes in the Senate, so the bill died for associated health plans. It was brought up numerous times. We had bills to change tort reform. They passed in the House and they went to the Senate. What happened in the Senate? You guessed it. We didn't have 60 votes and they were killed in the Senate. We had bills to protect against the problems of Freddie and Fannie. The Republicans passed a bill to create more government control of Freddie and Fannie because they were cooking their books and they were not solvent the way they should have been. Guess what happened to those bills over in the Senate? Because we did not have 60 votes, they were killed by Democrats in the Senate because we didn't have enough to get to 60 votes. We also passed a number of energy bills in the House to protect against spikes in gasoline prices that we have experienced. What happened to our energy bills? A number of them that were sent to the Senate, you guessed it. They were killed by Democrats in the Senate. In fact, people are surprised to note that there is more difference on a party-line vote on energy in the U.S. Congress than there is on the subject of abortion. Most people know Congress gets polarized on the abortion issue. They don't realize that we are even more polarized on things like energy. All of these different bills were passed in the House. And, of course, we did get some strong judges on the Supreme Court. Now, one of the things that has always surprised me from a policy point of view--aside from the fact that we can't seem to learn from the other countries that have gone bankrupt and the States in America that are going bankrupt because they are spending too much money--why is it that we have so much faith in big government? That is something that is a real puzzle to me. I think of another country that was founded on the idea of a great, great deal of faith in big government. This was a major world power, and their whole basic way of thinking about things was that the government is going to provide you with food, the government will provide the citizens with housing for a place to live, the government will provide the citizens with education so they can be well-educated, the government will provide them with a job, and the government will provide them with health care. So this was the idea that big government is going to provide you with food and clothing and shelter and a job and education and health care. What was the name of this big country? Well, it was known as the Union of Soviet Socialist Republics, the USSR. It was done by the Communists, and they felt it was the thing that big government could be trusted to provide all of those nice things for citizens. It turned out, as we took a look at it, that it wasn't such a nifty theory. It didn't work, and it created a great deal of poverty. And not only that, the people who had adopted that theory had failed to recall that historically one of the greatest dangers to human life is big government. Big governments have killed far, far more human beings of their own citizens than all of the wars of history. If you take the wars of history from the time of Christ forward, you will find that there weren't nearly as many casualties from war as there were just from the casualties of a couple of Communist dictators to what they did to their own people. That's not to mention the Nazis and other kinds of dictators that have likewise killed many of their own citizens. In the case of Stalin, about 40 million people were starved in the Ukraine. And, of course, Chairman Mao, not to be outdone, is noted for having murdered about 60 million Chinese. That is more, the combination of those people under communism, under the big government theory, killed more people than any wars. So why do we have so much faith in big government when we have seen its tremendous failures? And yet it seems over the past year and a half, the solution to everything is more taxes and more government. I don't see the logic of why we want to be doing that. So that is what is driving this tremendous Federal spending is this faith that big government has to do everything for us; and, of course, economically that is not a good approach. The result is we have gotten into this particular situation here. This is the actual money that the Federal Government takes in is the blue dot, and the red circle here is the money we are spending. Obviously, if you look at this, you can see the blue circle is smaller than the red circle. That says we are spending more money than we are taking in. What is that ratio? That ratio today is when the Federal Government spends a dollar, 41 cents of it is borrowed. Out of a dollar, 41 cents is borrowed. That is the difference between the blue and the red circle. Where is the Federal spending going? It is going to Medicare and Medicaid, which are now mathematically broken. Over time, if you run what is happening with these programs, you don't change the programs any, you just have more and more people asking for services out of these programs, that, in combination with Social Security, the dark red here, is growing at a rate that you could get rid of defense, nondefense and everything else, and you are not going to have enough money to run the government. This is really a crisis, and it is a little bit ironic that when the Federal Government cannot run health care, that is Medicare and Medicaid, which is currently the Federal Government's responsibility to be running Medicare and Medicaid, although Medicaid is passed on to the States to a degree, too, that we cannot run that well, and so what do we do? We are taking all of that over and have the government run all of health care with this new socialized medicine bill. Certainly the solution to that bill is only one thing: It must be repealed. It is the worst piece of legislation I have ever seen in Congress, and I believe that there are many, many other people who have the same opinion that the solution for America to move forward with decent health care has to start with a repeal of socialized medicine. You can see we are not running medicine too well with the government even before socialized medicine, and that is the problem with this excessive spending. And what happens then too is as the government grows and grows, you take money away from small businesses. First of all, they hunker down. They don't make decisions. They don't make jobs. They lay people off. But eventually you could make them sick enough that they close their doors. And guess where the jobs go? There will be jobs, they just won't be in America. They will be overseas. And that's the problem with the excessive taxation and the war that's going on in our economy on businesses and jobs. People have taken a look at various countries and looked at this problem with excessive government and the regulations and the increases, and we can see in 2001, that the United States was sixth in terms of an economic freedom index. I think this is calculated by the Heritage Foundation. And they took a look at all kinds of things like taxes, redtape and a whole series of other factors, and the United States is sixth with the particular list they calculated. We've dropped, just in 10 years, to eighth, behind several other countries. And one of the things that a lot of the European countries have discovered, and it's a little bit ironic because we always thought of them as being much more socialistic and Big Government in their solutions. They're finding that they're in a race to try to cut back on taxes on business because they realize businesses are the keys to prosperity, both in terms of jobs, but also in terms of government revenues. You have to remember that when the economy is sick, the State governments really take a beating, and so does the Federal Government. In fact, if you take a look at the early Bush years, 2001, 2002, what you found was the cost of the tax cuts that the Bush administration put together, including the cost of the two wars in Iraq and Afghanistan, that the total of that amount of money was less than the drop in revenue because of the recession. So when you have a recession, it's not just small businesses. It's not just citizens that take a beating. It's also governments that don't have revenue. So by cutting taxes all of a sudden, what happens? Well, what you find is that the government revenue starts to go up. You say, that's just like making water run uphill. Congressman Akin, you're an engineer. How can you say something that seems to be so hard to understand? How is it that the government could cut taxes and actually increase their amount of revenue that they take in through taxes? Well, the answer is pretty straightforward. If you think about it for a minute, pretend that you're king for a day and your job is to tax a loaf of bread. And so you're going to do--you've got to sort of think in your mind, now, how much tax am I going to put on a loaf of bread? Am I going to charge a penny per loaf? Or am I going to charge maybe $5 for a loaf of bread for taxes? Well, you start thinking, if I do $5 that's probably too much. People may not buy any bread at all. If I do a penny, I probably am not getting all the taxes I could get. Well, common sense says that somewhere there is an optimum amount the government can tax something that's optimum in terms of how much revenue you can get. And what's happened is the government has increased taxes so heavily that we're way beyond the optimum. And so, by reducing the amount of taxes, you actually can increase the amount of revenue because, as the economy gets going, it generates more jobs, more prosperity. And as you take a percentage of that in taxes you end up, even though it's a smaller percent, you end up with more tax revenue for the government, which is what actually happened in 2004, particularly, and 05 and 06. And so anyway, some of these different governments, these foreign governments are starting to realize, you know, the Americans were right all the time. JFK was right. Ronald Reagan was right. Bush was right. When you get in trouble, you want to drop taxes and cut government spending, and you don't want to get into this highly and excessive kind of government spending here. And so that's what they did. That's what many foreign countries figured out. And here we go along, the USA, and our tax on corporations is the second-highest in the world. It's like we haven't learned at all from the lessons that Europe has been learning. And so that's something we need to be paying particular attention to. Now, to add insult to injury, we not only are overspending, we're not only overspending by looking at it in a different way, we're not only hammering businesses with all kinds of regulations, redtape, with a lack of liquidity, huge and high taxes, but now, we've gotten to the point where we're that cynical here in Congress that we're not even going to create a budget. It seems like I think it's the first time this has happened in a very long time, that the U.S. Congress is not going to have a budget for the year. And maybe you could say, well, you haven't stayed in your budget anyway, so what's the point of creating it? But you've got to have some guidelines, some sort of rules that we're going to go by. And apparently, it's not in the cards that we're going to create a budget this year. All of these things are very concerning. All of these things affect Americans everywhere. And they're things that it's right that the American public should be upset, should be concerned about these things. And there is certainly a level of fear and anger in the general public because of the fact that we're not really paying attention to our business. We're not really being responsible economically, with our constituents. Now, all of this stuff about the economy, jobs, the Federal Reserve creating liquidity and low interest rates, I guess it can seem kind of mathematical or maybe even a little boring if it didn't have such a tremendous impact on the lives of everyday Americans and citizens. I think sometimes it's helpful to put a picture on what we're talking about. And in my own mind, as a guy who's responsible for earning income for my family, the picture that I guess I live in fear of is a picture of a house with a sidewalk out in front, and the family furniture, like a sofa and an easy chair and an ironing board, and I don't know what else, sitting out on that sidewalk because I couldn't afford to pay the mortgage payment on the house. And so the house has been taken away from me and the family. And I'm picturing a wife and some kids looking at Dad saying, now what are we going to do? Now where are we going to go? You haven't had a job in a long time, Dad. And that's being created by the wrong policies right here in government. And it's that reason that there needs to be a change, and there needs to be a whole new look at what we're demanding that the Federal Government does. What's happened is we have drifted from the idea of limited government, of the Federal Government primarily doing only the things that States cannot do for themselves. Originally, a couple of hundreds years ago the Federal Government was very boring. We only had about four laws to the books. We had a law against piracy on the high seas because that wasn't a State function. We had a law against counterfeiting because that wasn't a State function to take care of that. And we had a law against treason because when somebody is a spy on America, they're a spy on the whole country. So there were a very limited number of laws at the Federal level. And all of the other kinds of things, things like murder and stealing and all those things, were all State laws. Now we look at the Federal Government, and what do we want the Federal Government to do? Oh, we want the Federal Government to do food, and we want the Federal Government to do housing, and we want the Federal Government to do education. We've just taken over almost all of the student loans in this last year or two, so now the Federal Government's in the student loan business. And we've got the Federal Government in the car-making and the insurance business and the flood insurance business. And we've got the Federal Government in the food business and in the housing business, in all of these different things, which never, never were dreamed of by the Founders, that the Federal Government would get into the health care business and all of these different things. And so what's been the result? Well, the result, as you can see, is excessive spending. But it's been that chairs and furniture sitting out on the sidewalk, and the father trying to figure out, I've been looking for a job for over a year now, and I still don't have a job, and asking himself, what went wrong? Well, an awful lot went wrong. It started right down here when we started imitating the socialistic Big Government idea that the government is going to do everything for everybody. And the fact of the matter is, the government shouldn't and it can't, and we are getting a real lesson in that in these very days. And so it is that we've come taking a good look at where the problem started, the fact that we have done the wrong solutions, the solutions of excessive government spending, excessive taxation, taking away liquidity from small business people, and then, last of all, using the crack cocaine of the Federal Reserve to create tons of money and low interest rates. That will boomerang on us, just as crack cocaine does to a sick person, and it will continue to make our country sick until we can start to direct the Federal Reserve to control and regulate the supply of money in such a way that we don't create tremendous amounts of liquidity and inflation. I'm joined here this evening on the floor by a good friend of mine, the Congressman from Iowa who's noted as a businessman, a man of a considerable amount of common sense, a man who's not shy about expressing his opinions. And so it's a treat for me to just welcome my good friend, Congressman Steve King, if you'd like to share a word or two. We're about to close up.

Mr. AKIN. Wow, that's incredible. Now, that's 74 percent of what used to be private a couple of years ago has been nationalized, or at least under heavy national regulation and control?

Mr. AKIN. Controlling energy, controlling health care, controlling every financial transaction, it's like three nets of oppression, isn't it?

Mr. AKIN. Now, is that based on the amount of revenue that each one-- the size of the business? Is that how you figured it?

Mr. AKIN. That is a profound statement that you just made. It is so simple, and yet we forget it. Don't we?

Mr. AKIN. That might have been a direct quote from Scripture, though. So that's good. We are getting pretty close in time. Well, I am very thankful for the opportunity to share with my colleagues and friends my very deep concerns about the fact that we are doing the wrong things in the economy. And the solution is straightforward. It is cut taxes, cut government spending, and repeal the socialized medicine bill and get back to some sense of fiscal sanity and reduce the number of functions the Federal Government is trying to do. This isn't that complicated. It's been done before. There is all the precedent that shows if we do this it will work. But we are on the wrong track now. I do thank my good friend from Iowa, Congressman King, who has just been a stalwart of freedom and liberty. And God bless you and God bless the USA.

Mr. AKIN. Right. The first thing is on the taxation point, why would taxation kill jobs? You know, if you think about it--first of all, let's say, whereabouts are jobs? Well, 80 percent of jobs in America are businesses with 500 or fewer employees. So as you're saying you've got these small business guys out there, and all of a sudden the government just lets them have it with a whole bunch of taxes, the small businessman, the profit that his little business makes is viewed as he made a ton of money.

Mr. AKIN. Our businessmen said, That's the worst thing. I think their point was, You've got yourself a little machine shop or some business, if all your money is taxed away from you, you can't put a shed on it and add a new machine tool; you can't invest in a new process or a new idea or a new innovation. We've got a guy in my district and he actually has a farm over in Illinois, and I just love innovation in Americans. This guy recognized that there is a material that nobody seems to want in our country, and it comes out of the south end of pigs. And it's kind of smelly stuff. He has found some way to put pig manure into these big kettles, run the pressure up and the temperature up and turn it into a crude tar which he uses to make asphalt to make roads. And we have a section of road which is a pig manure road which apparently our Department of Transportation says is pretty good quality asphalt. You know, that's the kind of thing, though, you've got to have money to invest in a new idea, and if the government taxes all your money away, how do you create those jobs?