W. Akin

Mr. AKIN

Mr. AKIN. I certainly do yield to the gentleman from Ohio, Congressman Austria.

Mr. AKIN. Reclaiming my time, you started with the premise, though, that it is not the job of the government to tax people. Particularly in your particular position, you just couldn't tax beyond a certain level, whereas here in Congress, we tax. We just print some more money. And you started with a mindset that, no, you're not going to make life hard on your constituents. You're going to try and find smart things and ways to encourage the private sector to function. And that is something that we should be looking at.

Mr. AKIN. Congresswoman Foxx, you have a way of making it very straightforward and plain. I like that common sense. I believe we have a couple of guests here that would love to comment on that. Dr. Roe from Tennessee, why don't you comment on that.

Mr. AKIN. I will yield.

Mr. AKIN. Reclaiming my time, thank you for that question. Maybe I assume too much. Certainly that is what happened. JFK cut taxes. Ronald Reagan cut taxes. And in a very strategic way, President Bush cut taxes and turned around a recession. But here is a point we have to clarify. It is not just any tax cut. One of the things that has been done lately which has kicked this debt up tremendously was the fact that we just gave some cash back to every good old American on the street. It is a nice thing to do if we had the money, but to tax their children and grandchildren in order to give them a $1,000 or $5,000 paycheck, it is nice, but it doesn't help the economy. It isn't that kind of tax cut. You have to understand it is certain types of tax cuts. And those tax cuts have to have the effect of investing in entrepreneurs, the risk- takers and the productivity-generating sector of the economy. And that is why the dividend capital gains is a big deal.

Mr. AKIN. I do yield.

Mr. AKIN. If I could reclaim my time, let's talk a little bit about this because one of the things Republicans get accused of sometimes is that we are just a party of saying ``no'' and that we don't have any solutions. And that is absolutely not true. What is misunderstood is we just say ``no'' to a whole lot of excessive government spending. But there is a way to solve this problem. And it is the same thing that JFK did and the same thing that Ronald Reagan did. It is called supply-side economics. And it requires investing in these small-business kinds of people. And it means you can't invest in them and fleece them at the same time. This is the new set of taxes that the President is talking about. He says, ``oh, we are not going to tax anybody that doesn't make that much money.'' Well first of all, this cap-and-trade, all of this stuff in the blue, this is a tax that is going to anybody that pays electric bills. Does that seem like rich people? It doesn't to me. But anyway, that small business, one of their expenses is energy. And if you run their energy percentage up, and this will kick it up a good number of percentage, it makes them less competitive. And then you jump to the other side, and we have small businesses being taxed over here. This is not what you do. And if just those of us that are even here gathered on the floor, if we said, hey, okay, wise guys, you make a decision. How are you going to fix this thing? I think we would probably agree the first thing you do is you have to back off all of this Federal spending. And the second thing you have to do is you have to allow enough liquidity and capital to get to those small business people. There are different ways to do it.

Mr. AKIN. Reclaiming my time, that is what is disconcerting. That is why the stock market just gets hammered down, because decision after decision we are making doesn't really make sense, particularly if you look at it from the point of view of the small business person. They are just getting asked to pick up the tab on everything. And aside from having trouble getting credit, the tremendous level of spending is just vacuuming that money, that liquidity, out of the market. I would like to return to our good friend from Ohio, Congressman Austria. If you would like to jump in, I will yield.

Mr. AKIN. Mr. Speaker, it's a pleasure to be able to join you and my colleagues here today. Our topic today is something that is on the minds of Americans everywhere. It's the question of our economy, the seriousness of the recession and the steps that we are taking, whether they are constructive or destructive to repairing the financial condition of our Nation, our allies and of the world. I suppose it goes without saying that the recession is something that's serious. We can look at it in various different ways because it affects each of us in different ways. We could look at it from the fact that there are people who are husbands that have wives and children, who have mortgages that are due and no job and their bank account, already seriously whittled down, is shrinking even farther. We have those who have even been thrown out of their homes, those who have lost all of the money that they had saved for retirement, their 401(k)s are becoming 101(k)s. And it has a troubling aspect that we don't have any idea when is it going to let up and what will be the end of this ride, as the stock market goes down and down and people continue to suffer. One of the things we have heard about over the last 6 years from our liberal media and from others that are very critical of the foreign policies of America, as we stood up for freedom, was the tremendous cost of the war in Iraq, the war in Afghanistan. To put in perspective what we are talking about here on this economy, if you were to add up the cost of the war in Iraq, every day of it, and add up the cost in Afghanistan, and the first 5 weeks of this Congress in the stimulus--it was called a stimulus bill, I call it a porkulus bill--we spent more money, what we voted for in the fifth week here, than we spent in all of those wars, all of those years added together. So we are talking about a lot of money, and that's just the beginning. So I think it's appropriate for us to start out as we should. Instead of being too hasty and jump into things, to stop and just ask ourselves, how did we get in this mess? What policy mistakes did we make and what is our logical way forward? The good news I have for you, my friends, today is, is that there is a way home. The policies that are necessary to turn this situation around are available to us. History has shown us what works and what doesn't work. So a bright future is available, as it has always been for America, if we make the right choices. So, how was it that we got here? Well, the story starts some number of years ago, a number of administrations ago, when it came to people's attention that there were certain areas of some cities where you could live where it would really be hard to get a loan to own a house. We felt that it's part of the American Dream for somebody to be able to own a house. So, we created a couple of groups. One was called Freddie Mac and the other was Fannie Mae. And the purpose of these groups--they were not quite government agencies, but they weren't quite private either. The purpose of them was to be able to make loans affordable to various people. We also leaned on the bankers in those various communities, saying, As a bank, you have got to write some loans to people. Well, Who are we supposed to write the loans too? Well, People who don't have very good credit ratings. Let me see if I understand this correctly. What you're saying is, You want me to give loans to people, and it may be they are not going to pay the loan back. That's right. The government is telling you to do that. In addition, as Freddie and Fannie had been created during the last years of Clinton's administration, what happened was that Freddie and Fannie were given legislative instructions saying that they had to make more and more loans to people who couldn't afford to pay them. And at the time, in 1999, the New York Times had an article that said, Hey, we better look out. This is like the savings and loan deal about to happen all over again. We are about to make the same mistakes we made before. The mistakes were that if people can't pay these things back, then the securities that you package these different loans up-- and that is what Wall Street was doing, was packaging these securities--they won't be able to pay, and we are going to have a big problem because Freddie and Fannie, everybody assumes that the government will back up their loans. And if it's the government that backs them up, that means all of the taxpayers in America are going to be held hostage for loans that were made, and maybe to people that couldn't afford to pay them. And so this article was written in 1999, warning: Savings and loan scandal. Look out. We are starting to do the same mistake we made before, 10 years earlier. But we didn't pay attention. By 2003, President Bush is also reported in the New York Times saying that what is going on in Freddie and Fannie is a big problem. It could create a whole lot of economic trouble for America. I need the authority to regulate Freddie and Fannie, the President was telling us. That same New York Times article said that he was opposed by the Democrat Party. In fact, the recent chairman, and this is an actual quote from the New York Times, September 11, 2003, this is in response to President Bush asking for authority to regulate Freddie and Fannie. Now, this Democrat Congressman, Barney Frank says, ``These two entities, Fannie Mae and Freddie Mac, are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee, the man, I might add, who is working on the solution to this problem. ``The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.'' Well, anybody can be wrong. Some people can be terribly wrong. And, in this case, this mistake has turned the entire world economy upside down. And so we have a whole series of these loans. Now, you all know that what has gone wrong has been that these loans have been in default. But this is what started with the loan business and has now affected all of our economy. So, this is where the problem started, but it has now spread. So we have a recession. So, the question then is, this is where we got off track. We have the government spending just tons of money to try and turn this problem around, but the question is: How really should we go about fixing it. And I am joined here in the Congress today by one of our distinguished colleagues, a new Member, from the State of Ohio. Steve Austria has some experience in this area and is rapidly making a name as quite a sober and distinguished Member of our body. And I would like to yield to the gentlemen if you would like to make a comment on where we are and where we should be going.

Mr. AKIN. Reclaiming my time just a moment, what you said there was a mouthful, but it really makes a lot of sense. What we are doing is robbing the prudent to pay for the prodigal. The prudent and the prodigal. I think what he is saying in very fancy words is, we are punishing the guy who did the right thing. That is what is going on. In fact, there is a rule of economics; I think it says something that the more that you pay for, the more that you get. So if you pay for people to make bad loans, then you are going to get more of them. I think that is what he is getting at.

Mr. AKIN. Reclaiming my time, doctor, I appreciate what you are saying. When you really take a look at where we are here, the policies that we make in this House have a tremendous impact on people's lives. And a lot of times the people that get hurt very badly, just as the example you are talking about, and all of the other jobs that would have been created by that project moving forward, those people are hurt because of the policies that we made. And people want to say, this is a failure of free enterprise. This has nothing to do with free enterprise failing. This is a failure of a socialistic scheme to force banks and lenders to give money to people who can't afford to do it. And I assume this was done under the pretense of being compassionate. But I am asking myself, if I am the dad and somebody talks me into a loan that I can't afford and I am getting my house foreclosed, how is that compassionate? I don't really understand that. We are joined also by another just fantastic Congresswoman, and this is Congresswoman Foxx from North Carolina. She always has a real commonsense point of view, and I would like to have her join our discussion, if you would go ahead and proceed.

Mr. AKIN. Reclaiming my time, what you said is so important to understand. It is such a basic principle that we should never, never forget what you said here on this floor, and that is that what you tax, you're going to get less of. And what you pay for, you're going to get more of. I will yield.

Mr. AKIN. Reclaiming my time, I think one of the things you alluded to, gentleman, was the fact that what we are talking about is an unprecedented level of spending that we have seen in a very short window. We are a week or two into March. We didn't really come in the first week or two of January, so we have been at this an equivalent of 2 months, and we have been spending some money. We have been spending a lot of money. I happen to serve on the Armed Services Committee. When I think of trying to put a number on billions of dollars, I tend to think in terms of something that is tangible, like an aircraft carrier. For the Armed Services Committee, aircraft carriers are big and expensive. And we don't want them sunk, so we put ships all around them to protect them. We have got 11 of these. They cost about $3 billion apiece. So you take that $3 billion apiece for aircraft carriers into what we passed out of this House in this porkulus bill, $840 billion. We have got 11 of them. You are talking about a line of aircraft carriers, 250 aircraft carriers. We only have about 300 plus ships in the Navy. 250 aircraft carriers, that is a lot of money that we don't have that we spent. Now, what you are starting to see in this graph here, this is the deficit. Under the blue lines here, this is deficit under Republicans, 2004, 2005, 2006, and 2007. You see the deficits going down. 2008, 2009, and 2010. You take a look at what is going on to this deficit, and we are talking about deficits unlike anything our Nation has seen historically at all. We are talking uncharted waters here, and that porkulus bill at $840 billion is just part of it. As you mentioned, we had that other Wall Street bailout bill for $700 billion. Half of that we did this year, also. That takes us over $1 trillion. We are talking about some real change here, and a change unlike anything we've seen before. This is the sort of change that the government will have a lot of money, and you and my constituents will have nothing left but change, I am afraid. I notice that we are also joined by a member of your class, gentlemen, a distinguished doctor from Tennessee, Congressman Phil Roe. I would love to have him jump in.

Mr. AKIN. Reclaiming my time, I'd like to lay a little bit of groundwork, if I could, along the lines, because what you're doing is getting right into the idea of solving the problem. Being an old engineer, I like solving problems. But I think it's also helpful here, if you will allow me to jump in a little bit, to say that there are two theories that are out there about what do you do when you have a recession. I think most people understand we have got a recession on our hands here, and they realize it's pretty darn serious because there's all these jobs that people have lost. Things are not going the way we'd like to see them go. So, what are you supposed to do in this? Well, there are two general ideas. One of them was tried by FDR some years ago. It was called Keynesian economics. Little Lord Keynes, a weird little guy, and he had this idea if you get in trouble financially, what you should do is spend like mad and it will make everything okay. It seems a little bit odd. I think most of the people in your district in Ohio, my district in Missouri, have enough common sense that when you get in trouble, you don't go out and buy a brand new car and run up the debt. You hunker down a little bit. That may be a Missouri term, to hunker down. You know, to hunker down like a toad in a hail storm. Things are getting bad so you're going to save some money. You're not going to spend as much money. So the idea that when you get in trouble, that you're going do spend money like mad, seems to offend the common sense, I would say, of most Americans. Yet, that is a common political theory. And so this guy, Henry Morgenthau, he was the Secretary of Treasury under FDR. He had this idea we have got to spend some money. So he does this for 8 years. Unemployment is terrible. It's the Great Depression going on. In 1939, he appears before our Ways and Means Committee right here in Congress, and this is his statement about their wonderful experiment. ``We have tried spending money. We are spending money more than we have ever spent before, and it does not work. I say after 8 years of the administration, we have just as much unemployment as when we started, and an enormous debt to boot.'' Now, this guy is the father of this Keynesian economics, the idea that can you spend your way out of trouble. That is one theory. The other theory is one that the Republicans subscribe to. This is one the Democrats tend to like and, apparently, are following, even here as we speak. The other one is what is sometimes called supply side economics. And it's the idea that those 80 percent of those people creating those jobs, the small businesses, the entrepreneur, the investor, and the risk-taker, the people that work and create productivity, those are the ones that you have to empower to be the engine to pull America forward because government doesn't create prosperity, it either taxes or spends or slops money around, or it creates a whole lot of debt, but it doesn't create anything where it creates any prosperity. It can only move money from one person to another. And so the other approach is to do as you are saying, gentleman, you have got to work and you have got to empower those small business people. But when you spend tons of money, that takes the liquidity away from the small businessman and you make it so that he can't go. And that is what they did for 8 years. Unemployment just stayed high, and they spent tons of money; and when they got all done, they said it didn't work. So I wanted to lay that down, because I think people have to understand there are two basic approaches people are taking: One is spend a whole lot of money, stimulate the economy. And the Japanese bought that theory. They tried it. It didn't work for the Japanese for 10 years, and we can't seem to learn from them. And yet, the other theory was tried by JFK, by Ronald Reagan, and it has worked great. And so why don't we do the one that works? I am not quite sure why we are going down the wrong path. I want to yield to my good friend from Ohio, Congressman Austria.

Mr. AKIN. Just reclaiming my time for just a second, I really appreciate your starting there with the small businesses because a real solution has to take a look at where are the jobs. And small business, depending on how big you make a small business, but most people say 70 to 80 percent of the jobs in America come from small business. So you're starting at exactly the right place. Forgive me for interrupting, but I yield.

Mr. AKIN. I would yield in just a minute, but I note that my distinguished colleague from Ohio has started on the subject of small business. I recall that what you just said was that there is a certain level of uncertainty among small business owners. And just piggy- backing on that idea, let's just think a little bit about what that uncertainty might be. First of all, you have got dividends and capital gains, which is about to be repealed. That was something which allowed small businessmen to have more capital, to keep more of their own capital so they could invest that in their own businesses. What we are going to do is we are going to repeal that tax cut and therefore tax the small business owners because many of them are in the bracket that are going to get taxed heavily. So that is the first thing they have got to be thinking about. Then we're talking about we are going to be doing this cap-and-trade stuff on any CO2 that is generated. So, we are going to increase their cost of electricity. And then we are talking about going to a socialized medical system, which is going to make medicine more expensive for them. And then we see a tremendous level of government spending, which is vacuuming the liquidity out of the private sector, which makes it harder for them to get loans to make investments in their own companies. It seems like we are loading the dice against the very people who should be creating the small jobs. So I can understand why they come and visit my good friend from his district in Ohio. But I continue to yield him time.

Mr. AKIN

Mr. AKIN. Well, thank you, gentlelady. It's a treat to be able to join you this afternoon on the topic that I think arrests the attention of Americans everywhere, the state of our economy, and what should and could the government be doing about it? If we just back up a small amount and try to frame the question, we go back to a time, a number of years ago, when there were created these Freddie and Fannie quasi corporate entities. And what happened was, under President Clinton what happened was that they decided they were going to increase the number of loans that were going to be made to people who couldn't afford to pay their loans--which is a little bit of a risky thing. And so we created these entities and we issued a whole bunch of loans to people. And while the real estate market was doing well, it looked okay on the surface. And then, as everybody knows, what happened was the real estate bubble popped, and now all of a sudden you have this socialistic kind of policy that was implemented by the Democrats that was supposedly to help people with loans, and now the whole thing is collapsing and people say, well, this is a failure of free enterprise. It's not. It's a failure of another one of these government programs that's trying to take two plus two and get eight out of it. So that's essentially what happened. If you want to take a look at the New York Times, you can look at September 11, 2003. And you can see what happened in 2003, and that was the President, President Bush at that time, was saying, hey, we've got problems with Freddie and Fannie, you've got to give me authority to regulate these guys. And a Member of the House here, Congressman Frank, said there's no trouble with Freddie and Fannie. A couple of years later it turned out he was radically wrong, and now the whole world is in an economic tailspin because we had these loan programs. Well, that's where we are. So the question then becomes, what should we do? Well, obviously we shouldn't keep making loans to people who can't afford to pay them. But the other thing that you know in a recession is this; you don't want the government spending too much money. Well, why would that be? Well, because there is an effect that goes on. When the government spends too much money, it's like a big vacuum, it sucks that liquidity out of the regular private sector. And the private sector are the very ones that have to fix the problem. To get the economy going, you've got to get the private sector going. The government can do anything it wants, it can do handsprings and all this sort of stuff, but the government makes no wealth whatsoever, all it does is spend wealth. It can print money, it can tax people, it can spend money, but it doesn't create prosperity, it doesn't create efficiencies. It simply can hamper the process. So what's going on here? You've got two basic theories about what you do in a recession. One of them was started by FDR. And he had a guy, this fellow here that I have a quote, his name was Morgenthau. Morgenthau was Secretary of Treasury under FDR--and this is the first theory of what to do. And Morgenthau's idea was, we're going to spend a whole lot of money to stimulate the economy, and that will make everything better--because we're starting to enter into a recession back in the 1930s. And so Morgenthau, along with this Little Lord Keynes--who was a little weird--came up with this idea that they were going to spend a whole lot of money. And so they did it. And here at 1939, after he's done this for 8 years, Morgenthau meets with the Ways and Means Committee, and he takes a look and says, we've tried spending money. We've spent more than we've ever spent before, and it doesn't work. I say after 8 years of the administration, we have just as much unemployment as when we started, and enormous debt to boot. So that's one theory. The theory is--and this is one that the liberals have always liked because they love to spend money--is if you spend enough money, you can get out of trouble. It's a little bit like if I were to tell those of you here today, reach down, grab your shoe laces and lift hard and fly around the House Chamber. That's what this is like doing. And, you know, there isn't hardly an American family I can think of that's dumb enough to support this idea, and Morgenthau finally figured it out in 1939. There's not an American family that would say, when you're in economic trouble, go buy a brand new car, spend money like mad because maybe things will be better the next day. We just know intuitively, when you get in trouble, you've got to hunker down a little bit. That's what you do in Missouri, you've got to hunker down and use a little common sense. So this theory doesn't work. Now, what's the other approach? What do you do when you have a recession? Can the government do anything? Well, it can. What it should be doing is not spending so much money, which is the topic of the congresswoman's discussion this afternoon. We're doing the wrong thing, we're spending too much money. The reason that that doesn't work is it pulls money out of the basic, particularly out of the places in the economy that need to have money in order to create jobs and productivity. So, you see, jobs here, they had a big problem with unemployment. Eight years of government spending, they still had a big problem with unemployment. Now, what we've done is spent money like mad in the last couple of months, and people say, I'm not sure it's going to work. The stock market is saying, I don't think that's going to work. And history says, I don't think that's going to work. And the Japanese tried it and they say, that didn't work for us. You don't want to go spending a whole lot of money when you're in trouble. What do you want to do? Well, here's what you want to do. You want to make sure particularly that the small business people have enough liquidity to get their companies going. And so what you want is policies that are going to keep money in small businesses so they will invest because 80 percent of the jobs are in small business. You've got unemployment? You want small businesses going like mad to create more jobs. And so how do you do that? You let the small businessman keep money so that he can plow it back into the business, create the jobs that create the productivity. You need people who are entrepreneurs and who are inventors and investors. You want those people with the liquidity to be able to get the economy jump-started. And that means the government has got to stop spending money. Well, what way are we spending money? Wow, we're really spending money. This last thing that they called the stimulus package--I call it the porkulous package--I'm on Armed Services, we deal with things like military things. And one of the biggest, most expensive things in our budget is called an aircraft carrier. We have ships surround them to protect them. We've got 11 of them. They're really expensive and they're really big, and we protect them because 11 of them are very valuable. And they cost about $3 billion apiece. So what we passed in the House, do you know how many aircraft carriers you could buy for the money we borrowed that our kids and grandchildren have to pay back? You could make 250 aircraft carriers. Can you picture 250 aircraft carriers in a row? That's an incredible number. Or if you want to look at it a different way, you've heard us complain, you've heard the media complain about how big the spending was in the war in Iraq and Afghanistan. Add the spending in Iraq and Afghanistan together totally for both wars, add it up. Well, we spent more than that in the first 5 weeks we were here in Congress this year. That's a lot of spending. And now here we've got, on top of that, here's the President's tax increases for 2010. And what exactly does this big tax policy do? One, this is cap and trade. What this is is global warming, which means your electricity and your power is going to be more expensive. Guess who uses that? Small businesses. This is going to be hammering not only to small people, not people making a lot of money, the little guys. You have to pay an electric bill? You're going to get hit with this tax. This bit about this is just for rich people is baloney. If you have an electric bill, you're going to pay this tax. And this one over here is on small business. Both of these things affect small business. This is exactly the wrong thing to be doing. Tax increases is not what we should be doing. We should be going in the opposite; we should leave the money in the small businessman's pocket to create the jobs. And the gentlelady, Congresswoman Bachmann, I really appreciate you taking some time to talk about the economics because this is on the minds and hearts of Americans. I appreciate your sharing a little bit of your time on the floor with me. I see you have some other distinguished colleagues here that are very qualified to talk on this subject, so I don't want to rattle on too long. But I thank you very much for giving me a few minutes.

Mr. AKIN. I think you're absolutely right. And that is definitely my point. The point is is it was tried under FDR. You can at least say they were trying a new theory of how to get the economy going. And they tried it and it didn't work and he made it clear it didn't work. And now, apparently the Japanese didn't learn too much from our history, so they tried it for 10 years, did all kinds of government spending like mad, and they basically wasted 10 years of the productive use of their own economy because the Japanese knew it didn't work. And the thing that's ironic is, not only do we know what doesn't work, we know what does work. JFK and Ronald Reagan, both of them did the right kind of tax cuts. The economy turned around. We had long periods of very productive, good economic times in America because they did the right thing. Why don't we use the good example? Well, I think part of the reason is is because we have a mindset now in Washington, DC. that big government is God and it knows better how to spend our money. And we just like spending a whole lot of money, but it's not what's going to make the economy better. And there are going to be more and more of your and my constituents who are going to be suffering because they don't have jobs, they've got mortgages that are too big, and they're really feeling the squeeze. And it's a shame when you can't learn when history is staring you right in the face. But I really appreciate your putting the focus where it belongs in this excessive government spending. And you can take a look at billions and billions of dollars--and the numbers just seem so big, but when you put it in perspective, the whole war in Iraq, the whole war in Afghanistan, added together, spent by this House in the first 5 weeks of this year, that's a lot of money, that's an awful lot of money. But I do see we have some experts on the floor, and I thank the gentlelady for yielding me time.

Mr. AKIN

Mr. AKIN. Madam Speaker, I'm just delighted to be able to join you here this evening and join my fellow colleagues in talking about some really, really exciting and important topics. The first we're going to talk about this evening is the economy and a little bit of the background on what's going on, where we've come from, where we should be going in the future. The second topic is going to be the topic of freedom. One of the things that I have a chance to do is speaking to many audiences is to ask them, what is it that makes America such a special place? Why is it that we love our country so much? And our country is so unique in so many different ways. What is the secret to that unique nature of America? And the word that always comes out is the word ``freedom.'' It's right near the front of the tongue for most Americans. We're going to be talking a bit about the subject of freedom tonight. But before we do, we do need to take a look at the economy, what's going on there, and what's happened in the past and use that as somewhat of a guide as to where we should be going in the future. The economy, of course, works on numbers. And numbers, you can't cheat with them too much. People try to, but the bottom line is, somebody ends up having to pay. And so what we have here, going on in Washington, DC in the last number of weeks has really been incredible. We've charted absolutely new territory, I think irresponsibly. And we have heard for the last 6 years about the tremendous cost of the war in Iraq, how we're wasting money there every single day. And yet, if you add up the entire cost of the war in Iraq, which we now concede is largely won, you take those 6 years of costs, add them to the cost of what we spent in Afghanistan, add those together now, and it's not as much as what we spent in the first five weeks here in this Chamber in this supposedly stimulus bill. Many people are calling it a ``porkulous'' bill. And so how is it that the economy got to the point that it would cause people to go into debt so tremendously, spend so much money? Well, the story really goes back a number of years. It goes back to the Carter administration and really the creation of Freddie Mac and Fannie Mae. What happened was there were areas where it was very difficult for Americans to get home loans, and there were places where banks didn't really want to loan to people for fear that they wouldn't be paid back. And so the Federal Government created Freddie and Fannie, and those organizations are neither private nor public. They're somewhere halfway in between. And so Freddie and Fannie were given authority to help underwrite people's home loans and, actually other kinds of loans as well, but primarily for home loans. Well, as time went along, various Presidents started demanding that Freddie and Fannie make more and more loans to people who would be considered subprime, or that's a way of saying not as good a risk. And so by the time that we had President Clinton, toward the end of his tenure as President, he required an increase in the percentage of loans that Freddie and Fannie were going to make to people who were considered to be not very good risk kinds of loans. And so, what happened was, you have Freddie and Fannie now underwriting more and more loans, and you started to get a snowballing kind of effect. At that time, in 1999, the New York Times, in its editorial page reported, I believe it was September, that several people mentioned that this is not safe, that we are starting to create the environment for another savings and loan disaster in America. This is 1999, people were warning that this policy was not a good one. Was it a free enterprise policy? People say the reason the economy is bad, it shows the weakness of free enterprise. No, it doesn't. What's created the problem with our economy has nothing to do with free enterprise. It's socialistic programs of government jumping in and telling banks and economists that you have to take loans which we think there's a very good chance people will not pay back. Well, as the 1999 article in the New York Times indicated, this was a risky thing. As we move forward, we have Greenspan then reducing the interest rate, the economy getting stronger and stronger, the housing market just going up and up and up, increasing at a tremendous rate. In fact, if you looked at its rate of increase historically, you would have to start to worry that it might have been a bubble building. Well, by 2003 we have President Bush. And President Bush has come to the Congress. He says, hey, this is reported in a September 11, 2003, article, again in the New York Times, saying, I need authority to regulate Freddie and Fannie. We have got big trouble with Freddie and Fannie. They are making all of these loans and if the real estate market comes down some there is going to be the dickens to pay. You have got to allow me to get Freddie and Fannie regulated. And in the President's request, the Congress, in those days, run by the Republicans, passed a bill to regulate Freddie and Fannie. They sent the bill to the Senate, where it was killed, according to this article, by the Democrats in the Senate. Now, you have, in that very article that's quoted here, the New York Times, September 11, 2003, this is the Congressman now who is in charge of fixing the problem that was created, basically, another savings and loan type of problem. These two entities, Fannie Mae and Freddie Mac, are not facing any kind of financial crisis, said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing. Now, in looking out the back window, looking through history, we see, Barney Frank was totally wrong. Freddie and Fannie are the heart of what has fallen apart and created a world economic crisis. The crisis is created by defaulting mortgages, and as that mortgage crisis has spread and continues to spread in the next couple of years, this is what's been driving the bad economy. So there's an irony here that the person from the House that's in charge of fixing the problem is the one who created the problem. Maybe there's some humor in there somewhere, I suppose. So I think we need to correct the rhetoric of various people that say that this is a failure of free enterprise. It's not. It's a failure of a big government program that was poorly managed, and it's like trying to make a dollar out of 15 cents. You can't give people mortgages when they're not going to pay the mortgages. Of course, it was more than just the Democrats. I'm not blaming this entirely on the Democrats. It was the start of a failure of Congress. Beyond the failure of Congress, you also had other culpable parties. You had some of the people who were rating, some of the rating agencies--Moody's and Standard and Poor's--and they were rating these mortgage securities that would have been chopped up and sold all over the world. They were rating them AAA. Now, how they could do that with a straight face, I don't know, but they fed again on the Wall Street tremendous level of speculation. So that's how we got where we are. Now the question is: Now that we've gotten ourselves a first-rate recession going, what are the things that should be done to try to fix the recession? There are two basic schools of thought on this subject. One of them is known as Keynesianism. It was made popular around the days of FDR. Also, it was something that was very much supported by Henry Morgenthau, who we're going to talk about in just a minute. I do see my very good friend, Congresswoman Foxx, from North Carolina, a lady who has won all kinds of accolades in the last year or two. We think of her a little bit as the toughest grandmother in the entire U.S. Congress, and if there's anybody who is pretty long in what we in Missouri respect, which is commonsense, Congresswoman Foxx is certainly long in that. I would yield the floor to you, gentlelady.

Mr. AKIN. Well, reclaiming my time, I really appreciate your perspective. And I wish we had a little bit longer amount of time to talk with you because I'd love to get into that subject of freedom a little bit. But I know that we've also got a little Texas wisdom here in the Chamber here tonight, and I just feel like it would be a shame not to yield to Congressman Gohmert from Texas, actually a former judge and a gentleman noted for a good sense of humor as well, and we need a good sense of humor on this subject; so I would yield to my good friend Congressman Gohmert from Texas.

Mr. AKIN. Reclaiming my time, last week we voted on what was called an omnibus. It was basically nine budget bills all in a row stacked together. And the result of that, just on the surface, was an 8 percent increase, which if you don't believe in increasing government, why kick it up by eight? That's the largest increase since back in the seventies under Jimmy Carter, Democrat Jimmy Carter. But 8 percent is really what it was because you've got to put all that porkulous money into the budget. When you do that, it's an 80 percent increase in the growth of all of these government programs. Somebody wrote a little note to me, I went to a Lincoln Days talk this weekend, and they said, the trouble with socialism is is that sooner or later you run out of other people's money. And I thought, that sounds like something that might have possibly been coined out in Utah. It's just common sense. I will yield.

Mr. AKIN. Reclaiming my time, lady, I think what I'm hearing you say is what we've been trying to emphasize all the way along. There are a couple of basic things we need to do with the situation that we're in, a situation that was created not by free enterprise, but by failed government programs that issued a whole lot of loans with government guarantees on them that people weren't going to pay. And so we got ourselves in a lot of trouble, but it doesn't mean that it's the end of the world. There are ways to fix these problems. America has been through a lot of hard times. A lot of people are kind of discouraged right now, but they don't have to be. There are solutions, it's been done before--J.F.K. did it, Ronald Reagan did it, even Bush did it in 2003. You can see the result of the dividend capital gains--the exact effect of what you're talking about, putting money in the pocket of the small businessman--not putting it in, but just letting him keep it, just getting off the taxes on the small businessman. And look what happens here to gross domestic product. These are the years of Bush before this tax cut went in place. And take a look at what jumps. You go from an average of 1.1 percent to 3.6 year after year because of the fact you did just what the wise woman from Wyoming is saying. And then if you want to say, well, what happens when GDP goes up? Well, here you go; here's what the job numbers look like; same time period, May 2003, we do the dividend capital gains tax cut. These are all job losses below the line, everything above the line is a job gain. It's an investment just basically allowing a small business, like an engine, to have enough liquidity and money to be able to make it run so that it can create those jobs and put America--and the other chart that we're missing is what happens to Federal revenues. And Federal revenues go up like a rocket because you've got all these people working and the economy going strong. We are also joined here this evening by Congressman Chaffetz from Utah. And it is just a delight to have you on the floor and to hear from some people out west. So I hope that you enjoy joining our little dinner conversation this evening. I yield.

Mr. AKIN. Reclaiming my time, are you saying in a way you've almost got a sneaky cut in defense spending? I yield.

Mr. AKIN. Well, I reclaim my time. And I would once again thank the gentleman from Indiana for joining us. We have all kinds of expertise here tonight. And Congresswoman Lummis from Wyoming, my understanding is Wyoming has only got one Congresswoman, if I'm correct. I yield.

Mr. AKIN

Mr. AKIN. Mr. Speaker, I move that the House do now adjourn.