Former speaker of the Colorado House of Representatives, Dickey Lee Hullinghorst, recently took fiscal conservatives to task, including me personally, for railing against the Obama stimulus spending package back in 2009, but not Trump’s stimulus now.
Her criticism is not without merit.
The Tea Party movement was born out of the outrage over the $800 billion Obama and Democrats (there was almost no Republican support) stole from future generations.
I remember speaking at many rallies condemning not only Obama’s debt spree, but also how the money was being spent on politically driven pork projects. The largest rally had some 10,000 people at the State Capitol.
Of course, such examples of free people exercising their right of free speech and peaceably assembling to petition government for a redress of grievances is now illegal. Not that anyone in the media or the social justice left seems to care.
There is a major difference in the reason behind the stimulus back then and now. Back then, bad policy, namely the government guaranteeing loans to risky home buyers, finally came home to roost along with the turning of the business cycle.
By contrast, today’s recession was caused directly by governments ordering the shutdown of the economy. Obama didn’t order 17% unemployment (likely what we have now) in 2009. But governments did order it in 2020.
State and local governments just mandated the most dramatic public taking in American history (I’ll save the slavery and American Indian rhetoric for the angry comments section). Under the promise to “save lives,” mayors and governors have forced colossal unemployment and bankruptcy. The Fifth Amendment, if not decency, guarantees “just compensation” for this taking.
COVID-19 didn’t cause one single furlough or business shutdown. It’s just a virus, so far much less deadly than the Spanish Flu in 1918 or the Asian flu of 1969. A virus can’t make going to work a crime. Only politicians can.
The states should make it right to the people they have harmed.
Why do I say states? Overwhelmingly the federal government didn’t shut down America. Governors, mayors and counties did. Thus, most of the reparations for this shouldn’t come from the federal government, but from the states, cities and counties that put us under house arrest without due process.
Governor Polis brought the state to a grinding stop, unleashing economic devastation. That will also result in a big hit to his state coffers. What will he and most other governors demand? Even more free money from the feds to pay for the damage they caused.
Even more? Yep. As the Wall Street Journal noted, the $2.2 trillion CARES Act last month “included a $150 billion blank check to states plus another $90 billion for schools, public transit and Medicaid. To put these numbers in perspective: All state tax revenues during the last three months of 2019 totaled $254 billion.”
Washington just gave the states three months of free tax collections.
Free money is awesome. Few things feel better. When you give your kids free money, they love it. They didn’t have to earn it but, (and this is the key point) YOU did. In the real world someone needs to create wealth before the government comes to give it to someone else. However, that wasn’t the case under Obama with his $800 billion and it’s not the case with Trump’s $2.2 trillion now.
This is another example of “the cure being worse than the virus.” We’re making money out of thin air. It’s “Monopoly” play money. At best it is generational theft as we put it all on our grandkid’s credit card. At worst it is the beginning of the collapse of the dollar.
Flooding an economy with paper money, also called “fiat currency,” is often the harbinger of doom, be it pre-World War II Germany or Zimbabwe in 2008. Can’t happen here? In 2008 there were $7.4 trillion of U.S. currency floating around. Today there is $16.7 trillion and exploding.
While the reason behind “bailing out” the economy is much more solid than in 2008, the reality remains the same. Spending our way out of a recession by stealing from our kids and printing make-believe money is a far more dangerous game than any virus.
The safer path for human health and safety is to fully re-open America and fast.
Jon Caldara is president of the Independence Institute in Denver.