What began early last year as a "credit crunch" and an "economic downturn" is now being characterized as a "long, severe recession." Once upon a time, such a crisis was known as a "depression" before Americans became squeamish about such stark language.
Should the stimulus bill be amended to place more emphasis on spending, or should it instead be amended to place more emphasis on tax cuts? That question defines much of the debate on the bill that passed the House without any yea votes from Republicans and is now before the Senate.
Common sense tells us that government cannot resuscitate the American economy and restore it to good health by spending more money and going further into debt. The government cannot spend money for its "bailout" and "stimulus" programs, after all, without siphoning the money out of the economy in the first place.
The House of Representatives yesterday passed the $819 billion American Recovery and Reinvestment Act, delivering President Obama his first major political victory and yet another setback to American taxpayers present and future. House Republicans, in a surprising display of partisan unity and commitment to principle, voted unanimously against the bill. Congressman John Boehner (R-Ohio) warned that such spending policies would bury the next generation under a "mountain of debt," while Congressman Dan Burton (R-Ind.) correctly pointed out that "free enterprise, less government and lower taxes is the way to solve this problem."
Congress is considering granting the Federal Reserve Bank dramatic new powers by this spring, according to the Washington Post for January 26. According to the Post, under draft legislation written by Financial Services Committee Chairman Barney Frank (D-Mass.), the Fed would “likely be given the power to gather information about the inner workings of banks, investment firms, insurance companies, hedge funds and any other entity big enough or so intertwined with other companies that it creates the risk of a systemic collapse."