Rebuilding the American dream

Published 9:27 am Wednesday, March 11, 2009

Last year, Americans lost $14 trillion in net worth. That number is painful no matter who you are — it touches everyone from families, to college students, to small business owners, to family farms, to retirees. After such significant loss in our economy and the impact that is having on our lives, there is no question that we must act to restore faith in the credit markets, instill confidence among consumers, and reignite the economic engine of our nation.

However, the most dangerous principle we can assume as a nation is to say that because something needs to be done, that anything should be done even if it is wrong. When Washington has a knee-jerk reaction to major crises, each “fix” that is a misstep causes the situation to be worse than it was before, or permanently eliminates opportunities to take a second or third effort to restore our economy.

As we look back over the past few months, many of us recognize that our actions have made matters worse rather than making them better. In short, we’ve taken a bad situation and made it an extremely bad situation. Consider the following examples.

For the past several months President Bush, Chairman Bernanke, Secretary Paulson, and, until recently, President Obama continually told the American people that we would face “catastrophic meltdown,” “virtual shutdown,” or “irreversible recession” if hundreds of billions of dollars were not spent by the federal government in a matter of days and weeks. In doing so, they created a self-fulfilling prophesy. In response to this sky-is-falling approach, consumers across the country locked-down on their spending, severely hurting businesses and retail companies. We saw straight months of record decline in consumer spending, triggering businesses to cut down on employee work hours, reduce payrolls and many individuals lost jobs. When consumer spending makes up 70 percent of our gross domestic product, claiming that the end of the world was around the corner was not something we could afford to do.

Additionally, we passed billions of dollars in bailout after bailout, without basic principles of accountability, transparency, and effectiveness. I am one of only 17 members of Congress who has consistently voted against all of the bailout and stimulus packages — under both Presidents Bush and Obama — for the simple reason that I wasn’t convinced they would work. We gave money to banks, which never got to consumers for loans to buy cars, homes, and any other goods and services that keep our economy going. The most recent economic stimulus package was a $790 billion package that primarily redistributed what is left of our economy rather than seeking to rebuild our economy. On top of that, the new federal budget released last week by the White House projects a deficit of $1.75 trillion for just 2009, a shortfall for one year we have not seen since the years of World War II.

As a result of these actions, the American people have lost confidence in their government and we’ve saddled our future generations with enormous debt that will put great pressure on us in terms global competitiveness years down the road. However, we cannot allow the situations of the past year to prevent us from continuing to seek the best course of action for our economic situation.

First, we must apply the same confident and resilient attitude that has made our nation great towards our current economic situation. During his presidential address last week, President Obama finally began to provide a message of optimism towards our economy.

Second, at the very least we must make sure that our rhetoric is matching up with our actions. Right now, the American people do not see this happening with their elected officials in federal government. We hear calls for balancing the budget, yet we still see more “stimulus” spending that will postpone any serious effort to balance the budget for a decade. The president has talked about cutting the deficit in half, but we just increased our deficit to one of the highest amounts it has been in the history of our nation. The federal government continues to ask families and businesses to sacrifice their tax dollars for legislation that no one is sure will work, while each new spending proposal expands federal budgets more and more.

Finally, we must take an objective look at the economic situations in front of us. If ever there was a time that we needed an objective point of view, it is now. Unfortunately, the 24/7 sound-bite driven media is providing deliberate spin instead of the doing the fact-checking the American people need and deserve.

We must rise as a nation with unity of purpose to protect our jobs, protect our homes, and provide health care for our families. Right now, there are two views of America’s future. Some place their hope for the future in Washington; others place theirs in the work and ideas of the American people who realize that we cannot borrow and spend our way to the American Dream, we must earn it. And it is up to you and me to determine which direction we will go.