Finding America’s compass: A look at where we’ve been
Published 11:52 am Tuesday, May 19, 2009
Stimulus. Omnibus. Debt. Deficit. GDP. TARP. In the midst of today’s economy, it is confusing and daunting enough to navigate our personal financial situations, let alone master the many terms that impact our nation’s economy. Yet, Americans recognize that as consequential as our personal financial decisions are now, so too are the financial decisions being made by our leaders in Washington. So consequential, in fact, that the impacts and costs of the policy choices made in Washington will be felt by Americans both in the coming years as our nation works toward economic recovery and for generations to come.
This month, Congress — without my support — gave final approval to a budget that will create the largest deficit in history that will result in more debt in the next ten years than the entire amount of debt accumulated by the federal government from 1789 to today. And, throughout the course of the last year, the federal government has saddled the American taxpayer with the task of bailing out huge corporations, propping up failing quasi-government organizations, and providing hundreds of billions of dollars in “stimulus” programs — many of which will have little or no positive impact on the economy. Jobs, home values, and personal wealth have all faced losses over the last year and a half.
n Over the past 12 months, the number of unemployed Americans has increased by about 5.3 million, to 13.2 million as of March.
n There is an almost 10 month supply of houses on the market as of February. Five to six months of supply is usually consistent with a balanced market. Home prices have fallen more than 30 percent from 2006.
n The average household net worth with persons between 45 and 54 years old has fallen by more than 45 percent during the past 5 years, dropping to $94,200 this year from $172,400 in 2004. For seniors, the decline in wealth was nearly 50 percent in 2009.
n The ratio of household debt to the U.S. gross domestic product has reached 100 percent. That ratio did not reach 50 percent until the mid-1980s, and did not reach 70 percent until 2000. This means that if you added up the personal debt of everyone in the United States, it matches the amount we produce every year.
“But voting against these proposals won’t chart a course to a new economic future for America”
n A record number of Americans are filing for personal bankruptcy. For example, the Bankruptcy Court for the Eastern District of Virginia, which is located in Richmond, saw 619 bankruptcy filings in January 2009. That is a 145 percent increase from January 2008, which had only 251 filings. In February 2009, there were 755 filings, or a 172 percent increase from February 2008.
Congress has made many attempts to solve these issues through bailout and stimulus packages. I am one of only 17 of 435 members of the House of Representatives who voted against every one of these bills, however, primarily because these proposals lacked accountability, transparency — and most importantly — effectiveness. But voting against these proposals won’t chart a course to a new economic future for America. To understand how to begin solving America’s economic challenges we need to know where we have been and where we are going. Through the course of this two-part series, we will look first at the attempts of Congress over the last year to address the economic crisis and second at the principles that have made America great and how those principles can guide us toward solutions for economic recovery.
Especially at this time, your input and feedback is critical in my decision-making process. After reading this booklet, please send me your personal experiences and thoughts on how economic issues are impacting your family by e-mailing me through my Web site, http://randyforbes.house.gov.