Laptop Report
Tuesday August 31, 2010 - Risk and Return
Risk and Return: People and businesses make economic decisions every day. To spend or not to spend; to borrow or not to borrow; to lend or not to lend; to invest or not to invest. In making these, and arguably almost any decision, we weigh whether the benefits and return from taking that action outweigh the costs and risks. If you believe that your potential return on an investment is greater than the risks, then you are likely to do it. If you think the benefit of buying something is equal to or greater than the cost, then you will spend that money.
Thursday August 19, 2010: A Stimulus Update
Stimulus: Money from the ill-concieved $1 trillion stimulus bill is still pouring out. Remember that since we were already in deficit before the stimulus, 100% of these funds are being borrowed. So, just what are they being spent on? Well, Vice President Biden is kind enough to send each member of Congress a periodic statement of what stimulus money has been spent on in that member's congressional district. Last year, the VP's list to me included $2.6 million to install a "green roof" on a nearly vacant building which was being considered for demolition. The list he sent me this year had a total of 15 items totaling $24,878,506.
Thursday August 12, 2010 - August Recess
Quote of the Week: "No man's life, liberty or property is safe when the legislature is in session." - Samuel Clemens (Mark Twain)
August Recess: The tradition of the August Recess dates back to the very first Congress in 1790. Washington has miserable weather in August with high temperatures and high humidity. It is 96 degrees with humidity to nearly match as I write you this. Abraham Lincoln famously hated DC in August and would have gotten away but for that little matter called the Civil War. In any event, Congress has rarely been in session in August and in 1970, the August recess was actually codified. Very rarely has Congress been called back into session during that period absent declared war or a natural disaster of some kind.
But Nancy Pelosi's Congress is different. We were called back into session this week for a very important purpose - to spend, borrow, and tax even more than we already are. Yes only in this Congress does spending more money, borrowing more money, and increasing taxes become a national emergency.
The bill that we were called back to vote on (you can guess that I strongly opposed it) passed by a vote of 247-161. It will spend $26 billion of new money in the next 60 days. You will hear that this is for salaries of teachers, police officers, and firefighters. But the fact is, most of it is for Medicare and other welfare programs that were increased in the stimulus bill, but that doesn’t make for a good sound bite. Regardless of what the money is "earmarked" to do, it is going to go to states to plug their budget holes. They can designate the money for whatever they want, but the fact is that such money going to a state is fungible and the states don't have to change anything to receive the money. In the case of California, it will plug the budget hole for about 2 months. That's 60 more days that California can ignore the budget, which is of entirely the government's own making by spending too much. But there are a number of other states where they have budget surpluses and are cutting taxes. They will be subsidizing the badly managed states to some degree since they don't really need or want the money.
And 100% of this $26 billion will be borrowed. In theory, this borrowed money will be partially paid back through a tax increase on multi-national corporations that employ American workers. This new spending will be spent in 60 days and that tax increase will permanently encourage companies to employ more people overseas and leave their profits overseas as well. The rest of the "pay back" is in a reduction in the increase of the food stamp program put forth by the so-called stimulus bill. Notice that this is a reduction of the increase, not an actual reduction over a year ago. But this reduction will not even start until 2014 even though the money will be spent before the end of the year. That's a little like trying to convince your spouse that you can afford that new JetSki right now by simply reducing your spending on groceries between 2014 and 2020. My spouse would not buy that. I suspect yours would not either. But to this Congressional majority, it makes perfect sense. In spite of that, the Democrats who spoke on the floor said that they had been assured that these "cuts" to the food stamp program will be reversed before they ever take effect.
This bill will increase spending, increase taxes, increase debt, and kill more private sector jobs. Oh, and according to the Congressional Research Service (CRS), this little sojourn back to DC cost taxpayers an additional $15.9 million in expenses to fly us all back there and operate Congress again during the recess. So add that to the cost.
If we don't stop the spending and borrowing spree and start to enact policies that reward private sector growth and risk-taking, this debt load will crush us all, including teachers, firefighters, and people on welfare.
I apologize for the rant, but every time I think that the Pelosi-run Congress will finally stop the madness, instead they double down on it.
Until next week, I remain respectfully,
Congressman John Campbell
Member of Congress
Tuesday August 10, 2010 - Recess and Spending
This missive, as I originally wrote it was to inform you that the House of Representatives has now adjourned for its traditional August recess.
Monday August 2, 2010 - Drilling Moratorium and other notes
Offshore Drilling Moratorium: One of the committees on which I serve is the Joint Economic Committee. This committee is primarily tasked with studying the U.S. economy, and consider factors which affect it.
Read more: Monday August 2, 2010 - Drilling Moratorium and other notes
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