It was one of the silliest moments of the presidential election when Republican John McCain announced he was suspending his campaign to rush back to Washington to help solve a suddenly serious financial crisis. Never mind that this crisis had been building for years thanks to foolish monetary policies encouraged by our government. They thought it wise to give exorbitant loans to people with terrible credit and no reasonable ability to repay those loans. But rather than pointing out that this “crisis” was the logical result of ignorant government policy (Google the Community Reinvestment Act and be amazed), John McCain contributed to the hysteria and helped bring us the foolish “Bank Bailout Heist of 2008.”
Many Americans have become understandably disgusted with the extraordinary amount of money being spent in Iraq…particularly because we entered the conflict on the basis of faulty intelligence. The government screwed up, and taxpayers are being forced to pay the bill. The five year cost of the Iraq conflict, according to the liberal blog Think Progress, stands at $648 billion. But the one-day cost of the Emergency Economic Stabilization Act (the bailout) was $700 billion.
What is most appalling about the Paulson-Bernanke bailout plan is its ineffectiveness. Half of the money that the U.S. government lifted from the taxpayer has been spent, and what have been its fruits? Deepening recession, depressed markets, and an increasing number of corporations approaching the government with outstretched hands demanding a bailout similar to that which the financial industry received. And even after acknowledging the bailout plan wasn’t going to work, President Bush’s Secretary of the Treasury Henry Paulson (the architect of this grand scheme) still plans on spending the last $350 billion of our money. Throwing good money after bad has become a specialty of Washington politicians.
But at least one representative wants to try something different, and its time that Americans shed ideological labels and get behind his plan. Representative Louie Gohmert of Texas has come up with an innovative and incredibly logical idea: bailout the taxpayers. Rather than spend the last $350 billion of taxpayer money in the same pitifully ineffective way the first $350 billion was spent, why not use it to fund the operation of government for two months, giving every American taxpayer January and February off from paying any federal taxes? That’s right: you, the American taxpayer, would pay no federal income or FICA (social security and Medicare) taxes for two months. He calls it a tax holiday. I call it fantastic.
Since the average American pays roughly a third of his income to the federal government, an easy formula for calculating what you would make in this “holiday” is to take your gross pay and multiply it by 0.66. So, a family making $50,000 a year would get nearly $3,000 of their money back.
What would that do? Well, it wouldn’t pay for Wall Street bonuses. Instead it would spend the $350 billion in a way that would allow the real engine of the American economy—the American worker—to get back on his feet. As Gohmert said, “Those who can’t catch up on their mortgage [will be able to]. They’ll be able to buy stock that they can’t currently buy. New cars bought, new homes, new buildings being built.” And rather than the foolish concept of letting a Washington bureaucrat dole out money through central planning, the people would be able to spend it as they wish because people “always do better with their own money than the government does.” After $648 billion in Iraq and $350 billion flushed down the bank toilet…Amen.
But would the government be able to function without our tax money for those two months? According to American Solutions, the American taxpayers pay $101 billion in income taxes and $66 billion in FICA taxes every month. That’s $167 billion for January, $167 billion for February of 2009 for a grand total of $334 billion. There’s $350 billion of our taxes sitting there as a result of the bailout bill waiting to be spent. So, which is better? Throwing it down the same garbage disposal they did with the first half, or funding government for two months and giving the taxpayer a much deserved bailout? This is a no-brainer.
Unfortunately, the power of lobbyists, special interests, and ideological labels in Washington is a lot to overcome. So much so that Speaker Nancy Pelosi is unlikely to let Representative Gohmert’s plan even come to the floor for a vote. That is unless the people—the one power greater than all the inner Washington elites—rise up, contact their Democrat and Republican Congressmen and demand a bailout for the ones who truly deserve it: the American taxpayers.
Peter W. Heck