====== FOR IMMEDIATE RELEASE ======
America First Party
1630 A 30th Street #111
Boulder, Colorado 80301
Friday, February 13, 2009
More Dollar Busting, Toxic Stimulus Policies
Boulder, CO - With consumer confidence dropping to its lowest level on record in January, Congress is continuing efforts to stimulate consumer spending. The $789 billion plan, a combination of tax cuts and spending measures, would add to the $8.9 trillion of already existing federal commitments related to the present crisis, for a grand total of $9.7 trillion. This equals 70% of our GDP and 90% of the value of all domestic home mortgages. The largest share, $8 trillion, represents loan guarantees and loans under the Federal Reserve and FDIC. Recipients of these loans are unknown, even to Senate members.
In dollar terms, there is no logical limit to future stimulus efforts, since lawmakers have swallowed the notion that government fiscal resources are sufficient to alter the market's course. The present trend of skyrocketing debt and deficits may end when Congress sees diminishing returns; by then, future generations will face a greater load of inflation and debt, and the dollar may have only 10% of its present buying power.
The patchwork of policies being put into place by the Fed, Treasury Department, and Congress resembles a similar patchwork during the 1930s, collectively known as the New Deal. Unhappily, they caused wholesale prices to increase 23% in 2 years. In 1929, unemployment was 3%, and later peaked at 25% in 1933, the year that many key New Deal programs began. Despite these public works, subsidy, and price fixing programs, unemployment averaged 17% over the next 8 years, while the national debt doubled. Although unemployment dropped under the New Deal, it was not until World War II and 1943 that unemployment reached pre-depression levels.
"It is far from certain that fiscal stimulus programs will have more positive effects than negative in the long-term, and they are guaranteed to generate debt and inflation," stated National Chairman Jon Hill. "The stimulus may also delay recovery, but more importantly, it sets a dangerous precedent for federal involvement on a massive scale in the private sector, and is another big step outside the boundaries of the Constitution."
National Secretary John Pittman Hey stated, "Ironically, Fannie Mae, a New Deal stimulus program from 1938, is part of the cause of the crisis. If government had stayed within its constitutional limits in the 1930s, today's crisis would be lessened; we are now paying the price for the false belief that facilitating home ownership for low-income families is a federal interest."
Jonathan Hill, National Chairman, 1-866-SOS-USA1, ext. 4
Michael Lynch, Press Secretary, 1-866-SOS-USA1, ext. 2