U.S. House Candidate David Ratowitz (IL-5) Responds to SOTU Address

From the David Ratowitz for Congress campaign…

“The president’s proposals are like a surgeon only using the dullest and rustiest of scalpels.”

Like many Americans, I enjoyed the introductory comments of President Obama’s first State of the Union address. The president is absolutely correct in his assertion that Americans working together have overcome our greatest challenges. However, that is about where our agreement ends.

First, the president has greatly exaggerated the need for and effectiveness of the bank bailouts. While it is true that credit seized up late in 2008, the bailout merely reinforced the bad behavior that caused the financial crises to begin with. Instead of protecting depositors while allowing the reckless managers and shareholders responsible for their actions to lose their investments, the bailouts have increased moral hazard by reinforcing the belief that a select group of corporations can take risks insured by taxpayer money. What is worse, the toxic assets that threatened the solvency of irresponsible banks have been transferred to the federal ledger. The president touted bailouts, but the lack of transparency with which those bailouts unfolded have left the federal government on the hook for undisclosed liabilities. Our financial system is in more precarious shape today because of the bailout.

Compounding those mistakes, the president has proposed new and byzantine financial regulations that empower bureaucrats to determine winners and losers in the financial markets. Instead of allowing the natural consequences of risk taking to reward good innovation and limit the size of irresponsible institutions, the president has proposed using our tax dollars to bail out the most irresponsible institutions and then regulate their behavior in hopes of preventing further need for bailouts.

Next, the president has proposed a series of government interventions into the economy as a solution to the recession. His recommendations amount to taxing all of us, spending a portion of that money on the bureaucracy and political class, and then using whatever is left over to “stimulate” economic growth. The president’s liberal proposals disregard the historical mechanics of the United States economy. Eighty percent of new jobs are created by small businesses, and small business uses capital very efficiently. Government, by contrast, is the least efficient employer of investment capital. The president’s proposals are like a surgeon only using the dullest and rustiest of scalpels.

Americans have proven time and again that individuals are the best source of new jobs. The answer to bad government is less government, not more. What America needs is an immediate, across-the-board tax cut to keep more money in the hands of small businesses, which are best equipped to produce jobs. We then need a true balanced budget to make those tax cuts sustainable over the long term. The president, by contrast, proposes to spend our way out of this recession, the very same policy that failed Japan in the 1990s and the United States in the 1970s.

Instead of balancing the budget, the president proposes a cynical accounting sleight of hand. He targets a mere 12 percent of the federal budget to freeze for 3 years beginning in 2011. This means that the federal deficit, already unsustainable, will continue to grow at unprecedented rates for another year; 12 percent of the budget will remain at the breaking point, while the other 88 percent of the federal budget will be free to grow. This proposal is not merely wrong; it is precisely the opposite of what needs to happen. The budget must be balanced immediately and then reduced to alleviate the burden on the American people.

Having spent the first year of his presidency watching his bold but hollow ideas smashed upon the details of bad policy, President Obama has offered a confused agenda of government spending and interference. While the president has foregone boldness and audacity, he continues to place his trust in government and inefficient bureaucracies. As Republicans, we must remain firm in our opposition to government interference in the economy and out-of-control spending. We must not allow ourselves to be maneuvered into accepting pork barrel spending dressed up as “jobs” bills. We must continue to recognize and point out that government does not create jobs, business does, and that the only way government creates the conditions for recovery is by staying out of the way. Now is the time to hold fast to our beliefs. The American people are with us. We must make sure, at this critical juncture, that we are with ourselves.

Entrepreneur, Army veteran and conservative activist David Ratowitz is running for the 5th Congressional District Republican nomination in the February 2 Illinois Primary Election. Endorsements for Ratowitz include Tax Accountability, the political action arm of National Taxpayers United of Illinois; Cook County Commissioner Tony Peraica; Pioneer Press, a Sun-Times Media company; Republican Liberty Caucus; LibertySlate 2010; 32nd Ward GOP Committeeman John Curry; and North Town News Magazine and Jewish Chicago. The Ratowitz for Congress campaign platform supports a limited federal government, low taxes, fiscal discipline and accountability, free markets and individual liberty. Learn more about David Ratowitz’s campaign at www.ratowitzforcongress.com.

Copyright Publius Forum 2001