Morning Bell: Christmas in September

For most Americans, there are 100 shopping days left until Christmas. But for the special interests in Washington, there are only 10 shopping days left with Congress tentatively set to adjourn for the year on Sept. 26. One would hope the financial turmoil on Wall Street would give legislators pause to revisit past mistakes. No such luck. Even though the last $170 billion stimulus did nothing to help the economy, liberals in Congress are now pushing for upward of $75 billion in new deficit spending. The left has been preparing this deficit spending plan for weeks, but it has gotten nowhere. Now liberals are using the latest headlines from Wall Street to push their plan.

In their more honest moments, both presidential candidates admit the current crisis on Wall Street is rooted in the falling value of real estate. Conservatives believe the market should be allowed to correct itself. One would hope responsible liberals would keep their proposed legislative fixes to addressing the housing market. No such luck. They are pushing for a wide array of goodies for their special interest allies, including new infrastructure spending, bailouts for states that can’t manage Medicaid costs, subsidies for alternative energy, subsides for home heating oil, increased unemployment benefits, and a bailout for the auto industry. None of these items is designed to help stabilize home prices in the short or long term.

The biggest piece of the left’s plan is billions in deficit spending for infrastructure projects liberals say will create jobs. And they are right, the government’s checkbook can create as many jobs as it wants. But at what cost? A 1986 Government Accountability Office (GAO) study of a multibillion dollar infrastructure spending plan found that each job created by the government cost $546,136 in 2007 dollars. There simply is no such thing as a free lunch. For every job “created” by government spending, there are offsetting job losses due to decreased private consumption and investment.

A taxpayer bailout of the auto industry makes even less since. Many Americans are facing tough times, but we cannot spend our way out of the problem. Lower tax rates, reduced barriers to trade, an end to systemic risk in housing markets, and fewer government restrictions on American energy production are a better way to go.

Quick Hits:

• Barack Obama supporter Oprah Winfrey is telling her 44 million viewers to pressure Congress to support a spending bill authored by Sen. Joe Biden (D-DE) and opposed by Sen. Tom Coburn (R-OK).
• David Petraeus, the U.S. Army general who presided over Iraq’s pullback from the brink of all-out civil war, relinquished his command Tuesday to Gen. Ray Odierno.
• An FBI report showed a decline in crime in almost every category from 2006 to 2007.
• Iran has stopped providing information to U.N. nuclear inspectors and, according to the the International Atomic Energy Agency, has substantially improved the efficiency of its centrifuges that produce enriched uranium.
• Government studies show many employees under the Federal Employees Retirement System (FERS) suddenly become ill in their final year of work, costing the government an estimated $68 million a year.