[Congressional Record Volume 155, Number 22 (Wednesday, February 4, 2009)] [House] [Pages H1017-H1024] From the Congressional Record Online through the Government Publishing Office [www.gpo.gov] AMERICA'S FINANCIAL CRISIS The SPEAKER pro tempore. Under the Speaker's announced policy of January 6, 2009, the gentleman from Missouri (Mr. Akin) is recognized for 60 minutes as the designee of the minority leader. Mr. AKIN. Mr. Chairman, it is a pleasure to be able to join with some of my colleagues here tonight. And we're going to be talking about a subject that is, I believe, near and dear to many people's hearts, or at least of concern to many people. And I suppose one way to introduce this subject would be to take a look at something that has been in the news now for 6 and 7 years, and that would be the subject of how much money we have spent in the war in Iraq. Many people were observing that we were spending way too much money, that the budget was out of balance and we are just wasting money over in Iraq and in Afghanistan. And yet ironically, in the very first month of this new administration and this new Congress, we spent more money in that first month than what we spent in 2 years in the two different wars for 6 and 7 years added together. If you add all of the money spent in Iraq, all of the money spent in Afghanistan and add it all together, it is less than what we spent in the first couple of months of Congress this year. Now, how do we get to that point? What brought this about? If you want to try to take a look at how much money does that mean, that says that we spent in the first month more money than the entire tax revenue that we're planning to collect for the year 2008. It would be as if you had your own family budget, and in January you spent all of your income for the year. You have got 11 very lean months to take a look at. So how is it that we got to this point? That is what we are going to be talking about. We're going to have a nice kind of roundtable discussion with many people from different States. And so I want to back up just a little bit and take a look at how did we get to this point that we have the economy in the condition that it's in? Well, the story goes back quite a ways. It goes back to the Carter years. People found that as people were trying to get mortgages, particularly in certain areas of economically disadvantaged areas in various cities, that it was hard for them to get home loans. And so they put together the Community Reinvestment Act. And in a sense, what it was saying to banks is, you have got to take a few of your loans and loan them to people who it's not clear that they will be able to pay it back, because somehow or another people everywhere need to have a chance to buy a home and to own a home. Well, that idea was then followed up with the creation of a couple of quasi-governmental but also quasi-private organizations that were little known at the time called Freddie Mac and Fannie Mae. And those organizations were in the same business of trying to help people that were sort of middle-income buyers or lower-income buyers to be able to buy a house. And so they helped to write loans and underwrite loans. The theory was, at least implicit, that the government IOU was behind the things that Freddie and Fannie took care of. Then as we moved along further, we moved up to the Clinton era. Toward the end of Clinton's days, what he did was increased the percentage of the loans that Freddie and Fannie had to make and increased the percentage of them that were very risky loans. In other words, essentially what he was saying was that the government is forcing Freddie and Fannie to make loans and that we know an awful lot of them are not going to be paid. And of course when you start to mandate that quasi-governmental groups are going to make bad loans, then pretty soon you're going to have trouble. Well, this coincided then, as we move along a couple further years, to the era when Alan Greenspan drops the interest rates extremely low because the economy is tanking. In 2000, Greenspan started dropping the interest rates. And then you create this idea of, well, hey, if we have got all of this money at tremendously low interest rates, where are you going to park it? Well, let's park it in real estate because real estate always goes up. You can't make a mistake in real estate. [[Page H1018]] In my first early days here at Congress, boy, did I feel stupid that I hadn't bought a great big multimillion-dollar house, because if I could have just afforded the interest payments on it for 4 years, it would have doubled in value between 2000 and 2004 or 2005. Of course, I would have to have been smart enough to buy it in 2000 and smart enough to sell it by 2005. Well, as everybody knows, that old bubble popped. And increasingly all of these loans that were being made started in the process of defaulting. And it was not just people in economically disadvantaged areas that were making these loans. No. Wall Street got into the deal. And so did the speculators. And so what started to happen was you had people going out there and selling all of these loans. The local banks went through the Community Reinvestment Act and would make the loans. But as soon as they made the loan, they turned it right on over to Fannie and Freddie, assuming that if anything goes wrong, the Federal Government is going to bail them out. Then you get to the point where people are running around who are mortgage brokers. And they don't care what kind of job you have. If you want to borrow a half a million bucks, fine, because they simply write the loan, make the commission on the loan, and the loan is passed on largely to Freddie and Fannie. In the meantime, Wall Street was taking all of these loans, packaging them together and slicing and dicing them and selling them all over the world and making a great deal of money in the process as the housing bubble was going up and up. Everything looked pretty good. And then you had the rating agencies, such as Standard & Poor's or the other one would be Moody's. They were all giving these things Triple A ratings. This is good stuff. Everybody around the world, buy all of these loans that are made to people who we know really don't have the ability to pay these loans. And so now you get this situation where you're spiraling upward and upward. The bubble is about to pop. Did anybody see it coming? Well, the answer is, yes, as a matter of fact they did. President Bush saw it coming. He saw it coming in 2003. And he approached the legislature. He said, I have got to have the legislative authority to rein Freddie and Fannie in because these guys are going crazy making these loans, and it's going to mess the whole economy up. And so Congress, while we were in the majority in 2004, we passed a bill that allowed the President to have the authority to regulate Freddie and Fannie to stop this runaway train. It went to the Senate, and it was killed by the Democrats. Now let's take a look at what appeared in the New York Times, not exactly a right-wing oracle, about that very time, September 11, 2003. And this is part of the quote, September 11, 2003, New York Times, ``These two entities, Fannie Mae and Freddie Mac, are not facing any kind of financial crisis.'' Who would say that? Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ``The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.'' Mr. BROUN of Georgia. Would the gentleman yield? Mr. AKIN. I would yield to the gentleman from Georgia who is quite an authority on this subject. Thank you for joining us tonight, gentleman. Mr. BROUN of Georgia. Mr. Akin, I just appreciate your yielding time. I would like to clarify something you said here just for my own personal edification and I hope the edification of the people who are watching tonight. You said just a few moments ago that the President of the United States asked for more regulatory authority over Freddie and Fannie. Is that correct? Mr. AKIN. That's correct. That was 2003 in the New York Times, September 11, the President sees this coming, he says that we've got to regulate them more. I'm reclaiming my time. People are saying that this is a failure of free enterprise. This has nothing to do with the failure of free enterprise. This is a failure of socialism. Mr. BROUN of Georgia. That is what I wanted to clarify, if you don't mind yielding back a second. But the thing is, the President of the United States, President Bush, who I have not always been in agreement with on many things, but he was asking to regulate these GSEs, government-sponsored enterprises, Freddie Mac and Fannie Mae. And it was actually Freddie and Fannie, along with the Community Reinvestment Act, plus the low interest rates that were out there so that these subprime loans could be made. This is what created our housing bubble that just rose so quickly and then burst so rapidly that the housing prices went down. If I remember correctly, the Republicans in the House, we also, in fact, passed a bill. Is that not correct? Mr. AKIN. That's correct. We passed a bill. Reclaiming my time, we did pass a bill. And this is something that we saw as a problem. But as you will recall, the way that the Senate body works, while we sent legislation over to them, this article goes on to say the Democrats opposed it. And we did have the 60 votes to get it passed. So nothing was done. And perhaps if there is any blame that needs to be made on the economy being in the condition it's in, it really rests with the U.S. Congress, with the House and the Senate. Now these other rating agencies that said that you're going to give a Triple A rating to this trash, certainly they ought to have to be accountable as well. And certainly Wall Street was knowing that they were selling trash and rating it Triple A and selling it all over the world. It wasn't that they hadn't done some things wrong, but to allow that to happen, first of all, the Congress was out to lunch. Mr. BROUN of Georgia. But it was not the free enterprise system. It was not deregulation. It was not anything except for the Democrats here in Congress that blocked regulation. And it was, actually, there were programs that were established by Congress. If I remember correctly, the Carter administration passed the Community Reinvestment Act initially. And under the Clinton administration it was markedly expanded to force banks to make these loans where people couldn't pay. Is that not correct? Mr. AKIN. Reclaiming my time, my understanding was what Clinton did was not so much in the Community Reinvestment Act, although that was done with ACORN and all, but more particularly he specifically required that Fannie and Freddie make loans that essentially we knew weren't going to be any good. I yield. Mr. BROUN of Georgia. I appreciate that. So, the Community Reinvestment Act, and that is where I was going, and I appreciate your mentioning that, and ACORN became a bunch of thugs using extortion. That is what I hear from my bankers at home in Georgia, that ACORN folks would come in and threaten them because they couldn't expand their services and they couldn't put in ATM machines unless they would make these bad loans. And that is what created this whole financial debacle. And the blame, though, lies right at the feet of the people who are pushing this stimulus package saying it was free enterprise. Mr. ACKERMAN. Reclaiming my time, gentlemen. I think you struck something that strikes me as being a tremendous irony. The people who created the problem now are charged with fixing it. And that leaves us in kind of an interesting--and I think that the reason that I wanted to take a little bit of time with you, gentlemen, and knowing that you know this subject, the reason I want to take time on it is because sometimes people want to say, oh, we don't want to go witch-hunting or go looking at who we are going to blame. But on the other hand, if we don't understand how we got into the problem, we will end up doing the same dumb thing over again. And that is my concern. Mr. BROUN of Georgia. Absolutely. If the gentleman will yield, I'm a physician, as the gentleman knows. And in medical practice we look at problems and we try to find solutions to those problems. In fact, it is quite different from what lawyers do. Lawyers generally just argue problems. We try to fix problems. We try to find solutions to those problems. And so we look at all the symptoms. We look at the causative factors that come to bear in any disease entity. [[Page H1019]] Now we've got a horrible disease problem of a poor economy. The American people are hurting, hurting terribly. And we're right now in a debate about a bill that the House passed last week, the Senate is taking it up now. But there is in my opinion a tremendous amount of blindness by our colleagues, particularly on the other side, about what are the causation factors of the housing burst that has really created this economic problem that we have in this Nation. {time} 1745 And I commend the gentleman for bringing this up because that statement that the New York Times put in place, I think, is very indicative of what's going on now. And I heard the same people who were arguing back in 2003 and earlier against regulating Fannie and Freddie, those same people, when we were talking about the TARP funds, the Wall Street bailout, kept making a case that we need to make more of these loans in the name of affordable housing, make those loans to people who cannot afford to pay them. Mr. AKIN. Reclaiming my time, you know, gentlemen, somehow or other people want to try and package this as compassionate. I'm trying to think of people such as myself or other people in my district and what happens if you put someone into a house, and maybe they can afford a $250,000 house, and you put them in a $400,000 house, and all of a sudden, every month they've got that mortgage payment coming due; and the financial pressure, it starts to drive the husband and wife apart and make the children's lives hell as eventually they end up on a street side with their sofa on the sidewalk because they can't afford it. How is that compassionate? I don't understand. But gentleman, I note that we have some other distinguished guests here. Could we come back to you in just a minute? Mr. BROUN of Georgia. Well, I have to leave in a second. Mr. AKIN. I will yield. Mr. BROUN of Georgia. I'd like to tell you and the American public a story if you yield just another minute or two. Mr. AKIN. I yield. Mr. BROUN of Georgia. Okay. Thank you. I've got a friend who's in the timber land business. He buys and sells timber land. And he was telling me a story during this whole period of time when real estate prices were going up. He had a piece of property in my district on the market for $1.3 million. A gentleman came in and said, I want to buy your land. My buddy said fine. Here's the contract. The buyer signed it. Went to closing. My good friend, when he got to closing, of course, got his check for the $1.3 million. But he found out because of the problems with the banking industry making these sub prime low doc, no doc, low documentation, no documentation loans, that the buyer actually borrowed $1.7 million for a $1.3 million piece of property. So he put $400,000 cash money in his pocket. Now, if the property went up to $2 million or 2.1 or $2 million then the bank would be happy. Both the buyer, and the seller in this deal would have been happy, and everybody would have been fine. But my friend found out that the buyer had no job. He had no assets. He had no way to pay for this loan for $1.7 million. Mr. AKIN. So reclaiming my time, you're just giving an example of this absolutely crazy runaway policy that we have. It's basically a free money, you don't have any job, you don't have any money, borrow whatever you want and speculate and hope things work out right. Mr. BROUN of Georgia. Well, that's the point I was trying to make if the gentleman would yield. Mr. AKIN. I yield. Mr. BROUN of Georgia. That's exactly the point I'm trying to make is that this whole banking industry debacle was crazy and it was set up by policy that Congress established, and Republicans tried to do something about it because we, as the Republican Party, people here in the House, members of the Banking Committee in the Senate, Financial Services over here on the House side, realized that this was a disaster in the making and they tried to do something about it. And every effort that we did was blocked by the Democrats, who, right now, today want to force down the throat of the American people this stimulus bill that, in reality, is nothing, nothing but a steam roller of socialism that's being shoved down the throat of the American public and it's going to strangle to death the American economy, as well as the American people. Mr. AKIN. Reclaiming my time, gentleman, we are going to get to that very point that you're making, and I thank you so much, Congressman Broun from Georgia. And I sometimes think of it as doctor, but now you're congressman. You've got a couple of different hats. I appreciate your just straightforward approach. This is what we're talking about that's hurting a whole lot of very small, very average people. And the thing that really makes me sick about it is we saw the thing coming, and not only has the American economy got a cold, we've given pneumonia to the rest of the world, and there are people starving because of these very policies. And somehow, putting somebody in a house that they can't afford, I don't see how there's anything compassionate about that. But we are joined by another doctor from the great State of Georgia as well, Dr. Gingrey, but maybe we should call him Congressman Gingrey. I would be happy to yield to you sir. Mr. GINGREY of Georgia. And I thank the gentleman from Missouri for yielding. And I thank my colleague from Georgia, Dr. Broun, for his timely and insightful comments. It's good to join with you this hour, Mr. Speaker, to try to shed some light on this issue, a terribly important issue to the American people when we're in these rather dire economic circumstances. But the big problem, of course Representative Akin and Representative Broun, Mr. Speaker, spent time explaining how we got into this mess. And I think it's very important that they did this and kind of set the stage for where we are today, why we're here, how we got there, what the problem is and basically, who's to blame. And certainly, if you do the math, connect the dots, it's pretty clear. I won't go back through that important information. But we're now trying to decide, Mr. Speaker, what to do about it, how to get out of this recession that we're in. And unfortunately, what the Democratic majority and what President Obama has recommended, I just don't think passes the smell test. I really feel that the likelihood of this being successful, when you look, Mr. Speaker, at the spending in this bill, this economic stimulus bill as it's called, where's the beef? I mean, the old expression--I don't see where there's anything or hardly anything in $825 billion that's going to do a whole lot of stimulating. Mr. AKIN. Reclaiming my time just a minute. What you're doing is you're fast forwarding a little bit. We started by talking about how did we get in this mess. I was going to make just a comment. Sometimes people say this is as bad as the Great Depression. Certainly it's not. It's not as bad as what things were under Jimmy Carter when we had double digit unemployment and double digit inflation. But we can make it that bad if we work at it and do the wrong things. So that's scaling it. Now, what you're talking about is we've got a solution that's being proposed. It's a solution that's proposed by the Pelosi Democrat Congress. We saw the vote on that last week. Not a single Republican voted for it. But they had a proposal, and I think it's great that we do have a problem. We acknowledge there's a problem, and they made a proposal. And that's what you're talking about, Doctor, and you're talking about the mechanics of what they're proposing, and I think we need to take a look at that. And what you're saying, from what I'm hearing you say is, you don't think it's going to work. And I yield. Mr. GINGREY of Georgia. Well, if the gentleman will yield to me again and I appreciate it. He said it exactly right. It is the Pelosi proposal, the Democratic majority proposal, the Harry Reid proposal. But it's certainly not the Congressional proposal, because we Republicans, Mr. Speaker, are part of that mix. And as the gentleman from Missouri points out, we were never consulted. There was no essentially no markup, no regular order. [[Page H1020]] And as Representative Akin says, the importance of getting it right-- you know, some people use the expression for goodness sake, don't just sit there, do something. Well, I happen to be a doctor too, an OB/GYN doctor, and I know a lot of times it's better to not just do something, sit there. The baby will come. But we're not recommending though that we do nothing, Mr. Speaker. We're just saying that when you've got a bill with 825, more in the Senate, billions of dollars in it, it needs to stimulate the economy for sure. And it needs to put people back to work for sure, not just maybe. And as the gentleman from Missouri said, we could make matters far worse than they were in the late 70s under President Jimmy Carter, and we could even get as bad as it was back in 1929, 30, 31, 32, so we want to get it right. And if the gentleman will bear with me just for a minute, I would appreciate it. I wanted to show a poster or two to just to kind of put the spending, the so-called stimulus, in perspective. And if my colleagues will look at this first poster, and the question at the top says, can you afford to pay for the Democratic spending bill? And basically, at $825 billion, the economic stimulus plan that's sailing through Congress would cost each American family more than $10,000 on average. More than $10,000. In fact $10,500. Mr. AKIN. Reclaiming my time, you're saying this is $10,000 for every family in America is what this thing is going to cost? Mr. GINGREY of Georgia. Exactly. If the gentleman will yield further. Exactly that's what I'm saying. And to put that in more perspective, the average family, for food, clothing and health care, an expensive line item in the family budget, food, clothing and health care, they spend $10,400 and for shelter, $11,600. Fully a third of that cost is what we're putting on their backs. Listen, colleagues on both sides of the aisle, wouldn't we be better off just giving every family in America a check for $3,000? And we could probably end up doing it a whole lot cheaper than $825 billion. And by golly, that would work. So that's what we're trying to do here tonight, Mr. Speaker, is just point out that there's a better way of doing this. We, in the Republican minority, who have not been included, not been asked except asked to vote for this thing, no questions asked, no amendments, we do have a better idea. And I know as we get further into the hour tonight, Mr. Speaker, we'll be talking about that. And I will look forward to that opportunity. I will yield back to the gentleman. I know there's others here on the floor that would like to speak on this issue. Mr. AKIN. Reclaiming my time, I appreciate, Doctor, and Congressman your joining us and your perspective. I think when you start talking about $800 billion or $1 trillion, those are such box car size numbers, it's a little bit tricky to put them in perspective. I think you've done a great job when you bring it down to the fact that the stimulus package that was just passed last week by the Democrats, that would be your medical care and your food and clothing for an average family. That's what that would be. That's how much it's going to cost an average family. Or you could say it's what it costs you to have your house. Those are significant numbers. I think it brings it home, and we really to ask ourselves what are we getting for this stimulus package? And with that, I note that we have a distinguished colleague of mine from all the way out on the West Coast, Congressman Dreier, who has been here a number of years and is really on top of these issues. It's an honor to have you joining us. I yield to the gentleman. Mr. DREIER. Thanks for reminding me that I've been around a long time. I appreciate that very much. Let me, Mr. Speaker, express my appreciation to my very good friend from St. Louis for taking this time to talk about what obviously is priority number one for working families all across this country, and that is survival; survival, because we all know how difficult it is out there. We're regularly hearing from our constituents that they are losing their homes, they are having a difficult time making ends meet. This afternoon I had the chance to meet with some local officials from one of the counties that I'm privileged to represent. And in San Bernardino County in California, the numbers of homes that have gone into foreclosure, it is mind boggling to see the challenges. And I will tell you, when you think of a young family out there, working, trying to hold things together and they're losing their home and having a difficult time making ends meet, we all know, Democrat and Republican alike, that it is absolutely essential that we put into place government policies that will help to address those challenges. Now, Mr. Speaker, my friend from St. Louis just brought to my attention an amazing quote that his 88-year old father brought to mind for him since he had lived through this period of time, that being the Great Depression. And it's a quote from the Treasury Secretary, I appreciate his putting this chart up there because I actually scribbled it down, and I don't know if I could read my scribbling of it. But I'd like to share it with our colleagues. The Secretary of the Treasury, Henry Morgenthau, in 1939, as we were tragically headed into the great World War II, and as we were, in large part because of the war, able to emerge from the Great Depression, had an amazing statement that he, as Franklin Delano Roosevelt's Treasury Secretary, at the end of the Great Depression in 1939, in his testimony provided before the House Ways and Means Committee. And in that, and Mr. Speaker, I commend this to my colleagues. He said, ``We have tried spending money. We are spending more than we have ever spent before and it does not work. I say, after 8 years of the administration,'' that being the Roosevelt administration, ``we have just as much unemployment as when we started, and an enormous debt to boot.'' What an incredible statement that was made by Franklin Delano Roosevelt's Treasury Secretary in 1939. And the last line, Mr. Speaker, an enormous debt to boot, of course, brings to mind the fact that in 1939, the American people and financial interests in this country were financing that debt. {time} 1800 Today, we know that that debt is coming from all over the world, that it is held by peoples all over the world, and that creates another very unique challenge for us. So I would say that, as we know that our constituents are hurting, I believe very, very strongly that the answer to the problem of the families who have lost their homes and of the people who are losing their jobs is not to put into place a $1.1, $1.2, $1.3 trillion spending package. We don't know what the size of it is going to be because, with $1.1 trillion, if you take the $347 billion in servicing, that would have been an $825 billion program over the next decade. It is being debated on by our friends, our colleagues, in the Senate now. As we look at that challenge, it seems to me that people understand that that is not the panacea, and nowhere is that made clearer than in the words of the Treasury Secretary who served under the great President Franklin Roosevelt when he said that we have tried spending money, that we are spending more than we have ever spent before, and it does not work. I say, after 8 years of the Roosevelt administration, there was just as much unemployment as when we started and an enormous debt to boot. Mr. AKIN. Reclaiming my time for just a minute, I appreciate your perspective because we can stand here and talk about boxcar numbers and economic theory and policy, but you are bringing it down to what it has to do with the guy in the street, what it has to do with me. There is a picture that always sticks in my mind. I don't know. You know, sometimes you take in mental pictures, and there is a picture that sticks in my mind. When we get talking about these charts and everything, I always want to come back to this picture, and that is a picture of a house, and sitting right there on the sidewalk is somebody's sofa. I think about the young dads who have just gotten married and who may have a kid or two, and they are struggling, and they are trying to keep their heads above water, and they tell their wives not to buy any food, and they tell their kids not to buy any toys. They are still trying to pay this [[Page H1021]] debt off, and they keep getting worse and worse behind. Finally, they go out there, and that is when they end up with that sofa that's sitting on a sidewalk. That is what we are talking about with these socialistic policies. Here it all started with this ``give somebody something,'' and somehow or other, Uncle Sam and socialism are going to make it work. Mr. DREIER. Would my friend yield for just one moment again? Mr. AKIN. I would yield. Mr. DREIER. I will say that, as I look at that last line once again, an enormous debt to boot, it brings to mind that child who is there. It is that child who is going to be shouldering the burden of a $1.1, $1.2, $1.3 trillion spending package that has been put before us, and that package has already passed through this House. Speaker Pelosi has announced that it is going to be completed by the end of next week. I wish very much that we would spend some time looking at what it is that we have offered as an alternative to create jobs and to allow people to keep dollars in their pockets. I thank my friend for yielding. I suspect that he is going to outline the very, very viable package which can provide that immediate boost which the American people want and need. Mr. AKIN. Reclaiming my time, yes. Gentlemen, thank you for coming to that point, because I don't like people to come in here and be critical and say that it's no good, that it will not work, and then don't offer a better alternative. The good news is that there is a better alternative. We don't have to be doing what we are doing. I noticed that my colleague from Georgia, again Dr. Gingrey, Congressman Gingrey, has got a chart here. Would you like me to yield, and do you want to explain what you have? Mr. GINGREY. I very much appreciate the gentleman's yielding. I thank him for that. I do have a chart I want to reference. First of all, Mr. Speaker, I want to say that the American people are beginning to realize that this is unlikely to work and that there is a tremendous burden that it is going to put on them. As I pointed out on the previous chart, it is $10,400 per family. Now, they don't get that. That is not any money that comes to them. That is the debt burden. Now, in fact, in a recent Gallup Poll--the very reliable Gallup Poll. Everybody has heard of Gallup--there was a survey of 1,000 adult people nationwide; thirty-eight percent were in opposition to this bill as proposed, and another 17 percent said no matter what they do with it, no matter what changes they make, this is not the way to go. It is just as Secretary Morgenthau knew back in 1939. I wish Secretary Paulson and Secretary Geithner could understand that. Just throwing more money at this indiscriminately is not going to solve the problem. It is just going to sink us deeper and deeper into a recession and possibly even into a depression. So, yes, we have some ideas, and of course, my colleagues are here, and they are going to present some of these ideas. I want to yield back to the gentleman from Missouri, but let me quickly reference the poster. ``Sizing up the Stimulus'' is the title of the poster. Again, just to put this into perspective, the proposed stimulus is $1.2 trillion when you include the debt service over 10 years. So it's $825 billion and then the debt service. Then you compare that to other expenditures, to very important expenditures--to the Vietnam War, which was $111 billion with a B, not a T; to the invasion of Iraq, which was $551 billion with a B, not a T; and to the New Deal. We were referencing that, and that is what Mr. Morgenthau was talking about. It was $32 billion, and he said it was way too much spending, and here we're talking about $1.2 trillion. Again, I think it would be better to cut taxes for everybody. We'll get into that later. I know the gentleman will do that, and maybe we'll give everybody a check for $2,500 rather than what we are doing. So I yield back to the gentleman, and I thank him for the time. Mr. AKIN. Reclaiming my time, I am also joined here today with Congressman Latta from Ohio. I believe he has got some charts and can help cast a little bit more light on exactly what this bill is that was just passed last week and what it means. It has $500 million for the National Endowment for the Arts. I wonder if that's going to get the economy going. It has got $54 billion for 19 programs that the OMB--that is the Office of Management and Budget-- said were completely ineffective programs. Yet we are going to put $54 billion into programs that, by our own definition, do not work. Particularly if you want to take a look at another one, there is $355 million for STD funding. That may put a totally different meaning on the word ``stimulus.'' Anyway, we are joined here by Congressman Latta from Ohio. Thank you for joining us, gentlemen, and I am interested in your perspective. I yield. Mr. LATTA. I appreciate the gentleman for yielding, and I also appreciate the comments that we have already heard from the gentleman from Georgia and also from the gentleman from California. Just to follow up, I was not going to speak to this, but if I may, I just happen to have in front of me the unemployment numbers during the Great Depression and the numbers leading into the Great Depression. I think about the statement from the Secretary of Treasury in 1939 and what he said about what the spending had done. When President Roosevelt was sworn into office in 1933, according to the Bureau of Labor Statistics, we had a 24.9 percent unemployment rate. Mr. AKIN. Reclaiming my time, let's get this number down. As to the number of unemployed when we started into the first big recession that was going to become the Great Depression, what was the percentage? Mr. LATTA. According to the Bureau of Labor Statistics, in 1933, when he was sworn in, there was 24.9 percent unemployment. Just to kind of jump forward a little bit to the statement that was made to the House Ways and Means Committee by FDR's Secretary of the Treasury in 1939, that number was at 17.2 percent unemployment in this country. So, when they were talking of their trying the spending and of their trying to see how much they could do by spending more and more and more to get these numbers down, it did not work. Just fast-forwarding a little bit, unfortunately, when we got close to entering World War II in 1941--when the United States was becoming that arsenal of democracy--we had an unemployment rate of 9.9 percent. Then through the main war years of '42, '43, '44, and '45, we saw our unemployment rate go down to 4.7, 1.9, 1.2, and 1.9 percent. Again, let's just think about that. We had 16 million Americans in uniform at that time. We had everybody working--we had everybody in the war plants. All of the women were working--so Rosie the Riveter was everywhere. That unemployment rate dropped, but it was because of World War II, not because of what was going on in the Roosevelt administration in the 1930s. Mr. AKIN. Reclaiming my time, your point is just what was observed by the guy who was doing all of this Keynesian economics, this guy Morgenthau. After spending us into tremendous debt, he just basically said, after 8 years, we weren't able to create any jobs, and you're saying it was basically World War II that generated the jobs; am I correct? I yield. Mr. LATTA. I appreciate the gentleman for yielding. That is absolutely correct. I don't think there is any economist out there who will say there was anything until we got into World War II when we saw the Great Depression break. Before Pearl Harbor in 1941, December 7, the unemployment rate was going down. Why? Because we had Americans working in those defense plants, who were making those arms that we were shipping overseas at the time, for example, under Lend- Lease. So we watched those numbers start to drop, and they really dropped, of course, during World War II when Americans were out there in uniform and in the defense plants. As the gentleman had mentioned a little bit earlier, one of the things that concerns me is: Where are we going with this debt? Because we just keep adding to it in this country. Mr. AKIN. I hate to interrupt you. Could I reclaim my time for just a minute? [[Page H1022]] We are joined here on the floor by another expert we have got, and I want to get right back to you, but Congressman Scalise is trying to catch an airplane pretty soon. I wanted to try to fit him in because I think he has an interesting perspective that just ties in beautifully with where you were going, Congressman Latta. So I yield to you, Congressman Scalise. Mr. SCALISE. I thank the gentleman from Missouri for yielding. I thank the gentleman from Ohio for yielding. What we have been talking about is a discussion we have been having here on this floor for the last few weeks. I am very encouraged that so many people across this country have started to really look at this bill closely and to recognize that, in fact, the bill that has been moving through the legislature here in Congress in the last few weeks is not, in fact, a stimulus bill. It is a massive spending bill, a bill that really will not do much to help get the economy started. The Congressional Budget Office reports, of course, show that very little of this money will go into the economy, but what it will do is add a massive additional national debt to a debt that is already over $11 trillion. We are already hearing that this bill is already approaching $900 billion. Some reports show over $1 trillion. In addition, the budget that is going to be presented in just a few weeks by President Obama is expected to be $1 trillion out of balance. All of this money that would be added to the national debt could add over 25 percent in 1 year to the total national debt of this country, whether or not it would actually provide stimulus to the economy. Most reports show it would not create any jobs. What it would do is increase inflation, devalue the dollar and put a tremendous burden on our children and grandchildren. I think that is why it is so important that we have worked so hard to come up with an alternative plan, a better way to solve this problem. That is, to go and look at tax cuts that will actually help middle-class families and small businesses that will create the jobs, not government spending, which in many cases has been spent on programs that have failed in the past and that create more government jobs. We need to be creating jobs in the private sector, and that is what I think is so encouraging. As we have been presenting these alternatives, I think people across the country have seen and have realized that this is a much better way. It is so important after the failed bailouts of the last year that we get this right, and that is why it is important that we have been talking about this as people are seeing it. I think they are realizing some of the same things that we saw in that bipartisan vote last week when not only all Republicans voted ``no'' but when, in fact, nearly a dozen Democrats also could not even stomach some of the spending by their own leadership and said ``no'' as well, because there is a better way. I appreciate the fact that you have been highlighting this, as have other Members, to show that there are better ways to solve this problem for the American people and to show how the American people have, I think, galvanized and have said the same thing. Big government spending in Washington is not going to solve this problem. Let's let middle- class families who are out there tightening their belts already in States that are trying to balance their own budgets show the better way as opposed to the failed old approaches of liberal, big government spending. So I think the fact that we need to look out for our children and grandchildren is an extra highlight and why it is so important that we get this right and that we solve this problem the correct way. That is what this alternative plan does. I yield back. {time} 1815 Mr. AKIN. Reclaiming my time, Congressman Scalise, thank you very much for your perspective, and I appreciate your optimistic and positive approach. We're not here just to say something won't work. We've got a better way to solve the problem. We've got something that has worked time after time historically, and the approach that is being proposed, which is just massive government spending, not only did it not work for Morgenthau, who was the guy who was the champion of this Keynesian economics for FDR, but it's never worked subsequently. It didn't work for the Japanese for 10 years, as they ran up huge debts, spent a whole lot of money. And the average American in this country has got enough common sense to realize that just dumping a whole lot of money, if you're in financial trouble and you're the captain of your own little family, you're not going to go out and buy brand new cars and run up a whole lot of debt. It doesn't make any sense. And for government to do that, the public knows that won't work either. But I want to get back to my good friend, Congressman Latta from Ohio, and I did interrupt you, and I yield to the gentleman. Mr. LATTA. I appreciate you yielding back, and I think what you're talking about is, when we're running up these debts, I'd just like to run across just numbers. Let's just go back. If you look at this number on this chart right now, we're looking at over $10 trillion, $10.6 trillion of debt that this country owes, but let's just go back a few years, and it doesn't take us very long to do this. In 1979, the United States debt was at $829 billion; 1989, it was $2.8 trillion; 1999, $5.6 trillion. And here we are 10 years later just doubling this number, when you look from 1999 to where we are today at $10.6 trillion. But the real question that really concerned me is this, not only that massive huge debt but who owns this debt, you know, and you start looking at this chart right here. Right now, $682 billion of our debt today is owned by China. Going across, you're looking at Japan. Japan owns $577 billion; the United Kingdom, $360 billion; the Caribbean Banking Centers, $220 billion; the oil exporters--we send our money over to them. They're using our money to buy our debt. They have $198 billion; Brazil, $129 billion. But it always wasn't this way. You know, in 1979, let's just go back a few years again. 1979, we had foreign debt of $119 billion; 1989, $429 billion; 1999, $1.2 trillion. These numbers are just escalating. And the problem we have today is this. We're having a situation out there is what happens when these other countries start stimulating their own economy and they start saying, you know what, we can't buy that American debt, who's going to be out there to buy that debt? And we have a couple of alternatives; either not issue that debt or have to put a higher interest rate out there to make these other countries want to buy our debt. Americans are saying we're not buying it; these other countries are. So I have a real concern of these problems, that other countries are owning our debt, that they could actually start dictating to the United States. The Chinese are telling us that we have to do something about our economy, you know. Mr. AKIN. Reclaiming my time, I think the gentleman, what you are saying is--and you're saying it in a pretty sophisticated way, but just some poor old guy from Missouri, what I think you are saying, just like when we issued all of these loans that people couldn't pay, what we're doing, in a national sense, is we're like running down a dead-end street, and pretty soon, as we keep printing more and more money and keep getting more and more foreign countries buying our debt, there's going to become a time, a reckoning, and boy, it's really going to be unpleasant when we hit that stone wall at 70 miles an hour. Is that getting in the direction of what you're saying, Congressman? I yield. Mr. LATTA. I appreciate the gentleman for yielding again. Again, you are absolutely correct. We're hitting that situation right now. The rest of the world is looking at the same problems that we're having in this country, but we're issuing this massive debt out there, saying, please, buy our debt. And all we can do is, there's been very few articles in the national papers about this, and one of the few times we've seen some of the articles, they're saying, well, we have to make it attractive enough to keep people wanting to buy it out there. Well, how far is that and when are we going to get to that? [[Page H1023]] My good German grandmother used to tell her grandkids this one saying, that he who goes a borrowing goes a sorrowing. And you know, we're at that point. And the real question is how are the future generations of this country, not just this generation but the next generation, and the one right after that, going to pay for this debt and how are they going to do that? Mr. AKIN. Reclaiming my time, that is the question, isn't it? How is this going to work? And I think that really there are two theories here in terms of the way you handle the problem that we're in with the economy. One is you spend money like mad, which is what FDR tried to do and turned a recession into a Great Depression, and the Japanese followed that same example, went down the same street for 10 years, had a great big depression over there because they had a bunch of these guys thinking you could, quote, stimulate the economy by spending money like mad that you don't have. But that raises the question in that we already have the amount of debt that you're talking about. We should have great economy if that theory worked, shouldn't we? Mr. LATTA. Absolutely. Mr. AKIN. I mean, we've got a tremendous amount of debt; therefore, we shouldn't have any economic troubles. And just as Henry Morgenthau found out, it doesn't work. And the approach that is being done by the Pelosi Congress and what is being asked for by our new President is based on this Keynesian model of economics which really doesn't work. I also promised my good friend, the gentleman from the congressional district in Ohio, Congressman Jordan, wanted to let you have--we've got about 5 minutes or so here. I wanted to let you have a chance to chip in on the whole conversation. You have been very helpful, and your thinking is highly respected, I know, in our caucus. Mr. JORDAN of Ohio. I appreciate the gentleman for putting this Special Order hour together. This must be the Ohio hour because I notice the last two presiding officers over the Chamber were Ohioans as well, and then of course my friend from just north of our district, Congressman Latta and his expertise in this. Think about the average family, what they saw from their government last week. I think it's an important place to start as we think about this discussion. The typical family, what did they see from their government? They saw the United States Senate confirm for Secretary of the Treasury a gentleman who didn't pay his taxes on time. Think about it, not just any Cabinet position but Secretary of the Treasury. Then they saw from the House of Representatives, the other side of Congress, they saw the House of Representatives pass a stimulus package that will not do anything to foster and promote economic growth. I mean, that's your government at work, America, certainly not where we need to be. Think about this stimulus package that we've been talking about and what it doesn't mean for promoting economic growth now and what it means, long-term implications for our kids and grandkids and the debt that it preserves. First thing is this, and my colleague, our colleague from Louisiana I think said it right. The American people get it. They have figured out that this, quote, stimulus package is not what our country needs at this particular time. They don't like the process that was used and, frankly, the lack of process, the lack of the fact that the Republicans weren't included, and they don't like the finished product, the finished product that has such things in it like $600 million for the government to buy a new fleet of automobiles. I'd much rather cut taxes so that families can use that tax money, their tax money, to purchase their own car versus giving more cars to the bureaucrats who work here in Washington. So they don't like the process. They don't like the product. And I think they also understand, which was being pointed out very well by our friend and colleague from Ohio, Congressman Latta, they understand that this spending spree that has grabbed Washington over the last several months is just wrong to do to future generations of Americans. It is wrong to saddle our kids and our grandkids with this kind of debt, the kind of debt that Congressman Latta was pointing out and I know Congressman Akin has pointed out earlier in the hour. Think about this. We're going to run a deficit this fiscal year approaching 10 percent of gross domestic product. Never in the history of this country have we run that kind of debt. You have to go back to World War II when we're fighting a world war to when it's close to 6 percent of GDP. This year it looks like it's going to be close to 10 percent of gross domestic product. They understand that's not the direction to go. They understand that what really fosters economic growth is reducing the tax burden on families, on taxpayers, on small business owners so they can keep more of their money, put it to work in the private sector, put it to work in their small business, creating jobs, protecting jobs, and promoting economic growth for the future. That's where we need to focus. Short-term, fast-acting tax relief versus big government spending. The American people understand tax relief is where we need to go. That's the alternative we've been supporting. That's the alternative we'll continue to support. And the good news is, that's what the Senate is beginning to look at. We did a press conference today with some of the Senate Republicans, and they are talking about focusing on some of the same tax cut provisions we tried to get in the bill over here on the House side. Mr. AKIN. Reclaiming my time for just a second here, what you're talking about is where I really wanted to get to with this conversation tonight. We're not just saying things won't work. Yes, what's being proposed, putting the government tremendously into debt, a lot Federal spending does not solve the problem, but there is a way to solve this problem. It's just going to require a little discipline, like some good wrestlers in the State of Ohio know, and I want to let you continue with that because we have a solution, a positive way, a bold approach to take care of this problem. We don't have to turn a recession into a great depression. But the solution that's being proposed always created depressions from recessions. We don't want to do that. We've got a way to solve the problem. I yield. Mr. JORDAN of Ohio. I appreciate the gentleman yielding. My colleague said earlier that if big Federal Government spending was going to get us out of this mess it would have happened a long time ago because we've certainly been doing that. And you're exactly right. The easiest thing in the world to do for politicians, for policy-makers, for Members of Congress is to spend money. It's the easy thing to do. The tough thing to do is the discipline thing to do. I had an old coach in high school and he talked about discipline every day in practice. And his definition was this. Discipline is doing what you don't want to do when you don't want to do it. It meant doing it his way when you'd rather do it your way, but it left an impression on me. And frankly, the disciplined thing to do is to say we're going to stop this excessive spending; we're going to reduce the tax burden here so that business owners and families can have more of their money and promote economic growth and do the things that we know work in an economy. That's what we have to focus on and have the discipline to say we're not going to continue to spend and spend and spend and mortgage our kids' and grandkids' future. Mr. AKIN. Reclaiming my time, I very much appreciate your perspective in getting to the positive solution. And I would yield to the gentleman. We've just got a minute or two, but if you'd like to join us, I yield. Mr. FORTENBERRY. I want to thank the gentleman for having this very important discussion tonight on the House floor. My fear is what we've done here in the name of stimulus is actually create an unrestrained, unsustainable spending bill. And since the year 2000 or so, it's very important to note that the Federal Government has actually grown by about 60 percent. We've been on an 8-year stimulus run in the name of spending, if you will, and yet we remain in economic straits at the moment. [[Page H1024]] I think this is very important to point out because the other problem here is the massive amounts of debt that we're going to compile if this bill should be passed. Debt that is unpaid for--the stimulus bill not being paid for--will be passed along to future generations, children and grandchildren, or it will be sold, the wealth asset value of this country sold overseas to foreign debt holders, or it will come out in other forms of taxation such as inflation. Mr. AKIN. Just reclaiming my time for a second, you're talking in kind of economic terms, but further, what does that mean to the average person in our district? It means a lower standard of living, doesn't it? It means you can't make ends meet. It means you're not going to buy the food you want to buy. And I yield again. Mr. FORTENBERRY. Inflation is a very regressive form of taxation, particularly among the most vulnerable among us. With that, let me say, I don't want to see any family experience unemployment, any business take a downturn or any family experience a foreclosure. And with that said, I think it's very, very important that we work very hard to get this right, a plan that makes sense, that maximizes economic productivity through any type of new governmental policies that we set, but a plan that is also potentially paid for over time and that does have some new bold ideas in it. One of the problems here as well, though, is that much of the spending is targeted to States, and some States like Nebraska, we've been very fortunate to be insulated from these larger downward economic trends. We have a strong ag economy that is hitting some bumps at the moment, but nonetheless, we also have a set of values, if you will, where people work hard and take responsibility for themselves and care for their neighbor. Businesses, as well as our citizens, have made prudential decisions about buying and lending, and we haven't suffered like the rest of the country in this regard. But with that said, this bill effectively asks Nebraskans to subsidize other States that may have been poorly governing and want the Federal Government basically to make the tough decisions for them, not force them to make the tough decisions. Mr. AKIN. Reclaiming my time, I think what you're saying in a polite, sort of sensitive way is California has been spending money at an incredible pace, and the question is, should Nebraska have to subsidize California? And that's really what we're talking about, isn't it? I yield back to the gentleman from Nebraska. Mr. FORTENBERRY. I thank the gentleman for the time. I think we are. It's a very important point to be made that a lot of communities in a lot of places have had to make choices with limited budgets to set priorities and have not rushed up to Washington to say bail us out, help us out. They have made those tough choices responsibly, and it's places like those, like Nebraska and other places, that I fear are subsidizing other places that have not performed admirably in terms of governance. Another point here is I think there are some bold, new, innovative ideas in this overall package. I think they could be potentially considered as stand-alone measures. President Obama has a strong focus on, for instance, alternative energy development for a sustainable energy future. {time} 1830 This economic crisis was precipitated by, you recall, a very high spike in energy costs which accelerated other difficulties in the economy. But we've almost forgotten that now. Can you imagine where we would be if gas were $4 a gallon right now? So we've dodged a bullet right there. But trying to get underneath the question as to what our real economic vulnerabilities are, including our overdependence on foreign oil and fossil fuel in general, is an important policy consideration. So there are some admirable components here that might ought to be considered as a part of a reasoned stimulus plan that has a payment schedule for it, or stand alone separately. So we don't want to stand here and simply oppose everything in that regard. But we are halfway. Mr. AKIN. Reclaiming my time. I think we've got just a very short amount of time left. But your point is so good. Our objective is not just to say what won't work but to say what won't work because we know it won't work, and instead, let's adopt something that's helping those families. I was talking about it earlier, the picture that just keeps jumping in my mind--and this is happening all over the world because of our lack of bold and decisive and disciplined action here--the picture that comes to my mind is the house with the foreclosure and the easy chair and the sofa sitting on the sidewalk. And I'm thinking about the mom or the dad of that family and the pressure that they feel where they're just dumped right out of their house. This is not just economic numbers, this is the people of our country. I yield my last 30 seconds. Mr. FORTENBERRY. Well, again, I'm grateful. We don't, again, want to see any family suffer any unemployment or suffer any situation like that. But I think this letter that I got today from a constituent back home from Gail in Fremont says quite a bit. She said, ``I'm writing to let you know I oppose the stimulus, Congressman. I'm opposed,'' she adds, ``to the overwhelming debt the government is all too willing to place on us with no long-range plan for getting us back on stable ground.'' She goes on, ``What is the Federal Government doing without during this emergency?'' She says, ``In my home when there's no money, we do without. We don't spend money we don't have. I'd rather tighten my belt for a time than to live the rest of my life under the burden of increased taxes for this bloated stimulus package.'' Unrestrained, unsustainable spending is the issue here, and we need to maximize economic productivity through smart thinking about what really is stimulus. Mr. AKIN. Reclaiming my time. Thank you, Madam Speaker. ____________________