Massive Increase in Debt-Fueled Spending a Looming Disaster

Washington, D.C. —Today the U.S. Senate voted 61-37 to approve the controversial $838 billion economic stimulus bill, roughly matching the plan recently approved by the House of Representatives. Despite approval by Congress, the Competitive Enterprise Institute reiterates its opposition to this wasteful, reckless and dangerous binge of deficit spending.

“Taken together with the $1 trillion second round of the bank bailout, the Senate has decided to increase our already disastrous national debt of $10 trillion by a further twenty percent,” said Competitive Enterprise Institute Senior Fellow Iain Murray. “It is ludicrous to think that the solution to a debt crisis is further borrowing.”

The Senate bill will now move to a conference committee, where differences with the House plan will be reconciled before being sent to the White House for approval. Both bills, however, contain billions of dollars not just in bailouts for failed businesses and financial institutions, but billions more for countless pork-barrel projects.

“This pork package has been sold to the public as one that will get unemployed Americans back to work by funding public works projects,” said Murray. “In fact, only 7% of the Senate package is about infrastructure. The rest is merely pay-offs and rewards to special interest groups. The public has been sold a pig in a poke.”

This unprecedented level of government spending in the stimulus plan will likely discourage savings and investment and kill private sector jobs while substantially postponing any hope of a quick economic recovery by spending borrowed money on inefficient and wasteful programs.

“The actual bold political action, genuine leadership, needed in today’s crisis is pretty much the opposite of what’s going on,” said CEI Vice President for Policy Wayne Crews. “Indeed, it seems the political price is too high for election-bound lawmakers or career politicians to entertain non-governmental solutions to recession recovery.”