Idaho Examiner - Sen. Larry Craig News Releases

Monday, December 05, 2005

America Works

by Senator Larry Craig

America is built on the private sector and the ingenuity and drive it nurtures. It is this that has made America the beacon of freedom, hope, and opportunity it is today. American capitalism is succeeding once again.

This past week brought a flurry of positive economic news. While news of layoffs and closure dot the landscape, overall our economy is healthy. Over 4.4 million jobs have been created in the U.S. since May 2003, with 215,000 new jobs in November alone. Our unemployment hovers around 5%. This is at a time when Germany, Europe’s largest economy, is celebrating a 10-month low of 11% unemployment.

According to economist Richard DeKaser, America’s labor market has more jobs than workers, on average, which is pushing wages higher. These jobs and wage gains are translating to more money for the average American. Incomes were up .4 percent in October and consumer spending increased 4.2 percent during the third quarter of this year. Business investment outlays rose 8.8 percent – signaling a stronger economy in the future. Amongst all of this news, Alan Greenspan emphasized that the economy, “has delivered a solid performance thus far in 2005” and “economic activity appears to be expanding at a reasonably good pace as we head into 2006.”

While the government does not create jobs, the policies it embraces can stifle or foster economic growth. Thankfully, this Administration and Congress have embraced policies that promote investment, free markets, ownership, individual responsibility and ingenuity, and freedom. Most important are the tax cuts that keep money out of government coffers and in the hands of individuals to spend and invest how they see fit. We have also recently enacted legislation that will help in the future, including an energy bill, pension reform, and bankruptcy reform.

Of course, we can’t sit idly by. Congress must be vigilant in ensuring that sound policies are enacted, the most pressing of which is limiting federal spending. We have to make hard choices, including restrictions on entitlement spending. Again, we turn to Greenspan, who just yesterday called for Congress to take steps to control entitlement spending, healthcare in particular, following his remarks on this week’s economic news. He stated that healthcare costs, “will exert budget pressures that seem increasingly likely to make current fiscal policy unsustainable.” We need to rein in these costs.

Fiscal responsibility embraces the simple concept that less is more. Less government spending means more freedom for individual Americans and increased levels of economic activity and rates of economic growth for the country. Studies by the Public Finance Review, the Journal of Monetary Economics, and the International Monetary Fund have all come to the same conclusion – smaller governments equal better economies. After all, every dollar the government spends is one taken from an American and is one less dollar in the productive, private sector economy.

Americans are rightly concerned that our fiscal policy is sliding towards recklessness. Not too long ago, Republicans stood up, made the case for smaller government, and made it happen. The record budget surpluses from 1998 to 2001 reflect that. The time for action is upon us once again. Congress must act to extend the Bush tax cuts, limit spending, and implement a fundamental, permanent policy of fiscal restraint such as a Balanced Budget Amendment the Constitution like the one I re-introduced earlier this year.

It’s policies like these that have led America to have the strongest economy in the world, an economy every American can participate in.

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