The WSJ reports in “General Electric Pursues Pot of Government Stimulus Gold” that General Electric (GE) hopes to earn about $192B in sales from government-funded economic stimulus programs in the U.S. and foreign nations. The article goes on to describe GE’s various lobbying efforts, CEO Jeffrey Immelt’s ardent support for the U.S. stimulus bill (the American Recovery and Reinvestment Act), and initiatives to tap into U.S. government programs. Of course, it is no surprise that a major industrial company like GE has an on-going interest in snagging government contracts and projects. What caught my eye was the following quote from Immelt apparently expressing just how enthusiastic he is about helping the government spend taxpayer money:
“Chief Executive Jeffrey Immelt now has his eye on a huge new pool of potential revenue: Uncle Sam’s stimulus dollars. Mr. Immelt, a registered Republican, quips about the shift in thinking in the nation’s corner offices: ‘We’re all Democrats now.'”
This quote will serve as an all-time classic for me. It is iconic of a decade in which government’s size, spending, debt, and deficits grew by leaps and bounds. Figuratively, we have all become big spenders now.
In case I had any doubt that the natural course of modern U.S. government is to spend, borrow, and spend some more, I need look no further than the commentary of some Republican lawmakers when faced with spending allocated stimulus funds.
The Atlanta Journal-Constitution ran an article last month titled “GOP won’t turn down stimulus spending: Georgia lawmakers opposed to plan say it’s their duty to look out for districts.” To be fair, I do not think it is realistic to expect any politician to leave government money unspent just because s/he opposed the allocation of those funds. It is not practical nor pragmatic given that, theoretically, the taxpayers in his/her district helped foot the bill. These same taxpayers will expect the same returns as any other constituency. And if they are unaware of the available funds, you can bet politicians opposed to the incumbent will make a huge issue out of it. Few politicians can get elected bragging about all the money they sent back for someone else to spend (of course, a whole different story if it means lower taxes – but that is not likely the case with stimulus spending). The statements from three Georgia Republican lawmakers (quoted in the AJC article) are quite telling and illustrative:
Representative Phil Gingrey: “If the Democrats are hellbent on spending an astronomical sum of money…it is my job as a member of Congress to see that the communities I represent receive consideration for the federal funds that the Democrats are spending, whether I agreed with its allocation or not.”
Senator Saxby Chambliss: [I] did not support the stimulus bill because there was very little in that legislation that would actually help grow the economy. However, that bill is now the law, and it is [my] duty as a senator to help constituents and businesses from Georgia in their interaction with the federal government.”
Senator Johnny Isaskon: “…one of the most important parts of my job as senator is to assist individuals, businesses and local governments in their dealings with the federal government…Any time one of my constituents has business with the federal government, I try to be as helpful as possible by supporting worthy projects.”
Is it any wonder that we are all big spenders now?
Click here for a chart showing U.S. federal debt as a percentage of GDP (you can easily download data as well). This percentage has risen nearly non-stop since 1980 and stands around 90% today.
Click here for my review of I.O.U.S.A, a movie released last summer that attempts to raise awareness about America’s problems with debt and deficits along with some great historical perspectives. You can now watch the condensed 30-minute version on YouTube.
Be careful out there!
Full disclosure: long GE