February 14-15 - Shame on Specter! Play Now | Play in Popup | Download

On this week’s show, I talk about the economy and the $787 billion federal spending bill. The good news is, well before this “stimulus” plan takes effect, there are signs that the recession may be bottoming out. The number of housing foreclosures dropped 10% in January over the previous month, and retail sales grew for the first time in 6 months (1%). Jobless claims were also down slightly this week (8,000 less than last week). The bad news is that the stock market dropped another 5% after the Senate passed the spending bill and Treasury Secretary Geithner announced an additional $2.5 trillion may be spent on failing U.S. banks.

To provide some additional insights on the anti-growth policies imbedded in the spending bill, I interview Brian Wesbury, chief economist at First Trust Advisers L.P. and author of a recent article, “Unemployment and Stimulus.” Brian argues that every dollar spent by the U.S. Government must first be either taxed or borrowed from the private sector, and there is no way that the government will spend the money as efficiently with as much economic benefit as those who actually earned it.  Brian’s research indicates that as government spending as a percentage of the whole economy rises, that core unemployment also rises. Analysis and forecasts by the non-partisan Congressional Budget Office agree with this finding. Brian also believes that the massive amounts of liquidity pumped into the U.S. banking system over the past six months by the Federal Reserve (monetary not fiscal policy) will restore economic growth by the end of the year. Unfortunately, similar to the 1970s, we could dip into a second major recession once President Obama’s massive new spending bill takes effect and our taxes are raised to pay for it.

I also interview Pat Toomey, former PA Congressman and President of the national Club for Growth. Pat and I speak out against Senator Arlen Specter’s role in making the spending bill a reality. Both Pat and I are ommitted to backing a viable candidate to defeat Specter in the Republican primary in the spring of 2010. Pat also confirms that he is considering a run for Governor. According to Pat, we need to reform Pennsylvania’s current anti-business, anti-growth tax structure.  Pat also supports pension reform, and eliminating tax and spend policies that have led to huge deficits in the state budget. I say run Pat run!

Finally, I respond to some of your emails and comment on the Obama administration’s policies concerning “torture” and warrantless wiretaps. The bottom line is that while George W. Bush was in office, Democratic Party leaders and pundits screamed constantly that President Bush’s administration was breaking the law. Now that President Obama is in office, the President can legally do whatever is necessary to protect the American people (the “Jack Bower” exception is evidently alive and well in the White House). While I am greatly relieved to know that President Obama and his administration are serious about protecting us from international terrorists and other threats, I find the uncivil and highly partisan approach that the Democratic Party’s leaders took to these very challenging issues over the past eight years to be difficult to digest.