Reality of the Economy

Floor Speech

Date: Oct. 20, 2021
Location: Washington, DC


Mr. SCHWEIKERT. Madam Speaker, I promise I am not trying to go for the record of the most boring for half an hour, but if I make it, bless us all.

Madam Speaker, over the next half hour, I am going to try to walk through--and a lot of this is just sort of the boiling frustration that we all go through around here. We are frustrated because I believe a lot of our brothers and sisters on the left mean well. They say warm, fuzzy things. They say things that actually should make you feel good. And then you actually deal with the reality of what is happening in our economy and around us.

We are going to blast through a bunch of these and see if I can sort of explain our frustration as conservatives but also as Americans. So just one quick point. Do you remember all of the rhetoric from the last election from our Democrat colleagues about how they are going to actually do all of these things in regard to greenhouse gases, but we will still have a healthy economy? Well, this is the chart before President Biden took office, and you see GDP was truly growing and greenhouse gases had actually made quite a bend and change.

But now, we actually also have some other little facts we are going to have to deal with. Think about this: The attacks that happened on President Trump, but in those 4 years, my understanding is use of coal actually fell 30 percent.

Well, I have to congratulate the Democrats. It looks like this year's coal usage will go up 23 percent. One more time: Coal usage will now go up almost 23 percent this year because they have so screwed up the energy economy.

When you block pipelines, when you block the movement of natural gas, when you block the much cleaner fuel and you need to produce ions, called electricity, where do you go? So, congratulations to the Democrats. They actually took a trend--where they said they wanted this--and have absolutely reversed it.

It is sort of an amazing thought, isn't it, that the Biden administration and Democrats did more in the last 9 months for coal production than the previous President did in 4 years? It is a fascinating but good example when you don't own a calculator and don't do economics.

Let's actually walk through a couple of other things. You have also seen the reports and the analysis of how many poor people are going to absolutely suffer this winter. Have you seen what energy prices look like? If your household that uses heating oil--I am sorry, for those of us in the desert, we don't know what heating oil is, but we are told it is getting really expensive. Have you seen the numbers of what is predicted to be paid in cold parts of this country?

If you are angry about it, go talk to your Democrat Representative because they are the ones that basically, through their arrogance and not owning a calculator, not understanding basic economics, have just, in many areas of the country, will have doubled, doubled your heating bill this winter.

But this is what crappy economics looks like. And you start to walk through it. How about if you are in one of those neighborhoods where crime is an issue? Well, you have to thank the Democrats once again. You can see that homicides are up 16 percent in the first 6 months of this year.

We chose not to use it, but if you actually look at the concentration of where these homicides are, people of color are the victims here.

You know, once again, we hear these beautiful speeches behind these microphones of how they are going to help and protect and do this, except they are killing them. At some point, the math is the math. This is sort of the Democrat destruction in just the first 9 months, 10 months of this year. And the math is the math. The facts are the facts.

The air is getting dirtier; the power bills have gone up; you are less safe. But let's keep walking through more of the damage that is being done to our country, the society.

In my State, we have a little problem. We are a border State. The number of adult males that are crossing our border has skyrocketed. If you actually start to walk through what that actually means--let's actually take a look.

Oh, but what about the fentanyl and who is that killing? When you take a look at the pounds--tonnage, actually--of dangerous narcotics, particularly fentanyl, that is crossing my border in Arizona, thank you for the absurd policies that have been adopted by the Democrats and this President.

Is it that you want to kill people? I can't believe that is in your hearts, but that is what you have allowed to happen.

Let's actually talk about the other side, the economic side, of what the Democrats have done in regards to the border. Why some of this is important is I need you to double it up. We are going to come back to the inflation here in a second.

What are the two things you do in a society if you want to destroy the working poor? You make the value of their labor less. And unlike 2018 and 2019, which we had records in this country, where if you are part of the working poor, you are someone that didn't finish high school and what you sell is your labor, you were getting dramatically less poor. We know income and equality, wages, were all going the right direction.

Now, the Democrats take over, and you flood the society with--what was today's final number, 1.7 million, heading towards 2 million-- people of moderate to low skill, and do you understand the economic effects of what you just did to the working poor in this country?

We have some data that we did a couple weeks ago on the floor that showed that by the end of the decade, you will have made the working poor poorer in this country, substantially, because of opening the border. Now, add in inflation.

If you actually take a look at the real earnings, the real earnings, they are negative. People in this country, the working poor, the middle class, they are getting poorer. Do we care? Because it is the math.

It is nice to give these beautiful speeches about how we care, but then when you so screw up the basic economics of society, when you have now devalued their labor by flooding the market with similar skill sets, and now you have so monetized the society that you have cash chasing products and goods, and then you screw up the incentives to work, what did you think was going to happen?

You wonder where is the compassion around here? The working class, that middle class, and the working poor are getting poorer every day in this country because of Democrat policies.

It is a level of cruelty. Can we stop the hemorrhaging? Can we stop the cruelty to these populations? It is not enough to give pretty speeches that you care.

When you start to look at this, when you realize the skyrocketing inflation--yeah, it is the highest in 13 years. But if you do some of the core goods, that if you are on that--I hate the term--lower quartile, where substantial portions of your income go to transportation, food, and rent, it is even higher than this.

Now, we understand from the economists, it is no longer considered transitory. This is Democrat policies at work.

A couple weeks ago we tried to do a simple explanation of supply side, where you use resources, whether they be tax cuts or incentives or getting regulations right to encourage production, and by encouraging production, you make people's labor more valuable and they get paid more. But the society has more goods and products and services to buy, so you don't set off inflation.

You are now living the Democrat stimulus Keynesian model of throw lots and lots and lots of cash at it, but you did nothing to stimulate production. We have lots of cash chasing goods now, but at the same time, all of that cash also encourages people, saying: Hey, maybe I don't really have to work right now.

So you have a fall in labor force participation, you have lots of cash to go buy things, and then you wonder how the supply chains get screwed up. You wonder how you have inflation set off.

We are reliving the 1970s. Did anyone actually buy a textbook? Seriously. If you actually loved and cared for the working class, for the working poor, you would have been embracing 2018 and 2019, which were miracles of no inflation and dramatic wage growth.

Yes, the pandemic has been miserable, but much of this did not have to happen. But it is that arrogance, once again, of Democrat policies. And is it the darkness of, hey, if we send out lots and lots of money in checks, if we are--as the Democrats so-called Build Back Better plan, which is to take the majority of our society and put them on transfer payments--maybe it is great politics. Maybe that is how you become the majority party forever. It is really crappy economics.

So if you start to take a look at just the last 6 months--you remember a couple months ago: This is transitory; it is going to stop? Not stopping, not stopping. Even the Federal Reserve now has updated their numbers. So the talking heads were saying, oh, it is transitory, give the administration a pass. Turns out, we have so structurally screwed up the labor markets, we have so structurally failed to provide the incentives to produce things in our own country and massive amounts of this liquidity are functionally now financing the rest of the world and particularly China. So congratulations once again.

If you actually start to look--and we are going to put up all of these slides on our website so folks can actually have a chance to sort of dive into them--but how prices have changed in a year. When you start to understand--that is gasoline. This is your fuel oil, as we were just talking about; cars. But you start to go over the things that are sort of the bare necessities for so much of our community. We are just kicking them in the head.

Then the arrogance coming out of the White House saying, well, these are sort of, what was it, high-class problems? Come on. Is that really where the heads of the left are? Their excuse is, well--because the basic economics are, if you are a person with assets, you have a house, you have retirement accounts, you own gold, you own other things, you are getting richer. Now, your purchasing power is eroding. But if you don't hold assets or you are a saver, someone trying to save for retirement, these policies are just destroying your economic future.

So let's continue down the line of misery that the Democrats have brought us. If you actually take a look at where we were going after the Tax Cut and Jobs Act and you started to realize what had happened in wages, particularly for female participation, we had the highest female labor force participation in U.S. history. It was off the charts, and their wages had begun to skyrocket.

Do we see anything in the Democrat proposals that will ever bring us back to that? Actually, no. It is actually just the opposite. The University of Chicago study now makes it look like they will incentivize those numbers to continue to go the other direction.

Let's actually take a look--and we started to touch on this. If you are part of that working poor, and you start to understand that what happens on--if you start to break out the world by education level--and I know sometimes this is uncomfortable, because you sort of segment your society. But the reality of it is we actually saw amazing wage growth, just amazing wage growth in 2018, 2019--21-plus percent. And that is the very population that the pandemic smashed into a wall. Now the Democrat policies of inflation, opening up the borders, incentivizing people functionally not to participate in the labor market, they are going to destroy--as a matter of fact, they have already begun to destroy.

Let's look also at the brilliance of the left's proposals of functionally: Let's throw lots and lots and lots of cash at the problem and then try to figure out why that cash functionally is on its way to China to buy things. It was not designed to create a robust manufacturing backbone in this country. You actually incentivize people, saying, well, go out and buy lots of things, engage in consumer--oh, by the way, we did nothing in those policies to have that become the new backbone of productivity and opportunity and jobs in our own country.

The simple proof of this is--have you seen the pictures of the container ships lined up at the port of Long Beach? What do you think is in those? I mean, we are living it; we are looking at it. Yet the talking heads are incapable of trying something new around here, and that would be tell the truth.

So let's do something that is even a little more uncomfortable to talk about. Remember when Vice President Biden was running for President, and repeatedly we were told how if we just had a Democrat Presidency and Democrat unified government, we would see the deaths-- and the deaths are miserable and horrible. I have had a couple friends die of COVID--but they would come to an end and the world would be better.

So we have a new President. He is handed multiple vaccines. But how is it possible? How is it possible to have vaccines available to this administration, functionally financed and brought in policy-wise by the previous administration, and then there are more deaths this year than there were last year? Are the Democrats ready to stand up and say: We lied. We made crap up. And the results of not telling the truth and the way they have approached the American people about the vaccines? Are they going to take responsibility for the deaths? Because they sure beat the crap out of Republicans and the last President over this. Should they live by their own words?

Let's talk about the Democrats' tax policy now. We need to tax the rich, right? We have done multiple presentations here on the floor saying maybe we should stop subsidizing the rich. We showed a couple months ago $1.4 trillion over the next 10 years of subsidies that go to the rich. In this case, Democrats actually have something brilliant, saying--this is a great scam--we are going to tax the wealthy, but wink, wink, nod, nod, we are going to actually hand it back to the wealthy in tax credits and subsidies.

Here is a simple example of a family that makes $800,000 a year. The Democrats' tax bill, tax proposal, will hand them $118,000 in tax credits, if you just buy the right electric vehicle and the right solar panels and these things.

This is absurd. You are taking the wealthy in society, you are actually blaming them for not paying their fair share, even though you already saw--I am sure if anyone is literate around here, you saw today's Wall Street Journal talk about you are not actually even getting to the super rich; you are actually attacking the high-income earning rich, because we tax income; we don't tax wealth. But in this case, we are going to build a tax bill saying we are going to raise your taxes, but wink, wink, nod, nod, we are going to hand it back to you in tax credits, as long as you buy what the Democrats tell you to buy.

Yet, if you actually look at what the design of the Democrats' tax plan is, you must understand by the end of the decade, we are all poorer. The society is poorer. The working poor are poorer. The middle class is poorer.

We now have multiple studies--and we are going to talk about these on a number of the slides--where the size of the economy actually shrinks. The number of people working actually shrinks. If you understand our debt problem, if we do not have an incredibly robust economic expansion, we are in real trouble. Yet, this is sort of the dystopian future the Democrats are planning for my 6-year-old daughter and for every American.

You understand, when you add in the spending proposals, in less than 10 years, we are going to be running $2.6 trillion of borrowing every single year. So think of that. Nine years from now when we are working on the budget, just the borrowing package--so in 9 years, the borrowing package, just to finance the spending of baseline government, the entitlements, and the expansion of entitlements, we will be borrowing $2.6-plus trillion every single year. This is the healthy economy we were promised?

So, understand what that means is, in less than 9 years, if the Democrats get their way, we are at 129 percent of debt to GDP, and that is publicly held debt.

Now, you all understand why that number is so incredibly important. When you strip capital out of society, how does the small business get a loan? How does the entrepreneur here get a loan? How about the person who just has a dream and wants to start a business in their garage? They have to compete with government.

Is there this bizarre fantasy that somehow we are going to monetize it? Maybe the fantasy of modern monetary theory, which, as you understand, has been tried many, many, many, many times over history, and it has always ended up very badly.

Do you remember the inflation numbers a few boards ago? Welcome to the dystopian future that the left is bringing us. Look, the baseline number was already crappy. It was over 106 percent of GDP. With the Democrats' additional proposal, it goes from about 106 to 129 percent. This is a miserable future for this country, and this is being brought to you by Joe Biden and our beloved Democrat friends.

I know they mean well; at least, I like to believe they do. But they have to see these same numbers. Most of these are based on CBO projections. You start to see other things happening in society because of Democrat policies that really, really are starting to take effect right now. We are seeing some numbers that we need to understand between now and the end of the year. There are some economic numbers from us on the Joint Economic Committee that are becoming incredibly uncomfortable.

This is sort of an odd one that popped up the other day. It turns out, we are having this sudden huge spike of individuals dropping out of the labor force. But what happens when you have a substantial spike of folks who are just saying, ``I am going to retire''?

One of the miracles of 2018, 2019 is we saw our brothers and sisters coming back into the labor force because wages were going up, and there were so many opportunities. How can there be a world right now where we say we have over 10 million open jobs, yet we are seeing huge dropouts of the labor market?

This is a chart that basically says we had, what is it, 1\1/2\ million-plus older Americans decide, ``I am going to take early retirement.'' What is so dark about this number is a huge, huge, huge portion of those have almost no savings.

They are taking early retirement, going to live on Social Security instead of what we were seeing in 2018, 2019 as the economy grew. We were actually seeing poverty of seniors falling because many of them had taken part-time or had taken some work. Now the reverse trend has happened.

What has happened in the psyche of Americans, of our brothers and sisters out there? We are already seeing millions of Americans of traditional working age disappearing from the labor pool, so they are not counted in unemployment because they are not looking. But they are in that baseline number we call labor force participation. I know this is geeky, but it is really important.

You cannot have a growing, healthy, prosperous society if you build so many disincentives in your public policy that not working or dropping out or retiring early is where your head is at.

According to the University of Chicago, the Democrats' plan to expand the child tax credit would cause a million and a half workers to exit the labor force. On the conservative side, we have actually made multiple proposals of how to do some creative things with the earned income tax credit so you actually help the working poor and you make working more valuable, more attractive.

But the Democrats' proposal is now to delink a monthly check from participating in society, participating in the economy, building skill sets, building an economic future for yourself, your retirement, for your children.

And now we actually start to see the academic studies coming in that we are going to lose a million and a half workers just on this one line item.

It truly is almost dystopian that the left can get behind the microphones, say these warm, fuzzy things, but the economists are sitting there shaking in their boots, saying we tried versions of this in the 1970s, and it did not work well. And now we are doing it in a time where our demographics are a real headwind and our debt load is crushing.

We actually have some proof that also demonstrates that the President and the Democrats said a lot of things that just weren't true because the data now is in on the States that ended the early, we will call it the SPIF on unemployment. It turns out they represent a small portion of this country's population because I think there was only, what, 13 States that did it, and there are like 20, 23, whatever they are, a small percentage of the Nation's population, but they are over half the job growth.

The data is absolutely clear. The States that actually ended the unemployment SPIF, the enhanced unemployment, had dramatically better economic growth, job growth.

Once again, is having a job, is economic prosperity, is economic growth moral? Because if it is, then what the Democrats are doing is absolutely immoral.

You start to see the Byzantine structure of all the tax hikes that the left is proposing, and we may do some of this next week. What is so crushing about this is to even get close to their spending requirements, it doesn't produce enough revenues.

I keep getting asked over and over, and saying okay, the Democrats aren't dumb. There are probably a few of them that actually do own calculators. They have to understand that their spending proposal in this environment will be incredibly destructive to opportunity in society.

We have lots of charts. You need to go through these other studies that basically show the transfer payment model the Democrats are pushing ends social mobility in this country. If you are poor, you are going to stay poor. If you are middle class, you stay middle class.

In this country, do you really think our societal social fabric is going to hold when you have no opportunity to move upward and sometimes even downward, that we are going to basically become a European transfer payment, socialist society; that the class you are born into is where you stay, no matter how hard you work, the schooling you go to, because that stagnation is what every study says?

The other part that is also perverse is the Democrats have to also understand the receipts, revenues, that would be produced by all these taxes don't come close to covering all their spending.

It is obvious. They are setting up our country to actually have to do other layers of taxes. Are they going to sweep retirement accounts? Well, that is where a bunch of the cash is. Are we basically going to move to a VAT, a value-added tax, so each step of production we tax? Are you going to have to add some sort of tariff or border tax? Because right now, none of this works. None of the math works.

The final slide here is a congratulations to President Biden and the Democrats' policies because they did something none of us thought was possible. Remember when we started this year in January, this was going to be one of the most robust economic growth years in history? There were discussions that we were going to be 6-plus percent GDP growth.

As of yesterday, GDP growth from the Atlanta Fed calculator is 0.5. One-half of one percent is our economic GDP projection for this quarter, proving at some point policies really do matter, the people you elect really do matter, and the amount of pain this is going to cause to so many people because the opportunity, the growth in their wages has now been crushed by these policies.

Madam Speaker, I yield back the balance of my time.