Bailouts are the Problem

Big-government policies are at the root of the AIG bonus controversy, explains Heritage Foundation expert Brian Darling. "Conservatives are outraged by the bonuses, but know that bonuses aren't the problem—the bailouts are."

Darling blames the bailouts, which were first implemented under President Bush, for increasing government's belief that it is entitled to own and direct much of the economy. For instance, the federal government now owns 80 percent of AIG's stock. What's more, the bailouts have been used to further encroach on private sector prerogatives.

Unfortunately, it doesn't look like the intrusion of government into the private sector will end with the bailouts. The budget contains massive new taxes and spending that would further expand the size and scope of the federal government.

Ironically, many of President Obama's budget policies resemble President Bush's, except that they'll cost taxpayers even more. "President Obama's only real divergence [from his predecessor] is his proposal to raise taxes steeply," argues Heritage budget expert Brian Riedl. "Yet all these tax increases would go toward expanding government. None would reduce budget deficits even back to President Bush's levels."

Riedl highlights just a few of the new President's costly and expansive budget objectives:

$1 trillion — the expansion of government under the President's budget proposal, a figure which does not include spending on the "stimulus";

$646 billion — the cost to consumers of the cap-and-tax energy plan, which could cost each household from $650 to $2,000 annually;

$634 billion — the size of the new healthcare reserve fund; and

$8,000 — the increase in Washington's annual spending per household, which will rise from $24,000 to $32,000.

And how do we pay for it all? "Anyone who believes all these costs can be paid by the wealthiest 2 percent of taxpayers is dreaming," Riedl says. "We'll all be paying this tab for decades."
Yet the Left continues to prescribe more government — and more bailouts — for the nation's economic woes. If these pricey policies are enacted, the American people can expect little change, in any sense of the word, from the Obama administration. —Amanda Reinecker, Heritage.org