Categorized | News


Do you remember the wonderful video ad in the GOP primary for Governor of California – the Demon Sheep ad?  Carly Fiorina attacked Tom Campbell as a FCINO (Fiscal Conservative in Name Only) but her ad was greeted with derision as too clever and somewhat weird?  I did not believe it at the time.  I admire Tom Campbell as something of a libertarian voice in GOP politics.  But this latest article in the LA Times shows that maybe the wolf has finally shown his true colors!

First, for the recovery to succeed, the private sector (not the public sector) needs to hire more people. And second, the private sector can be incentivized to do so with government spending.  *  *  *  The federal government could agree to provide for 50% of a new employee’s salary if an employer adds a job and gives it to someone who’s been out of work six months or more. With more than 6 million people who’ve been unemployed that long, businesses would have a large hiring pool.

Campbell wants to use the FED to do it without new taxes!

Where would we get the $175 billion? The Federal Reserve could provide the funds, with no serious risk of inflation and without any increase in the debt ceiling. In 2009, private banks sold the Fed large numbers of mortgage-backed securities that had been clogging up their balance sheets. Since then, the Fed has been selling those securities, often at a profit. In similar fashion, the companies that hire people under this program would sell the Fed corporate bonds or restricted stock, as the company prefers. The bonds could be created so as not to be payable, and the stock not convertible into common stock, until the company has increased its profits substantially and could easily repay the sums.

This 2009 debt may be the exact part of the debt that Cong. Paul wants to write off!  Campbell wants to increase it.  In fairness, there iks some sort of stock collateral requirement to eventually repay the  money but the government is left holding the debt bag.

Campbell is alas probably right that the Fed could do it on its own but Congress should help:

This would be a bold step for the Fed to take alone, though it could do so. It would be far better for Congress to pass legislation encouraging the Fed to take these steps.

Is there any chance Congress would take such action? Possibly. It would not require any congressional expenditure. It would not take a tax increase. It would not require borrowing by the Treasury.

Why not a simple payroll tax cut or holiday for newly hired employees?  If you are going to use tax money to stimulate the economy, do it directly, not through “shovel-ready” projects or government waste!  But I have to ask the question:  Tom Campbell, Fiscal Conservative, where are thou?  This proposal certainly sounds like a Fiscal Conservative in Name Only idea to me.


About Elwood Sanders

Elwood "Sandy" Sanders is a Hanover attorney who is an Appellate Procedure Consultant for Lantagne Legal Printing and has written ten scholarly legal articles. Sandy was also Virginia's first Appellate Defender and also helped bring curling in VA! (None of these titles imply any endorsement of Sanders’ views)

Leave a Reply

Your email address will not be published. Required fields are marked *

CommentLuv badge

Tom White Says:

Nothing is more conservative than a republican wanting to get their majority back. And nothing is more liberal than a republican WITH a majority.

Sign up for Virginia Right Once Daily Email Digest

No Spam - ever! We send a daily email with the posts of the previous day. Unsubscribe at any time.
* = required field

Follow Us Anywhere!