U.S. Sen. Rand Paul

"Sen. Rand Paul Delivers Response to President's State of the Union Address" +
 9:33 video from Jan. 28, 2014

Sen. Rand Paul: Good evening.  President Reagan said "in the present crisis government is not the solution to our problems, government is the problem.  The crisis that existed when Reagan took office was very similar to the one we face today.  Large numbers of people unemployed and even more dropping out of the workforce, a stagnant economy, a growing federal government.

We solved these problems then by coming together, and by implementing the right ideas.  We can do it again, but we must look beyond the current debate in Washington.

Let me say from the outset, I'll work with the President, Democrats, Independents and anyone else who wants to get people back to work and alleviate poverty in our country.

That said, we must first understand what caused the mass unemployment and the poverty of the great recession.  The housing bubble and subsequent crash were caused by the Federal Reserve keeping interest rates too low for too long.  Too much government money was given out to too many borrowers who could not afford the payments.  Banks were encouraged by government to lend money on houses with no money down.  The demand for houses went up and so did their prices.  But it was unsustainable.  Millions of people lost their jobs.  If we don't understand the cause of joblessness, we'll have trouble fixing it.

As we entered into the great recession, Republicans and Democrats misdiagnosed the problem as too little government so they gave us more government in the form of bank bailouts and a government stimulus plan.  Nearly a trillion dollars later though, we find that government doesn't create jobs very well.  It turned out that it cost nearly $400,000 per job created.  Why?  Because government is inherently bad at picking winners and losers.

In the marketplace, most small businesses fail.  If government is to send money to certain people to create businesses, they will more often than not pick the wrong people and no jobs will be created.  Think of the half a billion dollars President Obama gave to Solyndra to build solar panels.  It turns out people didn't want to buy these solar panels and the taxpayers lost that money.  Think of the billions spent on the war on poverty over many decades. 

Government spending doesn't work; it doesn't create jobs.  Only the democracy of the marketplace can find those capable of creating jobs.  It's not that government's inherently stupid — although it's a debatable point —it's that government doens't get the same signals.  Milton Friedman recognized that when he wrote, "Nobody spends somebody else's money as wisely as they spend their own."  When it's your money, it's spent with a concern no government bureaucrat could ever duplicate. 

Every day though, someone through hard work does rise up out of poverty.  Star Parker was one who escaped poverty, drugs and a hellish life.  She described her story in Today's Christian Woman.  She was 23 when she quit her job at the L.A. Times so she could go on welfare.  By collecting $465 a month plus food stamps and by getting a part time job that paid cash under the table, she could rent a nice apartment and earn far more money than working an honest 40-hour week.  Later she said she had no trouble dropping her daughter off at a government-funded day care center, selling some free medical vouchers to buy drugs and hanging out at the beach all afternoon. 

Quitting welfare was a big hurdle for her because she'd become so dependent on government and had lost a sense of who she was.  So she wrote a letter the next day and told the county not to send her any more checks.  "I was trusting God," she said, and within three months she got a good job at a food distribution company.  Star Parker went on to become an nationally known author, speaker and ultimately a candidate for Congress.

I want Star Parker's story to be the rule, not the exception.  I have an idea that will empower Americans and give them the opportunity to thrive.  My plan is to create economic freedom zones in distressed areas all over the country, including my home state of Kentucky, which will leave more money in the hands of the people who earn it. 

In economic freedom zones we'll cut income and business taxes to a single flat rate of 5-percent.  We'll cut payroll taxes for employers and employees so folks will go home with more money in their paychecks.  Burdensome, job-killing regulations will be removed, and business will expand.  More money and more jobs will flow back to the areas that have suffered the most in this economic crisis.  School choice will be expanded.  Parents will receive an educational tax credit, because it's parents, not the government, who knows what's best for their kids.  Economic freedom zones won't pick winners and losers.  The money will go to businesses that consumers have already voted for. 

The president's Promise Zones also address poverty, but his plan recycles worn-out ideas that haven't worked in the past.  His idea is that we should make it easier to funnel federal dollars back to local governments.  I think it would be better not to take the money from the businesses in the first place.  We need real jobs created in the real world, not more empty government promises.

Under President Obama the percentage of people working is at it's lowest level since the days of Jimmy Carter.  Roughly 11 million people are unemployed, and millions more have given up looking for work.  Our debt has nearly doubled since President Obama entered office and is now over $17 trillion.  Our credit rating has been downgraded.  Spending continues at unsustainable levels and we're borrowing more than $1 million every minute.

But the numbers tell only half the story.  Parents worry about their children growing up in a country where good jobs are few and far between.  More than ever before Americans wonder how they'll afford to send their kids to college and what will happen if they lose their job. 

I believe in an America where people are free to make their own decisions, helping each other as they help themselves, and I believe in an America with a strong safety net, but one that doesn't suffocate our resolve to better ourselves and our country.

The ticket to the middle class is not higher taxes on the very businesses that must create the jobs.  A thriving middle class doesn't come from shuffling the deck chairs on the Titanic.  Prosperity comes when more money is left in the private marketplace.

Families across America are worried.  Good jobs are hard to find.

Mr. President, where are the jobs?  You spent nearly a trillion dollars on make-work government jobs and still joblessness confronts the next generation.  As a country, all of us together must ask are we better off when we borrow money from China.  Are we better off when we print more money to pass around, hoping no one will notice that the emperor has no clothes.  The illusion wears thin.  It's time we choose another path.  Government spending sounds great, but what good is a welfare program that leaves people embittered, resentful and trapped, unable to climb into the middle class.  What is the virtue in making people feel hopeless, like they can build a good life in America any more.  Hope and change needs to be more than just a slogan.

Ronald Reagan once said that to love our country is to love our countrymen, and because we love them, we must provide them with the opportunities to make them equal in fact and not just in theory.  The war on poverty failed.  It has trapped us in multi-generational dependency.  The lesson should be that sending money to Washington and expecting central planners to send it back in a way that creates jobs is foolhardy.

Economic growth will come when we lower taxes for everyone, especially people who own businesses and create jobs.

If we allow ourselves to succomb to the politics of envy, we miss the fact that money and jobs flow to where they are welcome.  If you punish successful businessmen and women, their companies and the jobs these companies create will go overseas.  Lower taxes, less regulation will entice money and jobs to return home. 

Americans want opportunity.  A chance to work again.  I fully believe that most Americans hate the trap of government dependency but can't break free because big government gives them no exit.  I believe a better tomorrow is around the corner if we can see beyond those who entice us with the easy way out.  Hard work and sweat invigorate the spirit and provide a solace no government program will ever achieve.

We must choose a new way, a way that empowers the individual through education and responsibility to earn a place alongside their fellow Americans in the most prosperous nation ever conceived.  America has much greatness left in her.  We must believe in ourselves, believe in our founding documents, believe in our future, and then we will thrive again. 

Thank you and God bless America.

Notes:  This was one of several unofficial responses to the State of the Union.