- The Washington Times - Thursday, August 13, 2009

The country’s financial crisis started long before the recession officially began 21 months ago and will persist until lawmakers from Capitol Hill to California change their view that spending creates more jobs and economic growth, former House Speaker Newt Gingrich said Thursday.

“The crisis is real,” Mr. Gingrich said at the Washington-based American Enterprise Institute. “People think they don’t have to rethink things, just pay for them… . For 25 years we’ve been lying to ourselves.”

In a four-hour talk titled “Rethinking America’s Budget Process,” Mr. Gingrich, Georgia Republican, began with references to George Orwell, Albert Camus and Victor Hugo and closed with a 12-point plan to create more jobs — including tax cuts and investments in domestic energy.

He called for cutting employee payroll taxes, reducing the corporate tax rate and abolishing death and capital-gains taxes.

Mr. Gingrich said the existing financial crisis is largely the result of lawmakers ignoring facts and misconceiving the budget process.

“They refused to face facts because the facts are too frightening,” he said.

Mr Gingrich said Detroit was in trouble long before the city was hit by the recession, considering its high taxes and problems with unemployment, crime and high-school graduation.

“Not feeling safe in an enormous disincentive for getting capital,” he said.

Mr. Gingrich spread around the blame, faulting Republican Gov. Arnold Schwarzenegger for California’s financial problems and Democrats and Republicans for problems in New York — including a failure to reign in pension and Medicaid costs.

“New York is a bipartisan failure,” he said.

Mr. Gingrich said a good budget cannot be drafted unless lawmakers first examine the cultural and societal needs, then look deep into the future.

“Budgets are a function of government, which are a function of society,” he said of his plan, crafted through his D.C.-based American Solutions for Winning the Future group.

• Joseph Weber can be reached at jweber@washingtontimes.com.old.

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