The environmentalists gave our new president a lot of support (when they weren't at the airport for a sendoff of Al Gore on his private jet). Don't you think they deserve to be paid BAraCK? Well, on page 119 of the "stinkulus"bill", They got $600 million for grants to study "diesel emission reduction", and $650 million for "alternative energy technologies" and "energy efficiency enhancements" (whatever they are). Then, on page 176,...the best yet...$1.5 billion for "Green Schools". (I didn't know that hue was so expensive, couldn't they pick another color?)
The point here is not to argue whether any of these projects are good for us or not. The point is that no informed person can believe that the financial credit crisis or the economy is going to be helped any more than tangentially by this $2.75 billion of taxpayer money. This is another example of declaring a crisis, and then loading up the solution with favorite social and political spending programs. But we're not supposed to ask what's actually included in the "stinkulus bill", just believe we have to have it right away. Why?...'cause Obama say so.
And, the environmentalists are happy...because we can check them off on Day 3 of the meter watch...they've been PAID BAraCK!
Here is another analysis on the STINKULUS Bill. It was written by Ronald Utt. The text of his article is below. The link to it is at the end of the article.
ReplyDeleteTHE economy's worsening by the day and in need of a quick boost. Yet the $800-plus billion "economic-stimulus" bill now being rushed through Congress is anything but.
Democrats tend to believe that you can help jumpstart an economy by investing in transportation projects. Yet only 7 percent of the plan's spending component is aimed at our highways and byways.
And most of that is unlikely to actually do much good. The US Department of Transportation notes that only about 27 percent of the transportation stimulus money would be spent the first year. And the bill allows the spending to go for projects that may not be completed for three years - meaning that some of today's unemployed might have to wait until 2012 for a job from this measure.
Worse, the rest of the bill's spending does even less to boost the economy. It's little more than a massive bailout of marginal federal programs and profligate state governments.
Perhaps the most laughable initiative in the bill is its bid to revive public housing - a program that leading Democrats as well as Republicans have been phasing out since the early 1970s in favor of the more attractive, and cost-effective, housing vouchers.
The "stimulus" bill would spend $5 billion to build more public housing.
Huh? This recession started in good part because of a housing glut: The collapse of the housing bubble meant that America had built more homes than it could pay for. As a result, the number of vacant housing units is at an all-time high.
Why not instead take advantage of the millions of vacant units in a process that could also help deter foreclosures?
Probably because, under the Davis-Bacon law, anyone building new housing with federal money must basically pay union wages. Using vouchers, by contrast, relies upon the marketplace, where unions must compete fairly. And unions are a core Democratic Party constituency.
The bill also rewards other federal programs with doubtful stimulus benefits: aquaculture, the National Endowment for the Arts, the Fish and Wildlife Service, energy-efficient federal buildings, the Smithsonian, Pell Grants, Head Start, lead-hazard reduction and wild-land fire management. ACORN and similar groups would gain access to some of the billions in new community-development funds.
Amtrak, meanwhile, would get another $1 billion on top of a multibillion-dollar increase (over five years) that Congress gave it late last year.
And let's not forget state governments, which would share in $79 billion of general fiscal relief, plus $87 billion more in Medicaid assistance.
In this regard, the plan represents a massive and unprecedented peacetime transfer of wealth and income from the beleaguered taxpayers to a bloated public sector - where, oddly enough, the unemployment rate remains remarkably low.
On top of all the new money to expand existing programs, the bill would also extend the federal government deep into new areas of responsibility, like public-school construction and rural broadband investment - from which it would likely never extract itself.
But this, regrettably, is the least of the failures of the supposed "stimulus." At a time of economic peril, it will make things worse - by absorbing massive amounts of scarce resources and credit that could better be deployed to the nation's already troubled financial markets and loan-starved businesses.
This measure is most likely to leave us with double-digit unemployment rates a year from now - and Congress responding with an even larger bailout. America would find itself stuck with a mediocre economy more like continental Europe's than the vibrant system that made us the most prosperous nation on earth.
The nation needs a stimulus plan that actually addresses the problem we face - the very real prospect of an economic catastrophe. This plan doesn't do that.
President Obama must decide whether the voters put him there for a purpose no better than validating a massive congressional fraud on the nation's workers. To show real leadership, he should reject this costly and ineffective proposal in favor of something that will work.
Ronald D. Utt is a senior fellow in economics at The Heritage Foundation (heritage.org).
http://www.nypost.com/seven/02042009/postopinion/opedcolumnists/empty_stimulus_153410.htm
I'm interested to see what response, if any, comes from Eric and those with left leaning ideas.
Some simple math...
ReplyDeletehttp://www.talkingpointsmemo.com/archives/2009/02/adding_it_up.php
Anon,
ReplyDeleteThe article from the Heritage Foundation is an excellent post. It does a good job explaining why this bloated "stinkulus" bill will not help the economy. There is a very good point near the end that hasn't been addressed by me (or any one in the media). This is what some economists used to refer to as "crowding out". When the public sector initiates large spending programs they are competing for capital and tend to make less available for the private sector, i.e. "crowd them out". Since the private sector is more efficient than the government, more of the available capital ends up in less efficient programs. Thus, some economists believe that huge government spending programs actually deepen, and/or lengthen, recessions. This is especially worrisome when extremely tight credit is one of the biggest problems in this recession (do you care to opine, Dean Farmer?).
But, Anon, you are not supposed to be looking at what's actuallly in the "stinkulus" bill, just call for its passage quickly, before there's a "catastrophe". Why, you ask?...'cause Obama say so.
The Old Man
Democrats - Thy Name is Hypocrisy
ReplyDeleteWhile Obama chides Wall Street for bonuses and salaries, he says nothing about Democratic Congressman chartering a special train and wineing and dining at the Kingsmill Resort and Spa in Williamsburg, VA. Perfect example of "do as I say, not as I do".
Obama says companies that make poor decisions and thus need "bailout money" can't have anyone earn more than $500,000.
Well, the organization that wastes the most money, throws it away on useless projects, siphons off more to to pals and cronies, and has the largest deficit on the planet is the US Government. Yet Obama doesn't say a word about cutting down the runaway spending of this organization - instead, he wants us, the taxpayers to ante up $1 Trillion, at least half of which is useless and won't help the recovery.
We, the taxpayers, are fed up with the mindless spending of Washington bureaucrats.
During the campaign Obama said he would look at every line item of a bill and approve only reasonable amounts and projects that were needed. Yet, in the first 10 days of his term, he wants to ram $1 Trillion of mindless spending down our throat.
If he were the leader he claims to be, he would tell the idiot Democrats in both the House and Senate to put the country first, put only projects that create jobs into the bill, and chastise them for even proposing such reckless spending.
If he wants to take the lead, he should impose 10% wage cuts across the board for all government employees. Why shouldn't the public sector share the pain along with the private sector?
The following article is from today's NY Post, and summarizes this situation very accurately.
I ask Eric and the rest of you who voted to put Obama and the Democrats in office to keep an open mind when reading it, and tell me why the article below is not 100% correct.
It's just the future of your kids and our country that is at stake.
SAVE OUR STIMULUS
Feb 6, NY Post
Does the National Institute of Standards need the extra $357 million it gets in the "stimulus" bill? Its entire budget last year was $931 million, so we're going to wager no - unless it will employ the thousands of out-of-work standardologists we keep hearing about.
Do we need to spend $1.1 billion right now to create the Federal Coordinating Council for Comparative Effectiveness Research? Say what?
This is not a joke - it's a genuine outrage, an insult to America's intelligence. It's a giveaway to every Democratic pet cause and inside-the-Beltway butter-my-bread program there is.
And Obama knows it.
The nation is crying for leadership, is crying for help. It's crying for . . . hope. And change. And all those things we were promised by the intelligent, charismatic young man who swept us off our feet and said he could make Washington, DC, right again.
The critical thing to understand is that it is not too late. President Obama could march up to Capitol Hill tomorrow, get congressional leaders in a room, and come out six hours later with a much better bill.
Knock a few heads together, say no to a few congressional porkmeisters, tell them to take their 2011 pet projects and shove 'em where the sun don't shine.
If you really want to scare them, tell them you'll go out and campaign for their opponent in the next election - regardless of party - if they don't give you the right bill to sign.
One packed with funding for shovel-ready projects, one that incentivizes small businesses to hire, one that cuts everybody's taxes and puts money in people's checking accounts so they can spend it on the barely-breathing retail sector.
Every mayor in America can give you a list of 10 projects that will put local construction workers on the job within days, not years.
And if nonsecurity discretionary spending is going to jump a staggering 81 percent in 2009 thanks to the bill, surely we can find a few billion dollars for our overstretched and worn-out military after it won two wars. That would be truly useful new spending.
Only two weeks into his presidency, it's already time for President Obama to put up or shut up - to put our money where his mouth was during the campaign.
If he saddles our nation - and our children - with $1 trillion in debt for the same old, bloated, wasteful Washington spend-a-palooza while unemployment goes to double digits and the breadlines grow longer, he will not be remembered as a new Abraham Lincoln.
He will be remembered as the man who presided over the total collapse of the American economy - and the superpower status built on top of it.
Hypocrisy indeed.
ReplyDeleteIf you're wanting to point fingers over our nation's bewildering national debt, you're going to have to let off Obama and go chase down ol' Georgie in Texas. You show me careless spending of trillions of dollars, I will show you the Iraq war. The biggest Charlie Foxtrot this great country has ever had to put up with. We're so up to our eyeballs in IOU's from the countless missteps of the Bush Administration, that even China is fed up with us now.
But that's a debate for another day. I suppose there's no use in looking at the mistakes from the past (except to hopefully learn from them). What we need to focus on now, is the future, and how Obama will attempt to correct these blunders he inherited from George Christ Bush.
Anyone who has ever studied public economics should know that in times like these, government spending is a common, and arguably necessary, strategy. Just look at what FDR did during the Great Depression! We could let the market run its course without government intervention, but I think we all know why that's not an acceptable idea. It's the government's responsibility to look out for it's people, especially for those who are less fortunate, and who would most certainly suffer the most (and are suffering the most) should the economy hit an even rockier bottom. This stimulus package is not an extravagance, it is a necessity. The key is not to just give money to people in the hopes that they'll spend it, like Bush did. The idea is to create programs that give people jobs, and that will help to save money in the long run.
That's what Obama's plan does. It will create thousands of jobs to try and restrain our debilitating unemployment rate, and it invests in many other things, like Green buildings (what's wrong with blue ones, you ask?) that will help save billions of dollars in energy costs in the long run.
The argument that our country can't handle all of this spending in light of our current debt (keeping in mind that this spending wouldn't be any problem at all if we hadn't already thrown 10 trillion into our Middle Eastern money pit) is flawed. Nobody has any intention of spending the 1 trillion from the stimulus package at one time. It will happen gradually, and most likely when its all said and done, the entire trillion will not be used.
What's more, for those people who complain about the other programs the stimulus package covers that they feel are unnecessary (and which make up only about 2% of the entire bill), I can't say anything more than "sorry." Obama is not spending money on anything that he didn't say he would spend money on. As someone who voted for Obama, I couldn't be happier that he is giving money to improve education, our country's sexual health, science and research, and much more. I've spent the last eight years disagreeing with the choices that our president has made--its nice to feel like my opinions are being represented for once. For all of you irritated conservatives who disagree with the stimulus package, it's not that Obama is doing anything unethical (which he isn't), or that he is not representing his constituents properly (because he is). This is just what it feels like to be on the losing side.
"This is another example of declaring a crisis, and then loading up the solution with favorite social and political spending programs. But we're not supposed to ask what's actually included in the "stinkulus bill", just believe we have to have it right away. Why?...'cause Obama says so."
ReplyDeleteTo be fair, both parties are guilty of this sort of behavior. George W. Bush and the PATRIOT Act spring to mind.
Hey Adam,
ReplyDeleteOops, you misquoted him. It's supposed to be: "Why?...'cause Obama say so." If you include an 's' after 'say', you lose the childish racial innuendo.
-Freyguy
INRE: Freyguy's response to Adam H.'s comment: It didn't take long for the liberals to start saying any critic of Obama is a racist. The expression I use "...'cause Obama say so" has nothing to do with racism. I'm not aware that this has ever been a "black people"s" expression, but when I was growing up it was a common response to "why do I have to" when an adult or superior had no logically compelling arguement to say "...'cause I say so". I simply substituted Obama as the "I" parental (or elitist) figure, asking we common folk to not question him or the "stinkulus bill", but to accept it without question. Please liberals, remember, the purpose of this Blog is to have a civil discussion of different points of view, with a little humor, and passion is allowed too. But let's stop accusing conservatives of "racism" everytime they disagree with a president who happens to be have dark skin from one side of his family. I've never heard president Obama use that old expression I used, but if he did (or some other expression one might make fun of), is it okay to make fun of the way a president speaks, my liberal friends?
ReplyDeleteINRE: Adam's original comment on my "stinkulus bill". I agree with you, Adam, that both parties are guilty of spending like drunken sailors (although I'm not sure I agree with the Patriot Act as part of that). I am furious with George Bush and Henry Paulson for the TARP plan and accelerating us down the road to socialism. We conservatives who voted for Bush never got the fiscal restraint we thought we would get. But the big slogan in the Obama campaign was "Change you can believe in"...the politics of hope, not fear...bold, fresh, new ideas...transparency, and clean high integrity government...bipartisanship, an end to petty bickering and party line politics....leadership that reached across the aisle...restraint and responsibility. Don't these sound awfully familiar? They should, they were repeated endlessly in Obama's campaign (and even to me, he sounded believable). But, please, try to review each of those basic tenets of his campaign carefully and objectively. Where is the "change"? The "stinkulus bill" is as old time Washington, partisan politics as you can get. Full of pork and earmarks for favorite constituency spending programs, even power politics could only arm twist 2 minority party votes in the Senate and none in the House. Never mind whose fault that is...there is zero bipartisanship in this, the first and (according to Obama) most important piece of legislation in his administration. So, I'm looking for the "Change" and the "Bipartisanship" he promised. It cannot be contested that those tenets are present in the "stinkulus bill" (different earmarks and pork for different constituents, but the same old game).
How about "transparency"? The new administration (unfortunately) got its first test early with the Blagojavic senate seat selling scandal. The president strode to the microphone and announced that he was doing his own internal investigation, and (in the interest of the transparency promised) would report the findings publicly within a few days. That was a month ago. Even Dick Cheney couldn't keep administration members that quiet.
And this past week the new president was out there warning of a "catastrophe" if we don't agree with his spending bill NOW. The tumble into "deep recession could be irretrievable" if we don't act NOW (i.e. agree with his "stinkulus bill"). This sounds alarmingly like the "politics of fear" to me.
You're right Adam, Washington was this way, with pork, earmarks, bloated spending, partisanship, fearmongering and secretiveness long before President Obama, and is practiced by both parties. But, Adam...President Obams ran on "Change", so saying "the other guys do it too" doesn't excuse him.
The Old Man
As regards the stimulus package here are some thoughts for y’all (especially anon) to consider:
ReplyDeleteFirst, FDR’s Screw Deal, oops, I mean New Deal, didn’t get us out of the great depression, World War II did. Economic history shows the country was in the midst of a second depression in the late ‘30s. Even if you believe that the New Deal was good for the country, it took almost 10 years for it to effect positive changes. From the progressive perspective, FDR did do one good thing: he raised marginal federal tax rates, during his last term, to 94%; that’s right, young’uns, $94 of every $100 earned went to the ‘gubmint. Prior to FDR’s first election in 1932, the top marginal tax rate had been 25%. He also attempted to simplify IRS Form 1040 by reducing it to only two lines:
1. List all your earnings.
2. Send it in!
Sorry, just kidding on that one.
Second, the word “its” in anon’s third paragraph has no apostrophe in it. “It’s” is a contraction of “it is”, not the indication of a possessive form of the word.
Third, as a conservative, I actually believe in the stimulus package!
However, before the Old Man and others clutch their hearts and prepare for a myocardial infarction, please read the post below which I have extracted from a prior e-mail I sent to the lovely Vanessa and FreyGuy on the financial crisis which precipitated the need for a stimulus package. At the end, it offers a truly ‘terminal’ solution for the free spenders in Congress.
Vanessa/Eric -
It's even worse than this:
Back in the early '90's, federal bank regulators, during their periodic examinations of bank safety and soundness, were formally criticizing banks (i.e., in their written regulatory reports to the Board of Directors) if more minority loans were turned down than non-minority loans. I.e., there was an "equal outcomes" policy at work. In a context I'm sure Eric can appreciate, it was as if he had been told that while he had studied harder and was smarter than his peers, all his classmates would also be receiving 'A's, since it would constitute discrimination to grade otherwise.
Unfortunately the Banks had insufficient backbone to resist this "social engineering", so let's not leave them blameless. This policy morphed and expanded into the Fannie/Freddie debacle referenced earlier. In fact Franklin Raines, Fannie's CEO, and purely coincidentally, a minority himself and former Clinton Budget Director, bonus pay was partially determined by the number/amount of minority loans Fannie made (HMMM, ...., no conflict of interest there!)
Fannie & Freddie were making sub-prime loans (i.e., to borrowers of less than stellar quality) to promote minority home ownership. Many of these loans were written with "teaser rates", i.e., low initial loan rates which could rise, ofttimes dramatically, after 3 to 5 years. As long as home prices continued to rise and borrower compensation increased, the future increased loan servicing could be met, or at least the house would provide adequate collateral to cover any defaulted loans.
But this is a house of cards.
Once defaults started to increase because compensation didn't increase to cover servicing, house prices staggered, which further increased defaults, which further eroded home values, sort of an endless death spiral, ...., you get the picture.
Adding to this deepening mess were a group of borrowers, who consciously decided to act immorally. These were people who could pay their mortgages, but simply chose not to. It works like this: You own a $1,000,000 home with a $750,000 mortgage. The above spiral reduces your home's value to $650,000. So you simply default - even though you can still pay - and stiff the bank for the $100,000 shortfall. You're $100,000 richer than you would have been and who cares if you behaved unethically and broke your contract. In certain circles, especially around NYC, this is not considered immoral, but sound financial management.
So what's this got to do with Fannie/Freddie and the "brilliant" Harvard trained lawyer Franklin Raines? Well most of the mortgages written by banks and/or mortgage companies were sold to Fannie/Freddie who turned them into securities called Collateralized Mortgage Obligations (CMOs) which work as follows:
F&F buy $1 billion worth of such mortgages and then - with Wall Street's help - turn them into $800mm of AAA- rated securities split into different groups called 'tranches' (now there's a word to add to your personal lexicon). The reason they're AAA-rated is because the $800mm is backed up by an initial $1 billion in collateral and we all know house prices always rise and defaults couldn't possibly ever erode the mortgages' value to under $800mm. Except they did! OOPS!
Now the institutional investors (banks, broker/dealers) who bought these securities from F&F because of F&F's quasi-governmental financial guarantee were suddenly looking to F&F to make good on that guarantee. But they'd already sold the securities, which removed them from F&F's balance sheets, and booked the rather large profit from the discounted present value of the 3% differential between a 30 year income stream at 7% (the mortgage rate) and a 4% expense stream (the securities' yield).
Now for the proverbial stick in the spokes. The fundamental premise of any asset sale, whether a 'sophisticated' financial derivative or a college textbook
(example: Eric Frey, quantum physicist and future discoverer of the Grand Unified Theory, sells his Freshman physics textbook to the Miami of Ohio bookstore for $10. The bookstore later discovers that Eric has written notes all over the pages. They contact him. "Hey, Frey. Give us our money back; you wrote all over the pages." Frey: "Stuff it, pal!" (he talks like his father). "My notes will help the next guy understand the material, which is immaterial since you're going to give him an 'A' anyway, even though he'll be dumber than I am, and study less.")
is that the entire risk is transferred to the buyer. Read that sentence again ...... RISK TRANSFERRED TO BUYER!
But if you're providing a guarantee, you haven't sold anything, because you NEVER TRANSFERRED THE RISK! You should have received financing treatment which would have negated the upfront booking of the profit, which would have lowered F&F's profit, which would have taken $$ out of Franklin Raines' pocket.
Now all of this was being overseen by two of the three stooges, Chris Dodd, Chmn, Senate Committee on Banking, Housing, and Urban Affairs, and Barney (restless-foot-under-the-stall) Frank, Chmn House Financial Services Committee, who - OMIGOD - just happened to be among the largest recipients of Fannie/Freddie largesse.
However, before I prick these jerks, (or, perhaps in Barney's case, 'jerk these pricks'), please pause briefly to reflect on the following hoary query:
Q: What's worse, ignorance or apathy? A: I don't know and I don't care.
Well, there's an analogy w.r.t. our elected reps:
Q: Are you uninformed or just plain dumb? A: BOTH!
So, in this financial system bailout, as taxpayers, we're being asked to permit Curly and Moe to help rescue what they helped create. DUH! These denizens of the less-than-deep couldn't find their way to water, if they were standing on the shore with one foot in the surf.
Nonetheless, I'd encourage our elected reps to vote 'Yea' on the rescue if the proffered bill had but one more 'sweetener' attached.
Here it is: Any member of Congress who was affiliated with this unfolding disaster, must, upon passage of the bill, resign immediately and may have up to three days to commit seppuku on the steps of the United States Capitol, after which, have they not yet done so, a citizen taxpayer will be selected by competitive financial auction to perform the act for them, with all proceeds going to the U.S. Treasury. This should help alleviate the financial crisis, since I imagine bidding for the honor will go quite high.
Finally, if Congress really wanted to stimulate the economy, it would do three things:
1. Instead of the government owing preferred shares in the companies who’ll get bailout moneys, the shares should be issued to all taxpaying American citizens. This is because the taxpaying citizens are paying for it anyway, so they’re the real owners, not Washington. In rough numbers, if the package is $1 trillion and there are 100 million taxpayers, each one gets about $10,000 in preferred stock.
2. Cut the long term capital gains rate temporarily to 0%. This is a powerful psychological incentive, but won’t cost much since there are virtually no capital gains to be had, given the stock market collapse.
3. Allow unlimited deductions for long term capital losses (the annual cap is now $3,000) per year. This will help capital flow to those industries/companies where the future holds promise.
And, finally, here’s my pork proposal, since, in a Democratic Congress, every bill must have some:
Build a high platform in front of the U.S. Capitol as a public area on which the above mentioned ritual suicides will take place. We can stake the heads of the recently congressionally deceased, just like Olde England, and the citizenry can throw organically grown vegetables and fruit at their former representatives. With the street vendors needed to supply the “ammunition”, it’ll be a real boon to the local economy!
The Old Man,
ReplyDeleteI did not accuse you, "any critic of Obama", or "conservatives" of being racist. (That would clearly be an indefensible accusation.) What I said was that a particular statement that you have repeated contains racial innuendo. Why?...'cause I calls it like I sees it!
-Freyguy