Posts Tagged ‘government’

TARP Success?

October 5, 2010

Today, the Treasury Department declared that the government will only lose $29 billion from the TARP program.  This is being hailed as a huge success and that we saved the financial system and the economy, preventing a second Great Depression and barely losing any money.

I have some big problems with these statements.  First of all, most of the big banks that were infused with cash paid back that money within a year of the program starting.  How can a bank go from about to collapse to financially stable so quickly?

Think about Goldman, it received $10 billion from the government.  If they just took that money and invested it for a year in 3% government bonds, that’s $300 million!  Citi and Bank of America got $20 billion each.  That could turn to $600 million of pure profit.

Did the big financial institutions create a sense of panic, in order to get the government to step in and “save” them by taking over all their bad debts?  Did they know that this panic would lead the government create a web of regulations that stifles future competition?  Anytime banks and government come together, I have a feeling the banks are going to win.

Also, where did this money come from anyway?  We created $700 billion out of thin air, gave it to banks to earn interest on, took on their bad loans, and then they gave it back to the Treasury.   Will the government now put that money to rest?  Or will it eventually make it back into the economy.

And finally, $33 billion is still a lot of money.  We have just become desensitized to the number because we saw the $750 billion stimulus package and the $700 billion bailout.  $33 billion just seems like a drop in the bucket.

While the government claims the success of TARP, I find it hard to believe that it saved our economy and that the true cost was really that low.  We’re still mired in a stalled economy and the bad debt is still out there and has not been liquidated.  And with all the success of this bailout, business now knows that future bailouts will be sure to follow, allowing them to take more foolish risks and setting us up for even bigger failure.

Obama’s Healthcare “Overhaul”

May 10, 2009

Update – The more I read about this “savings” plan, the more I realize that it is really a way for the healthcare companies to lock in profits for the next 10 years.  You know that any time an industry as big as healthcare voluntarily offers a deal to the government, it is really to benefit themselves.  So, rather than opening a real healthcare debate, they have preemptively offered a $2 trillion savings.  They say “savings” but it is really a reduction in the rate of growth of healthcare spending.  Since the current rate growth is 7%, they are saying that if it was only 1.5%, the country would save $2 trillion in 10 years.  That’s not savings.

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President Obama has announced an “overhaul” of the healthcare system that he touts will save trillions of dollars.  Big healthcare companies are on board as well, because they promise to only raise costs 1.5% a year.  That sounds great, that costs will be controlled, but why should they go up anyway?  This just guarantees a 1.5% increase in their revenue each year.  We should be making huge cuts that result in decreases, not capped increases.

Also, Obama’s plan basically revolves around digitizing our medical records to make hospitals more efficient.  I guess, over the next 200 years, that could save trillions, but what about the up front costs?  There will have to be an increase in cost to digitize all the records and buying equipment to store them.  Who will pick up the tab?  If the government does, then it falls on the taxpayer.  If the government doesn’t, then it will be passed on through premiums.  It’s a lose-lose for the American public.

The only way we will ever control costs and cut health care costs is going to be to get the government and big healthcare providers out of the game.  Until then, costs will continue to skyrocket, and the quality of care will continue to decline.

Obama Cuts 0.47% from Budget

May 6, 2009

Today, word came out that President Obama has cut $17 billion from the 2010 budget.  While that is a lot of money to you and me, it is a measly 0.47% of the $3.55 trillion budget that has been proposed for this year.  Surely, with the way things are going, the 2010 budget figures to be even bigger, so the $17 billion will become an even smaller percentage.

During his campaign, Obama promised to go through the budget, line by line and cut programs that weren’t working or were not necessary.  Looks like he thinks 99.53% of all the government spending is necessary.  And he’ll probably tout this as the “change” he promised and the media and all of his supporters will eat it up.  They’ll just blame the Republicans and Bush for making all the spending “absolutely necessary.”

Just when I think Obama can’t be more of a hypocrite, he does something like this.  Why even announce you’re “cutting” less than one-half of one percent of the budget?  This country is going off a cliff, and Obama isn’t putting on the brakes, he’s flooring the gas.

Swine Flu Overreaction

April 28, 2009

The world is in hysterics over the “Swine Flu Pandemic.”.  This is a media fueled frenzy that is making a mountain out of a mole hill.  

Just a little bit of research on the internet shows that swine flu is not any worse than the normal flu.  Only 65 cases have been documented in the United States, and only one person that has been hospitalized.  In fact, only TWO people have died from the swine flu in the US since 1976, according to the Center for Disease Control (CDC).

Now, to top it all off, President Obama wants to spend $1.5 billion to prepare for and fight off the swine flu.  That is over $23 million for each confirmed case of the swine flu in the US right now.  

Another, much more potentially deadly disease, tuberculosis had almost 13,000 cases in the US last year.  Why aren’t we all up in arms about that?  People are fighting to get the government to spend $250 million a year to combat TB.

To put that in greater perspective, the ALS Association that is a charity devoted to research for Lou Gerhig’s disease has raised $49 million since 1985.  Every year, 5,600 people are diagnosed with ALS which is always fatal.  Do you think they could have found a cure or at least a treatment by now if they had $1.5 billion?  This is a huge waste of money and a misallocation of funds and resources.

Also, today, the State of California and the City of Los Angeles have declared a state of emergency, which allows for funding for the California Emergency Management Agency and grants them all sorts of special priviledges, and cuts off competitive bids for vaccines.  So, now a state that is already strapped for cash will be gouged by the big drug companies for swine flu treatments.

I cannot believe that we have become so accustomed to hundred billion dollar figures that we don’t even blink when the President wants to spend $1.5 billion on the flu.  Sure, it has a scary name like the “swine flu” but it still is basically the flu – you get sick and you get over it.  We should all be mad that the government is wasting more of our money, but instead, in the frenzy the media has created, we are all thanking Obama for saving our lives.

The Vegan Terrorist?

April 21, 2009

Yesterday, the FBI announced that Daniel Andreas San Diego has been added to their “Most Wanted Terrorists” list.  This is the first time a domestic terrorist has been added to the list.  He is an animal rights activists and detonated two bombsin 2003 near the headquarters of companies that engaged in animal testing.  No one was killed or injured, but there was property damage.

Here is San Diego, on the same list as Osama bin Laden.  According to the FBI, these were very sophisticated bombs that used kitchen timers.  Since when are kitchen timers sophisticated?  He also might be armed with a 9mm handgun, so you should consider him armed and dangerous.  Seriously, how does this man pose more of a threat than any criminal that is on the loose right now?

Also, the timing of his addition to the list is very curious.  Just last week, a Department of Homeland Security memo was leaked identifying “right wing extremists.”  Their reaction to the memo was that they track “left-wing extremists” as well.  The point is that our police state is starting to monitor more and more domestic activity, from militias to protesters.

Is the FBI, DHS, and the Federal Government getting more concerned with our activities in the US?  Do they fear that as we progress further into the New Great Depression that people are going to try and rise up against the government?  Are they trying to suppress our actions with scare tactics?

Just think if protests turn into riots and property is damaged?  Could these protesters be classified as terrorists?  What happens then?  Are they locked up in a military prison somewhere?  If you donated money to their cause, would you be implicit to their crimes? 

In each case of the government flexing its muscles, the actions become less fitting of the crime.  At what point will opposition to the government be considered extremism or terrorism?  We need to stand up for our rights and liberties before they are all stripped away.  This might sound extreme, but if we do not push back against the police powers our government is taking, what else do you expect to happen?

China’s Concern IS a Big Deal!

March 13, 2009

Today, the Chinese Prime Minister expressed concern over the value of the treasury bills and US dollar reserves they are holding:

“We have lent a huge amount of money to the US. Of course we are concerned about the safety of our assets. To be honest, I am definitely a little worried.” In rare comments on another country’s financial health, he added: “I’d like to take this opportunity here to implore the United States … to honour its words, stay a credible nation and ensure the safety of Chinese assets.”

This makes a lot of sense and should be a real concern of the United States.  This is potentially a HUGE HUGE issue.  We cannot downplay this!

China buys Treasury bills, and those funds are then used to fund our government spending and the stimulus packages.  If China stops buying them, we will have to either find a new lender, start printing more money, or stop spending.

We have printed over $2 trillion over the last 6 months.  Since the Federal Reserve does not report the total money supply, we do not know what effect that has had on the amount of dollars in circulation, but common sense would tell you that we have increased it by 5-10% at least.

The US dollar is strong right now because everyone is selling their assets that are paid for in US dollars.  Oil, stocks, bonds, and many other commodities are traded in US dollars.  So when people sell those, they need dollars in return.  Once they either spend, save, or reinvest that money, the demand and value of the US dollar will deteriorate.

China’s concern about their massive reserve holdings is very legitimate.   If we keep printing money, and the amount of dollars increases, their holdings automatically lose value.

China has already funded their first $600 billion stimulus package with their savings, which means they used part of their dollar reserves.  If they decide that US investments are no longer worth it, then they will start to sell their holdings and stop buying them from the US.

Once China stops borrowing from us and stops exporting all their goods and start keeping them at home, their economy will decouple from ours.  That would be great for them, and horrible for us.  A lot of people say that our economies are too linked together for this to happen.  I would argue that once the Chinese start buying the products they make, they will stop shipping them to us.  Peter Schiff has been talking about this for the last few years.  His prediction looks like it is going to come true.

If there is one national security issue that needs to be addressed, this is it.  Our government should not be reliant on another country’s government to fund it’s operations.  They could use their holdings as leverage, telling us that if we don’t do one thing or another, they will dump all of their holdings.  We need to live within our means and not spend more than we make.  It is not just an economic issue, but one that is important in us being the leader in the world.

Of course, Obama’s henchman have “assured” the Chinese that their investments are safe with more lip-service.  Here’s what Robert Gibbs said:  “There’s no safe investment in the world than the United States.”

Whew!  I mean, if that doesn’t assure the Chinese, I don’t know what will!  I mean, who cares if we are printing trillions of dollars and running a $1.3 trillion yearly deficit?  Who do you think is funding that deficit Mr. Gibbs?  If you are going to say something like that, you better back it up with actions.  Talk is cheap, especially when what you’re saying has no basis in reality.

Instead of going on about Madoff, Jon Stewart, or some other news item, this needs to be on the front page of every newspaper.  Our largest creditor is basically giving us a “past due” notice and is telling us to get our act together.  We need to stop using our credit card!  Instead, the White House is just blowing them off, which could lead to our creditor cutting us off.  If the Chinese lose faith in the US dollar, it will lose all of it’s value and become worthless.

We have been warned.  Now we have to act.

Real Debate Over Spending is Needed

March 11, 2009

Today, President Obama signed the $410 billion “Omnibus Spending Bill” which will fund our government for the rest of 2009.  In case you didn’t know (I didn’t until I looked it up) omnibus means that it is multiple budgets and programs all rolled into one big bill.  So, rather than medicare going in as its own item, it is tied with social security, education, and all other government programs.

The big debate today was about the 8,000 or so earmarks that totaled around $8 billion.  Earmarks get a bad rap because they go directly to wasteful pet projects of our representatives.  This money though, had already been allocated and was going to be spent anyway.  The only difference is who was going to spend it – Congressmen or government bureaucrats.

These earmarks are a symptom of the wasteful government spending, not the beginning and end of it.  We need to look at the real problem, which is massive government spending in first place.  We need to be debating the other $402 billion, and the record $1.45 trillion budget deficit for 2009 alone!  Everyone wants to reform earmarks.  Why not get rid of them altogether?

We need to realize that government (not just ours but any) has no source of income.  They need to create it, which comes in the forms of taxes, fees, and tariffs.  These massive budget deficits will either be paid for by raising taxes on us, or on our children and grandchildren.

We need to open up the debate and stop bickering about 2% of the spending of the entire government.  What happened to Obama’s “line by line” speech about the budget?  Do you think he read the 1,100 page spending bill line for line?  In a time when we need to start to save and practice sound economic principles, our leaders are throwing around billions of dollars like it’s nothing.  We’ve become so desensitized to huge, hundred billion dollar figures that we don’t even look at it twice.

We need to start over.   Just scrap the every government program and eliminate all taxes and start from scratch.  Only fund what is truly necessary and efficient, and then tax to only make up that amount.  We would all have more money and better run programs.  We can’t keep reforming and patching up broken government departments.  It’s beyond repair.

We need real debate and new ideas.  We need to open up the arguments that are off-limits in the media.  The debate right now is too narrow and they have us all focused on $8 billion, instead of on the other $402 billion.

More Government Equals More Recession

February 22, 2009

The latest headlines have the government taking a larger stake in Citi, upping it’s share to 40%.  This is just going to stretch out the recession we’re in even longer.  If they are going to take a stake in the failing bank, the Feds need to stop taking baby steps and flat out nationalize already.

Of course, letting the banks fail and letting the free markets work is out of the question now.  The reason is that government intervention has eliminated failure as an option.  It’s a tangled mess that all went back to the original TARP plan, that in hindsight, looks like what we needed.

The entire problem with the system right now is that there is too much bad debt and malinvestment.  The original goal of the TARP was to eliminate this debt.  Instead, though, the Feds realized that if they actually determined the market value for these securities, a lot of banks would fail.  They then modified the TARP to give money directly to the banks, so they could offset their bad assets.  This failed because the assets were basically worthless and no amount of money could offset the malinvestment.

So, here we are, with the banks still in the same predicament, and the taxpayers on the hook for $300-$700 billion.  We don’t the exact number because the government lost count somewhere along the way.  Remember, as protection for the taxpayers, we got shares in the banks.  So if they fail or get nationalized, we lose all our money.  Everyone else gets away for free while the taxpayers are left holding the bag.

Everyone talks about how bad the failures of Bear Stearns, Lehman Brothers, and Washington Mutual were.  Honestly, though, they weren’t that bad compared to the Great Depression II Obama is trying to create.  Shareholders lost everything, the bond holders got 20 cents on the dollar and a lot of people got screwed, but the failure was pretty orderly.  The bankruptcy system and the method of failure works.  Sure, it’s painful, but at least we know what we’re getting and we can move on.

We’re in a situation now where no one wants to let the banks fail, and we will bankrupt the nation and the taxpayers in order to make it work.  We’ve already been screwed over enough, and a couple more months of pain from the failure of a few more banks isn’t going to kill us.  Just get it over with so we can move on.  Don’t keep stringing this charade out.

The more the government gets involved, the bigger the conflict of interest and the bigger the problem gets.  We need the liquidate the bad debt.  Plain and simple.  We need failure and we need the free markets to work.  Why are we going to prop up these banks that made the terrible decisions that got us here?  It’s absolute nonsense.

More Rhetoric From Obama

February 21, 2009

Tonight, I read on CNN.com that President Obama wants to cut the national deficit in half by the end of his first term in 2013.  This is absolute nonsense, and I have no idea why he would even say something like this.  We are in the middle of one of the most massive government spending programs ever, and he has the gall to say he’s going to be able to actually cut the deficit.  When will we stop buying all the garbage that is coming out of his mouth?

There is no chance Obama will be able to even get the deficit back to what it was when he inherited it from Bush!  How are we going to balance it when we can’t even pay for the trillions of dollars we are printing right now?  He says he’ll do it by raising taxes on those making more than $250,000 a year.  Can our President be any more idealistic and naive?  We aren’t paying for all the stimulus and bailouts right now to begin with!  It’s all borrowed money from China!  In order to cut the deficit, you’re going to need to cut spending!

All I know is right now, all of this Hope and Change sucks.  He talks about urgency and needing to act now, and then when the stimulus package is passed, he says we’ll see our extra $13 a week in April!  Like that’s a tax cut in the first place!  And then he brags about how fast the tax cut happened, when it’s still 2 months away!

Then he wants to spend $275 billion more of taxpayer money to help fight off foreclosures for irresponsible borrowers.  Sure, some people might have lost their jobs and are falling behind on their payments who might need some help.  But I just read statistics where even if rates were cut to 2%, forty percent of these people facing foreclosure still wouldn’t be able to make their payments!

If they are going to give taxpayer money away, they should give it to the people who are current on their mortgage and who can make their payments.  Let them pay off their debt or buy a car or a foreclosed home.  Give the money to people who will be able to do something with it!

I cannot believe that there is not more of an outrage at the actions of our government.  I can guarantee you that over half the population disagrees with all of these bailouts, yet our government shows no signs of stopping.  Why should we all just sit back and watch our hard earned money go to pay some stranger’s mortgage?  At what point is enough going to be enough?  I can see now the “change” Obama was talking about.  It’s going to be the revolt of the American Taxpayer kicking his hypocrite butt out of office.

Source:  CNN

Thank God Cheney Can’t F-ck Us Anymore

December 21, 2008

Today, Vice President Dick Cheney defended the Bush Administrations actions of basically wiping their ass with the Constitution of this once great country.

The Face of Evil

The Face of Evil

He defended the domestic wiretapping, uses of exectutive power, and torture of terrorism suspects, saying he would do it all over again.  Also, Cheney said that the President has no checks and balances in the War on Terror and could launch a nuclear strike without Congress or the Courts to defend our country.

Really? Nuclear War?  What planet is this guy from?  Civil liberty?  Right to privacy?  Not in Cheney’s book.  He doesn’t care about anything except making the President the new King of the US.  While the neo-conservatives lost this election to Obama, they will be back and they will further advance their agenda of making the Executive Branch the sole source of power in the US.  I can’t believe Cheney has the gall to go on TV and spew this garbage!

Can we use this interview as an admission of guilt and throw this clown in prison for the rest of his life for treason?  As citizens, it is our job to hold our leaders accountable and follow the Constitution, which is the only document that grants power to certain branches of government.  Instead, we have let the Executive Branch grab more and more power.

Look at all the programs the Bush Administration has enacted – domestic wiretapping, recording out internet use, searching and seizing your property without a warrant, the Patriot Act, the right to go to war without Congress, setting up hidden prisons around the world, jailing US citizens without the right to trial, the new financial czar, the office of economic stability, and now the auto czar.  Not only have we stripped rights away from individual citizens, we are now nationalizing our financial system and our auto industry.  The government is really becoming “Big Brother.”

While the powers Bush grabbed seem to be used for fighting terror, how do we know Obama or the next President will not take this power further?  What if the next president decides that anyone who protests the government is supporting terrorists?  He could jail these protesters without the right of habeus corpus because of the powers he has taken. Or, he could search my home right now for writing this blog.  The powers granted to him allow the Executive branch to do this without a warrant.

Sure, he may never use these powers en masse against his own people, but who really knows?  Just the fact that this is possible should be enough to energize the public.  Instead, we are too busy fighting over gay marriage and other issues that do not directly effect our lives.  If we put the same passion behind restoring the government of this country to the vision of our founding fathers as we do in debating gay marriage, we would have a revolution starting tomorrow morning.

I know government will only get bigger under Obama, but hopefully he will have the common sense enough to restore some of the checks and balances on his power that Cheney and Bush have granted themselves.  I’m so glad that Cheney will be gone in a month and won’t have the chance to screw up our country any longer.  Hopefully, he’ll just go sit on the board of some company and f-ck over some shareholders, and not every single citizen of the United States.