Posts Tagged ‘stimulus’

Obama’s “New Foundation”

April 14, 2009

Today, President Obama gave a speech entitled “New Foundation” which gave an update on the economy and all of the government policies that are currently underway.

His opening portion of the speech ended with this remark:

And most of all, I want every American to know that each action we take and each policy we pursue is driven by a larger vision of America’s future – a future where sustained economic growth creates good jobs and rising incomes; a future where prosperity is fueled not by excessive debt, reckless speculation, and fleeing profit, but is instead built by skilled, productive workers; by sound investments that will spread opportunity at home and allow this nation to lead the world in the technologies, innovations, and discoveries that will shape the 21st century. That is the America I see. That is the future I know we can have.

The funny thing is that most of what he says makes sense and I totally agree with.  We do need an economy based on production and savings and not debt and spending.  This is the fundamental problem with our current economic system.  He goes on to blame our current crisis on “greed” and “instant gratification” but those arguments don’t hold any water.  We’ve always had greedy people who want things now.  If that were the case, we’d be in a permanent depression.

The problem is that Obama thinks that only the government can implement policies and programs that will accomplish these goals.  I believe that government is the worst possible agent to try and lead us into the future, and that they are only making matters worse.

From a purely economics standpoint, the government is taking resources away that the private sector would be using, or they are undertaking tasks that are not being done by private sources because they are unproductive and inefficient.  Look at the auto bailout, for example.  Imagine what a startup like Tesla or some other company could do with one billion dollars, a fraction of what the Big Three have gotten so far.  We could have a brand new, competitive auto industry for the amount of money that has been wasted propping up dead bankrupt companies.  I do not believe in bailouts and handouts, but if we are going to give money away, it should go to new production, not financial means.

Other examples of Obama’s “stimulus” are building roads, weatherizing homes, and building green energy sources.  If these were profitable endeavours, don’t you think the private industry would already be doing these things?  The reason they aren’t is because there is not any money or benefit to gained at this point in time.  By directing resources to these projects, we are taking money that could be used for other, more profitable forms of production, and putting it to unproductive uses.

To make matters worse, we are funding these projects and bailouts with printed money.  When you think about how a bank works, you realize that they need to have people depositing and saving money in order to make new loans.  The more money saved, the more money that can be loaned out.  The same should be true for the government, except Bush and Obama have been running trillion dollar deficits.  We aren’t funding our “stimulus” with saved resources.  We are just piling on more debt and creating money out of thin air.  In the long run, this misguided form of “stimulus” will hurt our economy more than help it.

Obama has the right intentions, and he keeps talking about fiscal responsibility.  However, his actions to spend more, inflate more, and expand the central government will only dig us deeper into a depression.  We need to stop printing money trying to reinflate our spending bubble, and let the markets work.  Right now, Obama needs to resist the urge to intervene and let the economy readjust and liquidate all of the malinvestment.  How can a small group in Washington know more than an economy of 700 million?  Stop trying to play hero and get out of the way, that’s what he should have said today.

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Why We Need to Abolish the Fed

March 18, 2009

The Federal Reserve, led by Ben Bernanke is going to kill America.

We had been inching ourselves closer to the abyss, but today’s announcement by the Federal Reserve has put us right on the brink.

The Fed is going to buy $300 billion in long-term US treasury bonds, and $750 billion in mortgage backed securities from Fannie Mae and Freddie Mac.  Their goal is to drive down interest rates to stimulate the economy.  The unintended consequence of their actions is the destruction of the dollar and life as we know it.

With our previous stimulus packages, we have been selling Treasury bonds to foreign countries to fund our spending.  China, Japan, and Saudi Arabia have been acting as our creditors.  Even though we were going deeper into debt, at least there was a method to the madness.

The new program by the Fed uses money created out of thin air to buy bonds from our government.  If that sounds fishy to you, it should!  What happened to our creditor nations?  Did they cut us off?  Is there something more going on here?

Most empires end with the collapse of their currency and the bankrupting of the nation.  Many times this has to do with a bloated foreign military presence as well.  This is exactly what is happening right now.  We are borrowing from ourselves with printed money.  At what point will inflation explode and our dollars become worthless?

Our standard of living is going to be compromised and we will no longer be the leading economy in the world.  We will have to get used to less growth and more of the same malaise we’re in now.

However, the silver lining to the impending collapse could be the return of sound money, savings, and production in the United States.  Maybe this is really a blessing in disguise that will destroy our consumer based economy and replace it with a production and capital based one.  Maybe that’s wishful thinking, but I’m trying to find a silver lining here.

If there was ever a reason to take the controls of the printing press away from the Fed, this is it.  We need to abolish the Fed now and let sound economic principles guide the way, not the whim of a Harvard professor.  This is a critical point in the history of our nation, and we are making all the wrong choices.

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

Obama’s Victory is America’s Loss

February 16, 2009

So, President Obama got his first “political victory” last week with the passage of his $700 billion stimulus package.  His win is now a loss for every taxpayer in America.

Is this what Obama’s “Hope” and “Change” has already come down to?  Political victories? What happened to reaching across the aisle and all the change he was supposed to bring?  So far, Obama’s policies and tactics look a lot like those of the last administration.

I understand the urge to help.  We all have our ideas on how to get this country going again.  I just don’t see how throwing a huge amount of money like a blanket on the nation is going to help anything.  How is building roads or filling potholes going to create lasting jobs?  This is just a huge patch job on a horribly broken system.

Also, this plan was so hastily put together that massive amounts of wasteful government spending has been packed into it.  How did the government come up with all the dollar amounts?  Was it calculated using all available data, or was it pulled out of some Senator’s butt? And how does $50 million towards the arts, $1 billion for ACORN, and tax breaks for golf carts and motorcycles help the economy?  It’s just “pork” under a new name.

And please don’t try to tell me about all the pork the trimmed from this stimulus package.  It was $850 billion and reduced to just over $700 billion.  We’re still talking about hundreds of billions of dollars!  If they really want to cut it, they should have cut it by about $800 billion.  This was all just eye-wash, making us think that our government is looking out for how they spend our money.

Instead of spending so much taxpayer money, Obama should be letting us keep more of our hard-earned money.  His “Make Work Pay” tax cut is downright laughable.  Thirteen bucks a week!  Hooray, now I can afford to pay off my mortgage and go out and buy a new car and plasma TV.

The Federal Government gets about $2.1 trillion each year in income tax receipts.  Instead of spending $700 billion, how about we cut all of our taxes by 33 percent?  Wouldn’t that benefit each and every one of us and stimulate our economy more than just handing out money to pet projects?

I know Obama is trying to help, but his “victory” is really a huge loss for America.  He had a chance to really help our economy, but instead is resorting to the printing presses just like the Bush Administration.  Government intervention and spending is what got us into the hole we’re in now, and more of it is not going to get us out.

Too Much Stimulus Too Late?

February 8, 2009

There’s been a lot of talk this weekend about Obama’s stimulus plan, which is set to be voted on this week by the US Senate.

While Obama was slow to unveil his plan, and now Congress has delayed the passage, we’ve all gone on with our lives.  We might not be making as many big purchases like cars, plasma TVs or ATVs, but we are still getting by.  The standard of living has been adjusted, but it’s not the end of the world.

The question now is if need such a huge package anymore.

Sure, the jobs picture is bad, but will adding jobs building roads in Montana and filling potholes in the middle of nowhere really “stimulate” the economy?  Will out of work people be willing to move and perform manual labor instead of collecting their unemployment checks?  How can we create jobs when we are still supporting these people on extended unemployment benefits?

What we really need right now is more money in the pockets of individuals and businesses.  All of this stimulus is going to be funded by taxpayer dollars in the first place, so why not put the money back in our pockets?  I’m not talking about the nominal $14 a pay period that has been hyped up either.  Why not cut our taxes in half or more?

This will allow business to invest in employees, new equipment, or shore up their balance sheets.  It will allow consumers to make larger purchases, pay off debts, or spend a little on non-essential items.

Instead, we are going to take the tax dollars of those that are still working, to pay someone minimum wage fixing potholes across the country.  The whole package is a trillion dollar “bridge to nowhere.”

If we want to invest in alternative energy, pull that out and make it it’s own bill.  Don’t co-mingle it with all sorts of ill-advised programs.

We need to start questioning the plans of the flawless new President.  Instead of Hope, Change and Progress, this looks a lot more like Desperation and Socialism.  All of these programs will be funded with our tax dollars, whether we like it or not.  This is taxation without representation, and one of the reasons we rebelled from the British.  As Americans we should be outraged, but instead we are placing faith in the new President because he gives fancy speeches.  Personally, I’d like to have that money in my pocket, not in the hands of bureaucrats building their pet projects.

More Obama “Change”

February 4, 2009

Today, President Obama warned of a “catastrophe” that would happen if Congress did not pass his $900 billion stimulus package.

Isn’t this just more of the same fear-mongering that has been going on in Washington for the last eight years?  Weren’t we scared with all the weapons of mass destruction Saddam Hussein supposedly had?  Weren’t we just scared into passing the first TARP bill because we were about to fall into an abyss? 

Now we’re supposed to sit back and not fight a wasteful trillion dollar package because of an impending “catastrophe?”

Aren’t we already into the “abyss” and in a “catastrophe?”  We’re in the deepest recession in 20 years, the stock market lost 30% of it’s value, failing banks are being propped up, and every day there are thousands of layoffs.  Attention to Obama – we’re already there, bud.

Spending and debt is what got us here in the first place.  It’s not going to get us out.  We need real change and real plans, not just huge dollar amounts and catchy names for the next bailout.  We need to cut spending and restore order to our economy, not make it worse by running around like a chciken with it’s head cut off, without a plan throwing trillions of dollars around.

So far, Obama’s “change” is looking like a continuation of the same failed policies of the Bush Administration.

Source:  AP

The Case for $350 Billion – New York Times Style

January 14, 2009

Here’s a very interesting “News Analysis” from the NY Times that reads more like a big government propaganda piece than an actual analysis.  It makes the case for giving banks more money, and how the TARP plan so far has pretty much done it’s job.

I started reading it, and a couple of paragraphs really got me going.  Here’s the first one:

The most glaring example that the banking system needs even more help is Citigroup. Though it already has received $45 billion from the Treasury, it is in such dire straits that it is breaking itself into parts

Huh?  That’s why the banking system needs to get fixed?  So what if it is breaking itself up?  It got into this mess by comingling their investment banking and commercial banking.  If they have to break up, then at least they can separate their good units from the ones that are strapped with bad debt and underperforming assets.  That’s a good thing!

Here’s another gem:

Even some of the bailout program’s harshest critics acknowledge that things most likely would be even worse without it, and that the bailout had accomplished its most important goal, which was to prevent a complete collapse of the financial system.

However, they don’t name any names or quote anyone here.  It’s just what these “news analysts” want to say.  You can’t definitively say that we’re better off after the bailout.  Maybe the banks are better, but you and me?  We’re still screwed.  The financial collapse didn’t happen overnight like it would have without a bailout.  Instead, we’re making it happen over months, and dragging the process out, leading to more hardship for all of us.

And here’s some pure comedy:

Regulators require banks to keep a healthy cushion of capital. But this time around, the banks are struggling to plug their deepening holes. Private investors are scarce. For all but a small group of healthy banks, bankers and analysts say, the government may be the only investor left.

Obviously, the authors of the article have no idea of how the US banking system works at all.  The first line is a dead give away.  Healthy cushion of capital?  You mean that 10% of all the money they loan out?  Fractional reserve banking does not require that much of a cushion.

This is an article full of stuff, but little substance.  It reads like an article trying to dumb down things enough to sway people to the views of the author, and it is not very persuasive.  The more I read the NY Times, the more I realize how their “analysis” is really written with a pro big government stance.  Please go out and educate yourself and read other sources of news and learn about our consumer based economy and our sham of a banking system.  Then you won’t be swayed by propaganda from news agencies like the New York Times.