The 2009 Stimulus Package: Another Gaff In The Making

So where is the rest going? Some of it is going to states who keep on spending despite massive budget shortfalls. Kansas recently admitted to not having enough money to send residents their refund for over paying their taxes last year. What are some of the things these states want to spend money on? According to Obama “Any road funds should go first to maintenance and repair of structurally deficient bridges and roads, not new highways or lanes;”-us.prig.org. However a 19-state study quoted in the same article suggests that “a majority of states plan to spend stimulus funds on new highway construction projects, rather than focusing on unmet repair and maintenance needs, and investing in energy-saving public transportation projects.” So how is this stimulus plan going to help? If Obama knows best how this $800 billion should be spent and if it is not spent as he directs does that not mean we the tax payers are getting screwed over again? We have already passed a $700 billion bailout for banks that is not getting spent as it should be. By the way Bush "accidenlty" overpaid them by $78 billion, oops! Ford Motor Company has already taken its piece of the pie and designated it for Brazil. GM and Chrysler want another piece of the pie. I’m sure many of you remember AIG planning luxury brain storming trips and the $87,000 rug bought by Merrill Lynch President John Thain. Let me repeat this again for those of you who plan to act surprised when this bailout slash campaign payoff fails. We have already passed a $700 billion plan that has not made companies accountable for what money is spent on and in many if not most cases the money has not been used as it was in tended. In others it didn't help! As the Obama deadline to pass the bill drew closer our politicians again rushed to do another shoddy job on $800 billion stimulus plan that will do exactly the same thing the last one did. By the way if you have not heard Obama has already mentioned the possibility of another bill for around $50 billion so don’t get your hopes up that the Republicans pulled off anything resembling a victory by demanding the bill be trimmed down. P.S. I am wrong. Between now and when I started writing this a few days ago that figure grew!!!!! It is now $75 billion according to MercuryNews.com Do I hear $100 billion? Anyone? Any takers for $100 billion?

Besides Republicans who else is against the bill? After all Republicans have not been the most frugal these past 8 years now have they? Perhaps we should see what people with a bit more street credability think? Cato Institute sent a letter to Obama with the names of 200 economists who think America is getting a raw deal. “In the form of a letter to Obama, the ad is signed by some 200 economists, including three Nobel laureates -- Edward Prescott and George Mason's Vernon Smith and James Buchanan -- listed prominently at the top.”-Washington Post. Some other names on the list include professors from BYU, KU, NYU, UVA, Duke, Univ. Chicago, Columbia, and even Harvard. In many cases there are multiple professors from the university that have signed the letter. I do wish there could have been a few from places like Princeton, Berkley, or Stanford. However any list that includes UVA and Duke multiple times along with Columbia and Harvard is by no means shabby. There are enough big names on this list that Obama should have given pause to his idea and at least spoken with some objectors instead of preaching dooms day at town hall meetings to people who are so memorized by him that they can’t even form a coherent question. Even Clinton his telling Obama to cut the dooms day crap! 

What are the possible future consequences of this bill? How about inflation? Not too many people seemed concerned that spending this much money could lead to inflation. Let’s think about this there are three locations our government can get money and they are the tax payers, loans from abroad, and printing money. The first is obviously not going to help. Americans many are already strapped for cash. The second has always been an option in the past. However, is it still an option now? George Melloan who writes for the Wall Street Journal states that “As of Nov. 30 last year, China held $682 billion in Treasurys, a sharp rise from $459 billion a year earlier. Japan had reduced its holdings, to $577 billion from $590 billion a year earlier, but remains a huge creditor. The two account for almost 65% of total Treasury securities held by foreign owners, 19% of the total U.S. national debt, and over 30% of Treasurys held by the public.” Can we expect these two countries to keep buying our debt when we are drastically cutting back on buying cheap Chinese goods and Japanese goods like Toyota and Sony? As these countries face their own economic problems I don’t think we can rely on them to keep bailing us out. This leaves only option three as a means to generate money and printing more money creates inflation. I doubt many Americans really understand this concept which is exactly why I believe Obama will demand more money be printed when he can no longer rely on China and Japan to keep shelling out the dough, thus causing inflation “We learned that in the late 1970s, when the Fed's deficit financing sent the CPI up to an annual rate of almost 15%. That confounded the Keynesian theorists who believed then, as now, that federal spending "stimulus" would restore economic health.”  If you don’t believe Mr. Melloan then may I suggest you google the term “stagflation”. The inflation that we are about to experience if Mr. Obama does not get spending under control happened in the 1970’s under Carter’s watch. It really is a shame that we can’t learn from the past. Excessive government spending does not help the economy.

Another consequence that Barney Franks would like to see is limiting the income potential of all corporate leaders. “Congress will consider legislation to extend some of the curbs on executive pay that now apply only to those banks receiving federal assistance, House Financial Services Committee Chairman Barney Frank said.“There’s deeply rooted anger on the part of the average American,” the Massachusetts Democrat said at a Washington news conference today.He said the compensation restrictions would apply to all financial institutions and might be extended to include all U.S. companies.” I’m sure you don’t need reminding that all corporate leaders are evil rich tyrants. Even companies like State Farm who have steered clear of AIG stupidity and have never laid off workers in the history of their company and who through smart management will actually be hiring more employees in the coming years should be forced to bow down to politicians in Washington. By the way this idea of Barney Franks falls under a specific category or government. You might try looking it up online.

Another consequence you may know about has to deal with health care "those [items] that are found to be less effective and in some cases, more expensive, will no longer be prescribed." This is very similar language that is used in the British National Health Service. If this does not scare you then read the book “Critical: What We Can Do About the Health-Care Crisis” written by Tom Daschle the first nominee to head the Health and Human Services Department. It seems logical that since Obama has talked about nationalizing health care and that Daschle was his first choice then Daschle’s book would give us a fair clue as to what the democrats mean by slipping in this sort of language and more importantly the fact that they wanted the bill passed before anyone had a chance to read what was really there. I’m not generally one for conspiracy theories but when people start acting in a blatantly secretive manner when there is no reason to I do get worried. If you want some decent reading about the liberal mentality that governments can run health care better than the private sector please read an article found at The American Spectator titled “Stealth Care Stimulus” in this article the American Association for Cancer Research states that it is afraid that wording like those mentioned above could lead to "restrictions on patients' access to treatments and physicians' and other providers' ability to deliver care that best meets the needs of the individual patient." If Obama gets his way this is exactly what will happen. Let’s be clear Obama has already said he wants government run health care. His first choice to head the Health and Human Services Department was Tom Daschle. For those of you who don’t understand why government run health care is a bad thing look at USPS and the national debt. Go online and do a little research about USPS and see when the last time they made a profit or broke even at the end of the year, then look at the national debt. If USPS cannot turn a profit social security isn’t even close to breaking even and we are spending trillions of dollars we don’t have, how on earth will we pay for health care? The United States government cannot turn a profit. It is almost impossible. The only exception I have ever found is the US Mint and I don’t want to place all of our lives on the hope that health care is run as well as the US Mint.

One last point I would like to leave you with is unfortunately not from me but serves the point none the less “If government could stop economic recessions by simply spending money and going into debt, no country would ever experience recession. Yet it happens all the time. Take a look at Japan's lost decade.” –Unknown. It is my belief the United States is in for a long tough road.