January 2009


Eighty-three billion dollars of the Pelosi-Reid-Obama voter payoff scheme being sold off as “the stimulus package” is tagged for those earned income tax credits…tax refunds to people who didn’t actually pay taxes, but that’s not enough wealth redistribution.

What good is extra cash, if you ain’t got the wheels to go with it?

Enter Dianne Feinstein…d’Artagnan to the Porthos, Athos, and Aramis of Keynesian economics currently screwing the economy for generations to come:

Under a bill introduced by Sen. Dianne Feinstein, D.-Calif., owners of older cars would get vouchers worth thousands of dollars toward the purchase of newer, more fuel-efficient vehicle. — CNN Money

So, here’s the plan…if the bill passes, take about three or four hundred bucks worth of that earned income tax credit check, buy a clunker, wait a few months, and get a voucher (“worth thousands of dollars”) for some new wheels.

And who knows…with the next stimulus package, there may be enough money to get some nice rims!

P.S. I really must apologize to Alexander Dumas for equating this dumbass to his noble fictional character.

Are we ready for the next government-created economic catastrophe?

Inflation and deflation are purely monetary phenomena. Inflation is not just a rise in prices, lots of things can drive prices higher. Inflation is the very specific case of a rise in general price levels driven by an increasing money supply. If the money in an economy grows at a faster rate than the pool of goods and services on which to spend it, general prices are bid higher as a result. Only money creates inflation.

Did you read that last sentence?

Simple economics 101…right?

Check this out:

(Click here for larger image)

Say hello to the next phase in President Obama’s economic plan…hyperinflation.

The main cause of hyperinflation is a massive and rapid increase in the amount of money, which is not supported by growth in the output of goods and services. This results in an imbalance between the supply and demand for the money (including currency and bank deposits), accompanied by a complete loss of confidence in the money, similar to a bank run. Enactment of legal tender laws and price controls to prevent discounting the value of paper money relative to gold, silver, hard currency, or commodities, fails to force acceptance of a paper money which lacks intrinsic value. If the entity responsible for printing a currency promotes excessive money printing, with other factors contributing a reinforcing effect, hyperinflation usually continues. Often the body responsible for printing the currency cannot physically print paper currency faster than the rate at which it is devaluing, thus neutralizing their attempts to stimulate the economy.

CNN reporting today (1/30/2009):

NEW YORK — U.S. stocks sank Friday after a fresh economic body blow that U.S. President Barack Obama called “a disaster” for Americans hit the markets.

New economic data showed the U.S. economy shrank the most in 26 years in the last three months of 2008, with its Gross Domestic Product falling 3.8%.

So what do we have?

The money supply has nearly doubled in less than thirty days, while the GDP experienced the biggest drop in a quarter of a Century.

More money chasing less goods.

Hang on to your seats folks…soon. it’s going to feel like Mexico in 1982
around these parts.

“Never let a serious crisis go to waste. What I mean by that is it’s an opportunity to do things you couldn’t do before.” — Rahm Emmanuel November 2008

President Obama tried some creative misdirection today by attacking Wall Street once again:

President Barack Obama issued a withering critique Thursday of Wall Street corporate behavior, calling it “the height of irresponsibility” for employees to be paid more than $18 billion in bonuses last year while their crumbling financial sector received a bailout from taxpayers.

~~~snip~~~

Obama’s stand also came just one day after he surrounded himself with well-paid chief executives at the White House. He had pulled in those business leaders and hailed them for being on the “front lines in seeing the enormous problems in our economy right now.”

The executives who appeared with Obama are not leaders of the Wall Street financial companies that the president targeted, but rather heads of such well-known manufacturing and technology giants as IBM, Motorola, Xerox and Corning. Still, they get paid handsomely.

Most of those who stood with Obama earned a total 2007 compensation package of between $8 million and $21 million, according to a review by The Associated Press.

Meanwhile, back at economic stimulus HQ, we can find irresponsible excesses that dwarf those Wall Street bonuses.

  • $1 billion for Amtrak, the federal railroad that hasn’t turned a profit in 40 years
  • $2 billion for child-care subsidies
  • $50 million for that great engine of job creation, the National Endowment for the Arts
  • $400 million for global-warming research
  • $2.4 billion for carbon-capture demonstration projects.
  • $8 billion for renewable energy funding
  • $600 million for new cars for government employees in addition to the $3 billion/year government already spend.
  • $7 billion to “modernize” Federal buildings and facilities.
  • $335 million for sexually transmitted disease education

The Wall Street Journal finds some line items in the Obama-Reid-Pelosi stimulus package that rise beyond “height of irresponsibility” levels:

Another “stimulus” secret is that some $252 billion is for income-transfer payments — that is, not investments that arguably help everyone, but cash or benefits to individuals for doing nothing at all. There’s $81 billion for Medicaid, $36 billion for expanded unemployment benefits, $20 billion for food stamps, and $83 billion for the earned income credit for people who don’t pay income tax.

Eighty-three billion dollars will be taken from American workers who paid income taxes, and given to others who did not in what Obama creatively redefined as “tax refunds.”

The Obama-Reid-Pelosi plan is clear now…demonize private institutions (“American taxpayers will never again have to put their money on the line to pay for the greed and irresponsibility of Wall Street.” — Barack Obama, September 2001), and move America closer to socialism.

(T)his bill was written based on the wish list of every living — or dead — Democratic interest group. As Speaker Nancy Pelosi put it, “We won the election. We wrote the bill.” So they did. Republicans should let them take all of the credit.

P.S. Here’s the Boiling Frogs stimulus package…Excessive government spending has never increased economic production in the past, and is not likely to do so in the future, so instead of increasing government spending, make 2009 a tax moratorium year. That puts $2 trillion in the hands of American consumers to spend as they see fit. That will stimulate this economy more than excessive government spending ever has.

Radio Netherlands reporting:

Cuban Foreign Minister Felipe Perez Roque has asked the United States to return the Guantánamo Bay Naval Base to Cuba. Cuba has been asking for the restitution of the territory since former president Fidel Castro seized power in 1959. Guantánamo Bay was taken by US forces during the Spanish-American War in 1898.

US President Barack Obama’s decision to close the Guantánamo Bay prison camp has given Havana new hope. Cuba considers the 1903 Cuban-American Treaty which allows the US to perpetually lease Guantánamo Bay illegal.

While we’re discussing things that should be returned to their rightful owners, we could discuss the 5,911 certified U.S. property claims against Cuba BY US CITIZENS AND US CORPORATIONS totalling in excess of $7 billion 2005 dollars.

Those claims do not include the claims of the millions of Cuban nationals whose properties were “nationalized” by the Castrist regime.

If Cuba wants Gitmo back, make them first pay for the billions of dollars they stole from American citizens and businesses, as well as the properties stolen from the people of Cuba, both there, and abroad.

Then we’ll talk.

Otherwise…

According to The Heritage Fundation, that’s how much the stimulus package will cost each American family.

Many people have trouble picturing such an enormous amount of money. To put it into perspective, $825 billion is worth approximately $10,520 for each family in the United States, or $22,445 for each family with children under the age of 18.

A good friend likened this to the government running up his credit cards; Federal-level identity theft if you may.

According to the 2007 Consumer Expenditure Survey (CES),[2] families with children under 18 spend, on average:

* $2,470 on apparel and services,
* $2,668 on health care,
* $4,402 on food at home, and
* $12,739 on shelter.

Taken together, families with children under 18 spend, on average, $22,279 annually–almost 37 percent of total average annual family spending–on these goods and services. If this group were required to fund the stimulus bill, it would be similar to saddling them with debt equivalent to their budgets for clothing, health care, food, and housing for one year.

So this is $825 billion for Obama’s stimulus, and $700 billion for Bush’s bailout.

That’s $1.5+ trillion dollars in unfunded government spending in less than three months.

Then they’re going to raise taxes by repealing Bush’s tax cuts.

I’m not feeling the “tax cuts for 95% of the people” vibe coming from Obama any more.

P.S. I can’t locate exactly where I read this but it made sense, and if I find it, I’ll give it proper credit..but if uncontrolled government spending was the solution to recession, there would never BE any recessions.

Will Hall at The Baptist Press, had some sharp insight into the nature of the stimulus package being pushed by Obama and Pelosi:

Contrary to how the bill is being described by proponents, only around 3.5 percent (about $30 billion) of the spending proposal is actually tabbed for infrastructure repairs and improvements. The majority of the money is penned to “fund 150 federal programs — 32 brand-new programs, 19 programs which OMB [Office of Management and Budget] has labeled as ineffective or shown no results,” according to Rep. Jeb Hensarling, R-Texas, a member of the House Financial Services Committee, as reported by the Business & Media Institute Jan. 23.

A quick review of the summary released by the House Committee on Appropriations shows the bill includes $6.7 billion to give federal agencies new or renovated buildings with increased energy efficiency and another $6.9 billion for state and local governments to do the same. NASA is due to get $400 million to boost climate change research and NOAA [National Oceanic and Atmospheric Administration] will benefit to the tune of $600 million to buy satellites with sensors which enable climate modeling. On top of that, federal agencies will get $600 million for new vehicles that use alternative fuels.

I guess the Democratic Party pretty much believes in the same old “trickle-down economics” it bashed the Grand Old Party about.

That’s $1 billion for climate research, $14.2 billions for new buildings and vehicles for State and Federal government employees.

Meanwhile, Obama signs laws that will further weaken the already mortally wounded US auto industry:

Fully illustrating ideological addictions to economically counterproductive programs, President Barack H. Obama signed executive orders today that US auto manufactures suggest will destroy their businesses – in short, requiring models be produced in multiple versions to satisfy diverse emission standards in multiple states.

Industry analysts estimate that the new regulations could add anywhere from $2,000 to $10,000 to the price of a vehicle.

The more I read, the more I realize that distributing condoms isn’t a bad thing…considering what this administration is doing to us all.

I was catching up on my reading early this morning, when I ran across Paul Krugman’s latest OpEd in yesterday’s NYT, and I just had to single this little tidbit out:

(W)rite off anyone who asserts that it’s always better to cut taxes than to increase government spending because taxpayers, not bureaucrats, are the best judges of how to spend their money.

Here’s how to think about this argument: it implies that we should shut down the air traffic control system. After all, that system is paid for with fees on air tickets — and surely it would be better to let the flying public keep its money rather than hand it over to government bureaucrats. If that would mean lots of midair collisions, hey, stuff happens.

The point is that nobody really believes that a dollar of tax cuts is always better than a dollar of public spending.

Back later with some thoughts.

I was reading a Reuters story yesterday, when the paragraph below caught my eye:

WASHINGTON (Reuters) – President Barack Obama’s top economic adviser would not rule out on Sunday that more money may be needed to stabilize the U.S. financial system as a deep recession increases banks’ losses.

This brought to mind a magazine story I read some years ago, on the marketing strategies of heroin dealers in the Cabrini-Green development in Chicago’s North side, where the interior walkways were completely fenced off in an attempt at reducing the number of people being thrown to their deaths from the buildings. The magazine spoke about the deadly efficiency of the pusher’s simple marketing scheme: give away the heroin until the individual becomes hooked, then take everything from them as they attempt to feed their ever-increasing need for the drug.

Question…how are heroin and government bailouts similar?

Answer…the more of either that you get, the more you need.

I guess the best description for the Obama plan is “Junkie Economics.”

The Reuters story goes on:

Lawrence Summers, head of the National Economic Council, also said there was no question that tax cuts passed under former President George W. Bush needed to be repealed, though he would not be pinned down on exactly when.

Excuse me?

So, the plan to overcome this recession is to repeal the tax cuts and increase government spending?

The government will borrow more, and the people will have less cash to spend on stuff.

Money Week’s Editor John Stepek piped in on this idea months ago:

You’d think that the message might be getting through by now.

If you spend too much money today, you’ll have to pay for it tomorrow. Or next week. Or next year. But at some point, you will have to pay it back.

This isn’t a moral point, or some sort of puritanical finger-wagging. It’s just the way the system works. People who lend you money tend to want it back at some point in the future. If they’ve been careless with their credit-checking, and you can’t pay it back, then they will lose money, no doubt hurting their creditors in turn.

Consumers are starting to get it. They’re spending less than they did. But the government seems to be having difficulty getting to grips with the concept…

What we DO know is that the government has no money, so they’ll have to borrow money, raise taxes, or both, but Mr. Stepek serves up a dose of reality in his article:

the bigger issue is that the choice between raising taxes and borrowing more money is in fact an illusion. Borrowed money has to be paid back at some point in the future – whether that’s in the standard way, or via an inflationary currency crisis. So all government spending ultimately comes from the taxpayer.

So when and if the private sector returns to health, it immediately faces the prospect of higher taxes or higher inflation to pay for all the government “deficit spending”.

Yes we can…slide into another Great Depression.

BUENOS AIRES (AFP) – The first photos in two months of ailing Cuban former leader Fidel Castro, showing him meeting Argentine President Cristina Kirchner, were released Friday by Kirchner’s office.

The images, the first known pictures of Castro released since November 18 last year, show him standing next to Kirchner. They were handed to the Argentine leader by Cuban officials Thursday night at a dinner in Caracas hosted by Venezuelan leader Hugo Chavez, her office said.

Kirchner was “touched by the gesture and immediately showed the photos to other guests,” according Kirchner’s spokesman Miguel Nunez, quoted by Argentina’s government news agency Telam.

Kirchner, on her first visit to island, said Castro seemed healthy during the half-hour meeting. “We chatted about the international situation,” the Argentine leader told Telam.

Weekend at Fidel's

That looks like one of those pictures you can get for about $15 at Madame Tussauds Wax Museum.

I like the staging…dinner at Chavez, with a bunch of other guests, and the pictures are presented to the Argentine President by Cuban officials, and she immediately shows them to other people.

They could have given her those pictures BEFORE she left Cuba, but it apparently took more time to Photoshop Castro into it properly.

How many hands does the Argentine President have anyway?

Drunken Negro Face Cookies.

Nothing follows.

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