February 9, 2009

DOW 8280.59

Ratcheting up the sarcasm, the president said: "So then you get the argument, 'well, this is not a stimulus bill, this is a spending bill.' What do you think a stimulus is?  That's the whole point," he said, as the audience hooted and applauded.

President Obama

February 6, 2009

The President of the United States of America would have us believe that all government spending stimulates the economy.  But, all spending is not equal.  Spending $2500 on a vacation does not have the same economic effect on a family as making an extra mortgage payment.  The vacation is an expense while the extra mortage payment increases the family’s equity.  Likewise, subsidizing health insurance for the unemployed, as this bill does, may be nice but it’s hard to see how it saves or creates a job.  It certainly doesn’t increase the nation’s wealth.  Nor does hundreds of millions spent on Honey Bee Insurance, ATV trails, waterparks in Orlando, neon signs for Las Vegas and snow machines for Minnessota (I’m not making this stuff up).

The President has also said that he rejects the same, old, tired theories and economic policies of the last eight years that have helped create the problem.  The most glaring feature of the fiscal policies of the last eight years is a doubling of the national debt from $5 trillion to $10 trillion.  Yet, this “solution” will accumulate deficits even faster and the national debt will grow even more quickly.  While it is true that we will pass this debt on to our grandchildren, we’ll have to start making the payments now.  

“All animals are equal.  Some animals are more equal than others.”

George Orwell, “Animal Farm”

During the same period that Congress doubled the national debt, state and local governments were not idle.  Spending by state and local governments grew five times faster than the population during this period.  I doubt that anyone can say that their state and local government delivers five times the services or functions five times better than it did eight years ago.  Nonetheless, the President says that unless the Federal government delivers $40,000,000,000 to state and local governments, teachers, firemen and police may have to be laid off and essential services may suffer.  Perhaps.  Or, perhaps we are neatly shifting the cost of bailing out California to Kansas or just buying votes for Democrats?  When did we vote to create a protected class of government employees that we must hold harmless from economic hardship while the taxpayers remain subject to loss of income, unemployment and foreclosure?  This seems to run counter to the idea that “…everyone will have to make sacrafices and have “skin in the game.”

"We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong ... somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises ... I say after eight years of this Administration we have just as much unemployment as when we started ... And an enormous debt to boot!"

Henry Morganthau, Secretary of the Treasury

May 1939

John Maynard Keynes was a British economist who’s “General Theory of Employment, Money and Interest” delighted politicians around the world.  For the first time they were given license to spend money they didn’t have.  The Great Depression and Keynes theory gave “Progressives”, as they were known in the 1930’s and again today, the justification for grand social experiments and sweeping public works projects that they promised would provide jobs, end scarcity and create prosperity.  Nowhere, at no time has this theory been proved.  Indeed, actual experience has proved otherwise.  What we know from our own experience is that prosperity is followed by higher taxes and government interference in markets, followed by recession averaging 18 months, then recovery.  We know that tax cuts fueled the prosperity of the 1920’s, that tax cuts fueled the prosperity of the 1960’s and that the tax cuts after the 1982 recession (when unemployment reached more than 10 percent) resulted in 25 years of economic growth.  This bill will fail and its failure will be used, as all government failures are, to justify the next $1 trillion in spending and the $1 trillion after that.

The only thing about “The Raw Deal” that challenges the imagination is the amount of money it spends.  One marked feature of this plan is the poverty of the ideas it contains.  We will spend $1 trillion dollars but we will not get the grandeur of the Boulder Dam, the sweep of the TVA or the majesty of the Golden Gate Bridge.  Instead we get smoking cessation, contraceptives and “community stabilization” programs and ACORN will be collecting fees to insulate homes on the south side of Chicago.  It is as if, being unable to find enough rusty bridges and cracked pavement, the bill has been deliberately bulked up for the sole purpose of distracting attention from the permanent social change it will make.  For the first time taxpayers in the United States of America will be a 40% minority and the foundations for socialized medicine will be laid. 

The Recovery and Reinvestment Act is not an economic program or a jobs program, it is a Trojan horse.

It is a Trojan horse we don’t have to accept.  After the Senate approves it, the House and Senate must reconcile the bill and then both must pass it.  As its provisions are revealed, public support for this bill is dropping like a stone.  The President has tried to avoid investing his own political capital in this dreadful bill but Republican opposition has forced him to come out of hiding and campaign for the bill.  This may boost support temporarily.  This is why Americans are being exposed to fear tactics in a bum’s rush to pass the bill without real consideration.  Failing to pass this bill will not result in calamity.  Passage will.

Call your Representative, call your Senators.  Keep calling.  Urge them to vote NO!