RTCS

Views on the News

February 7, 2009

 

Views on the News:          

If Obama was serious about the need for a bipartisan bill he would start the discussion after stripping out the 90% of the existing bill that is pork spending and start with only the remaining 10% that actually might stimulate economic growth and/or create permanent private sector jobs.  No Republican voted for the House Stimulus bill because they want nothing to do with a bill that is a Democrat “Christmas tree” of pork spending and is the “Audacity of Hype!”  Very few people are left in Washington, D.C. who believe the "stimulus" bill is anything like a genuine stimulus bill.  People aren't debating whether or not it will work to quickly inject energy into the lethargic economy because they know it won't.  People aren't debating the priority of the public works the bill proposes, because there are very, very few public works proposed.  Most Americans want Congress to either reject the economic stimulus package now before Congress or make “major changes” to the plan, a new Gallup/USA Today poll discloses.  Only 38% favor the existing package, 37% want major changes in the plan, and 17% reject the plan outright.  In order to do “major changes” a majority of this bill must be scrapped as overreach and ineffective addressing the economic issues at hand.  Only 10% of respondents think the economy will improve this year as a result of the stimulus plan, and 53% think the plan will have no effect on their families or make their financial situations worse.  One man's bipartisanship is another's capitulation, which is why Republicans must resist compromising their principles by supporting President Obama's so-called stimulus package.  Senate Republicans drafted their own stimulus bill with much different priorities than House Democrats had spelled out: $114 billion on infrastructure projects; $138 billion to extend unemployment benefits; $31 billion to help alleviate the housing crisis, and the majority - $430 billion for tax rate cuts.  Senators must reject this Democrat pork spending bill before it converts the world's greatest engine of free market prosperity into a socialistic leviathan under the euphemistic cover of possibly successive rescue "stimulus" bills.  A better alternative, but one with almost no possibility of happening, would be to strip down the Democrat plan into a emergency stimulus plan that is targeted, timely, and temporary and then have hearings an debate on all the superfluous spending appended on the current bill.  No amount of marketing or perfume can disguise this Democrat pork spending bill as anything other the pig that it is!

 

Economists and pundits are beginning to sound alarms that the U.S. economy is perilously close to a “tipping point,” where so many voters will be on the public payroll it will be politically impossible to rein in entitlement programs.  The trillion-plus Obama stimulus program, they warn, could push the economy over the brink.  Already, 40% of Americans don’t pay taxes.  Putting millions more workers on the entitlement roles, either through universal health insurance or the expanded SCHIP health program, will further diminish support for future free-market reforms to make the U.S., economy more competitive, conservative economists warn.  The Congressional Budget Office (CBO) estimates the recent expansion of SCHIP, which will now cover families earning up to $65,000 per year, will induce 2.4 million people to drop their private insurance coverage and hop on the government insurance roles.  The CBO also estimates that the stimulus money for Medicaid will bring 1.2 million more persons under the Medicaid umbrella this year.  Democratic “stealth care” will also pay 65% of COBRA premiums for seven million Americans.  Democrats may move 10 million more Americans under the federal health umbrella.  Free-market economists point to failed welfare-state experiments in England, France, and Germany, and now openly say America could be headed down the same rocky road.

 

Angry liberals need someone to demonize to focus their venom which resulted in the Bush Derangement Syndrome during the last administration, so Obama is now trying to pick a fight with Rush Limbaugh to distract voters from critical analysis of his flawed “stimulus” pork spending bill.  The Obamites are constantly blaming market excesses, greed and Wall Street for our financial problems, when most of the blame lies with politicians themselves?  Why do you think they trash talk the economy every day, when they know that such pessimism from "on high" will cause real economic damage, considering that much of the spending downturn is related to a crisis in consumer confidence?  The answer is that they need Americans in panic mode - the only mindset likely to divorce us from our ordinary walking-around sense and make us receptive to the big-government remedies they're salivating to employ.  President Barack Obama acknowledged Monday that the fate of his re-election four years from now likely rests on the success of the proposed $825 billion pork spending package.  Poll results reflect Obama approval as low as 55% and disapproval as high as 36%, and as the economy tanks those numbers will get worse and worse.  These poll results also “Direction of Country” being wrong as high as 65% and right as low as 27%.  Obama is off to a terrible start naming a succession of people who are incapable of paying their taxes on time or unable to exist except in government or lobbying to government.  This trend of flawed Democrats includes multiple Cabinet nominees, multiple high level government bureaucrats, and Executive branch appointees.  By deifying Obama, his cult followers in the media and grass roots stoked his already exaggerated sense of self-confidence and encouraged him to unmask his true liberalism and unleash his paternalistic mischief full-bore.  First, there was his in-your-face executive fiat reinstituting America's support for foreign agencies performing abortion and then his proactive endorsement of the militant homosexual agenda.  Then his edict on automobile emissions standards.  Next, his stunningly hypocritical support for nominees manifestly guilty of wrongdoing and his self-serving exemptions for appointees from rules he has promulgated.  These were followed by the outrageously inappropriate programs Obama and his congressional colleagues tried to sneak through under cover of the sheer volume and complexity of their budget-busting pseudo-stimulus package.  What I think we are witnessing is “buyer’s remorse” by voters who are seeing Obama for the first time as what he is, and are rejecting his liberal, big government spending package!

 

Polls consistently show that Republicans think the party has drifted too far to the left.  Rush Limbaugh has become the thought leader and the de-facto leader of the conservative movement which makes up a majority of the Republican Party.  In a Rasmussen Reports survey a majority said Sarah Palin should serve as a future model.  The Republican Party must reconnect with the conservative movement:

·    Re-learn the core principles of conservatism.

·    Build a new Republican platform of ideas and language built on a foundation of conservative solutions.

·    Nurture the grassroots, shoring up ties with existing coalitions and leading thinkers, and creating new infrastructure to meet the challenges of politicking in a new century.

·    Remind Americans on a daily basis that Democrats want to play politics and centralize power, raise taxes, cut defense spending, and undermine traditional values.

·    Educate every American on conservative solutions that work.

·    Remain unified and disciplined.

·    Reclaim the American lexicon and re-emphasize responsibility, self-determination, and hard work.

·    Broaden the appeal acknowledging and embracing the demographics in our country.

Michael Steele, being elected Chairman of the Republican National Committee will lead a new stable of emerging Republican thought leaders: Kevin McCarthy (R-Calif.); Paul Ryan (R-Wis.); Mike Pence (R-Ind.); Shelly Moore Capito (R-W.Va.); Duncan Hunter (R-Calif.); and Tom Rooney (R-Fla.).  Remember every time Obama succeeds in passing legislation, Republicans must begin planning to undo the harm done to the country from their legislation the next time Republicans are in power.

 

President Obama and his confidants view this "crisis" with eager anticipation as an opportunity to actualize their dreams for government to assume its rightful place as Master of the Universe and choreograph the economy on a super-macro level.  As a nation, we got into this mess by spending and investing money that didn't exist. We won't get out of it by doing more of the same.  Even the bipartisan Congressional Budget Office has revealed Obama's bill is largely not stimulative.  It's more accurate to describe it as a grandiose slush fund for his preferred projects, support groups and constituencies on the spending side and a massive redistribution of income on the tax side.  Roosevelt the economist is unworthy of emulation, since his own great stimulus package, the National Industrial Recovery Act, failed abysmally.  The second goal of the New Deal was to stimulate the private sector, but instead, it supplanted it and evolved into a lethal combo of spending and retribution elongating the duration of the Depression making it Great.  Roosevelt, too, proceeded boldly on infrastructure. The budget of his Public Works Administration was so large that it shocked even the man who ran it, Interior Secretary Harold Ickes. Sounding a bit like Republicans today, Ickes said of his $3.3 billion allowance: "It helped me to estimate its size by figuring that if we had it all in currency and should load it into trucks, we could set out with it from Washington for the Pacific Coast, shovel off one million dollars at every milepost and still have enough left to build a fleet of battleships."  New Deal public-works spending did have a short-term effect, creating jobs and economic activity during Roosevelt's first term, but many of the jobs that the early New Deal produced were not merely temporary but also limited in economic value.  The U.S. economy has been driving straight down the tracks of past severe financial crises according to a variety of standard macroeconomic indicators in a study for the National Bureau of Economic Research (NBER).  Negative growth episodes typically subside in just under two years.  If one accepts the NBER's judgment that the recession began in December 2007, then the U.S. economy should stop contracting toward the end of 2009.  Of course, if one dates the start of the real recession from September 2008, as many on Wall Street do, the case for an end in 2009 is less compelling.  The legacy of high government debt is yet another reason why the current crisis could mean stunted U.S. growth for at least five to seven more years.  The stimulus bill has failed. Barack Obama has failed. The Trojan Horse of Hope and Change crashed into the guardrail of reality, revealing an army of ideologues and activists inside.  The stimulus bill is a bridge too far, an overplayed hand, ten pounds of manure in a five-pound bag. The legislation’s primary duty was never to stimulate the economy, but to stimulate the growth of government, the scope of the state.

 

The frightening thing is that many of the same intellectually and (alleged) financially corrupt politicians such as Congressman Barney Frank and Senator Chris Dodd, whose actions directly helped bring on the present crisis, have now been put in charge of the hen house and are tasked with "making reforms."  Rather than acknowledge that their earlier poorly thought out "reforms" caused many of the current problems, they and the so-called "Group of 30" financial experts advocate expanding destructive bank regulation to healthy parts of the financial industry.  Those who are incapable of thinking through the consequences of their actions (like drunken teenagers with car keys) are likely to make matters worse rather than better, which characterizes all too many of the Washington elite - at the Fed, the Treasury, the Securities and Exchange Commission and particularly the Congress.  It was they who created and then failed to supervise and provide adequate capital requirements for Freddie Mac and Fannie Mae.  It was the members of Congress who, by not thinking through the consequences of their Community Reinvestment Act, forced banks to make loans to unqualified buyers.  It was they who created the notorious Sarbanes-Oxley Act, a poorly thought out response to the Enron scandal.  This act has driven accounting costs for businesses through the roof, destroying many hundreds of thousands of jobs in the process, forced companies to go private and driven the important initial public offering (IPO) market to London.  Last week the House of Representatives passed a "stimulus" bill that in actuality will slow the recovery and restoration of jobs.  There is a "buy America" protectionist provision in the bill, which thoughtful and knowledgeable people understand will raise costs and destroy more jobs than it will create and invite destructive retaliation from foreign competitors.  These members of Congress have shown themselves incapable of thinking through the ultimate consequences of their proposals, which include: making U.S. business less able to compete with foreign competitors that have lower tax burdens, reducing employment growth both in the United States and worldwide by increasing the cost of capital and its proper allocation, and undermining relations with many peaceful countries.  The current rush to regulate, without calmly and adequately thinking through the full ramifications and likely costs associated with each new regulatory proposal, is likely to end in another round of financial disasters.

 

The so called “American Recovery and Reinvestment Plan” is a deceptive phrase to describe the largest federal spending bill in history, labeled a “fiscal stimulus,” which would dramatically increase the federal deficit, already estimated at $1.2 trillion for this fiscal year.  As Congress has added to the stimulus package, members have become ever more elastic in defining various kinds of spending and tax programs as GDP-boosting and jobs-creating.  Unfortunately history tells us that more government spending is correlated with higher levels of unemployment and the more resources the government usurps from the private sector, the less job creation occurs.  Less than 10% of the bill could be considered true stimulus, if one assumes tax credits and infrastructure spending will jolt the economy.   The other 90% of the bill represents one of the most egregious acts of generational theft in our nation's history, with taxpayer money going to special-interest earmarks, an ill-conceived bailout to states, and permanent spending increases that expand government's reach in areas like health care and education.  Obama himself predicted trillion dollar deficits “for years to come,” at a time when $8 trillion has already been spent by federal authorities on various bailouts of the U.S. economy.  The closer we look at this Democrat spending bill spreading the pork, the only thing that grows is the size of government, and the less we like what we see:

·    Department Of Agriculture - $44 million for Agriculture Buildings and Facilities and Rental Payments; $209 million for Agricultural Research Service Buildings and Facilities; $245 million for Farm Service Agency Salaries and Expenses; $350 million for Natural Resources Conservation Service Watershed and Flood Prevention Operations; $50 million for Watershed Rehabilitation Program; $5.8 billion for Rural Development Programs, Rural Community Advancement Program; $22.1 billion for Rural Housing Service, Rural Housing Insurance Fund Program Account; $2.8 billion for Rural Utilities Service, Distance Learning, Telemedicine, and Broadband Program; $100 million for Special Supplemental Nutrition Program for Women, Infants, and Children; $150 millihon for Emergency Food Assistance Program; $300 million for Administrative Expenses; $650 million for Forest Service, Capital Improvement and Maintenance; $840 million for Wildland Fire Management.

·    Department Of Commerce - $250 million for Economic Development Administration, Economic Development Assistance Program; $1 billion for Bureau of the Census, Periodic Censuses and Programs; $350 million for National Telecommunications and Information Administration, Salaries and Expenses; $2.8 billion for Wireless and Broadband Deployment Grant Programs; $650 million for Digital-To-Analog Converter Box Program; $100 million for National Institute of Standards and Technology Scientific and Technical Research and Services; $100 million for Industrial Technology Services; $300 million for Construction of Research Facilities; $400 million for National Oceanic and Atmospheric Administration, Operations, Research and Facilities; $600 million for Procurement, Acquisition and Construction.

·    Department Of Justice (DoJ) - $3 billion for State and Local Law Enforcement Assistance; $1 billion for Community Oriented Policing Services.

·    National Aeronautics and Space Administration (NASA) - $400 million for Science (not less than $250 million "shall be solely for accelerating the development of the tier 1 set of Earth science climate research missions).

·    National Science Foundation - $2.5 billion for Research and Related Activities.

·    Department Of Defense - $4.5 billion for Facility Infrastructure Investments; $3.8 billion for Military Construction; $350 million for Energy Research and Development; $920 million for Military Construction, Army; $350illion for Military Construction, Navy & Marine Corps; $260 million for Military Construction, Air Force; $3.8 billion for Military Construction, Defense-Wide; $140 million for Military Construction, Army National Guard; $70 million for Military Construction, Air National Guard; $100 million for Military Construction, Army Reserve; $30 million for Military Construction, Navy Reserve; $60 million for Military Construction, Air Force Reserve; $300 million for Department of Defense Base Closure Account 1990.

·    Department Of Veterans Affairs (VA) - $950 million for Veterans Health Administration, Medical Facilities; $50 million for National Cemetery Administration

·    Energy And Water - $2 billion for Army Corps of Engineers; $250 million for Mississippi River and Tributaries; $2.2 billion for Operation and Maintenance.

·    Department Of Energy - $18.5 billion for Energy Efficiency and Renewable Energy; $1 billion for Advanced Battery Loan Guarantee Program; $8 billion for Innovative Technology Loan Guarantee Program; $2.4 billion for Fossil Energy; $2 billion for Science.

·    Environmental And Other Defense Activities - $500 million for Defense Environmental Cleanup.

·    Borrowing Authorities - $3,3 billion for Western Area Power Administration; $3.3 billion for Bonneville Power Administration.

·    General Services Administration - $7.7 billion for Federal Buildings Fund; $600 million for Energy Efficient Federal Motor Vehicle Fleet Procurement.

·    Small Business Administration - $426 million for Business Loans Program Account.

·    Department Of Homeland Security - $100 million for U.S. Customs and Border Protection; $150 million for Repair and Construct Inspections Facilities; $500 million for Aviation Security; $150 million for Coast Guard; $200 million for FEMA, Emergency Food & Shelter.

·    Department Of The Interior - $500 million for Bureau of Reclamation, Water and Related Resources; $325 million for Bureau of Land Management, Construction; $300 million for U.S. Fish and Wildlife Construction; $1.7 billion for National Park Service Construction; $200 million for National Mall Revitalization Fund; $100 million for National Park Service Centennial Challenge; $200 million for U.S. Geological Survey for Surveys, Investigations and Research; $500 million for Bureau of Indian Affairs, Construction; $800 million for Environmental Protection Agency (EPA), Hazardous Substance Superfund; $200 million for EPA, Leaking Underground Storage Tank Trust Fund Program; $8.4 billion State and Tribal Assistance Grants.

·    Department Of Health And Human Services (HSS) - $550 million for Indian Health Service; $2.2 billion for Health Resources and Services; $462 million for Centers for Disease Control and Prevention, Disease Control, Research and Training; $1.5 billion for National Institutes of Health (NIH), National Center for Research Resources; $1.5 billion for NIH, Office of the Director; $500 million for NIH, Buildings & Facilities; $700 million for Agency for Healthcare Research and Quality; $400 million for Discretionary Funds, Secretary of HHS; $1 billion for Administration for Children and Families, Low-Income Home Energy Assistance; $2 billion for Payments to States for the Child Care and Development Block Grant; $3.2 billion for Children and Families Services Program; $200 million for Administration on Aging, Aging Services Programs; $2 billion for Office of the National Coordinator for Health Information Technology; $900 million for Public Health & Social Services Emergency Fund; $3 billion for HHS Prevention and Wellness Fund.

·    Department Of Education - $13 billion for Education for the Disadvantaged; $100 million for Impact Aid; $1 billion for School Improvement Program; $200 million for Innovation and Improvement; $13 billion for Special Education; $16.1 billion for Student Financial Assistance; $50 million for Student Aid Administration; $100 million for Higher Education; $250 million for Institute of Education Sciences; $14 billion for School Modernization, Renovation, and Repair; $6 billion for Higher Education Modernization, Renovation, and Repair; $79 billion for State Fiscal Stabilization Fund.

·    Corporation For National And Community Service - $160 million for Operating Expenses; $40 million for National Service Trust.

·    Social Security Administration - $900 million for Limitation on Administrative Expenses.

·    Smithsonian Institute - $150 million for Facilities Capital.

·    National Foundation for The Arts And The Humanities - $50 million for National Endowment for the Arts.

·    Department Of Labor - $4 billion for Employment and Training Administration; $120 million for Community Service Employment For Older Americans; $500 million for State Unemployment Insurance and Employment Service Operations; $80 million for Departmental Management; $300 million for Office of the Job Corps.

·    Department Of State - $276 million for Administration of Foreign Affairs, Capital Investment Fund; $224 million for International Boundary and Water Commission, U.S. and Mexico, Construction.

·    Department Of Transportation - $3 billion for Federal Aviation Administration, Grants-in-Aid for Airports; $30 billion for Federal Highway Administration, Highway Infrastructure Investment; $300 million for Federal Railroad Administration, Capital Assistance for Intercity Passenger Rail Service; $800 million for Capital and Debt Service Grant to the Railroad Passenger Corporation; $6 billion for Federal Transit Administration, Transit Capital Assistance; $2 billion for Fixed Guideway Infrastructure Investment; $1 billion for Grants at the discretion of the Secretary of Transportation.

·    Department Of Housing & Urban Development - $5 billion for Public & Indian Housing, Public Housing Capital Fund; $2.5 billion for Elderly, Disabled, and Section 8 Assisted Housing, Energy Retrofit; $500 million for Native American Housing Block Grants; $1 billion for Community Planning & Development, Community Development Fund; $4.2 billion for Neighborhood Stabilization Activities (ACORN); $1.5 billion for Home Investment Partnerships Program; $10 million for Self-Help & Assisted Homeownership Opportunity Program; $1.5 billion for Homeless Assistance Grants; $100 million for Office of Healthy Homes and Lead Hazard Control, Lead Hazard Reduction.

One of the more egregious provisions in the Senate bill is a $166 billion bailout plan for the states that rewards bad budgeting at the state level.  In barring foreign steel from infrastructure projects and forcing payment of "prevailing wages," the stimulus bill merges the Depression era Davis-Bacon and Smoot-Hawley acts in a way that could be a recipe for depression.  One of the most significant mistakes of the 1930s is when the U.S. embraced protectionism, with a cascading effect that ground world trade almost to a halt and turned a one-year recession into the Great Depression.  Meanwhile the Office of Management and Budget has ordered a 10% cut in defense spending for the coming fiscal year, giving Defense Secretary Gates a substantially smaller budget than he requested.  Meanwhile Speaker Nancy Pelosi (D-Calif.) released the details of the expected $500 billion proposed omnibus appropriations legislation encompassing the nine remaining spending bills for fiscal year 2009.  This Omnibus Spending Bill is entirely separate from the $1.2 trillion Democrat “porkulus” bill passed by the House last week with no Republican support.  After the money is spent, rebated and squandered, the economy will slip back into recession, because President Obama's economists don't counsel him to fix what is really broke, the ownership structures and compensation schemes at U.S. banks in the post-Glass-Steagall era, and the huge trade deficit on oil and with China, that sap demand for American-made goods and services and put workers on the unemployment line.

 

If you are sick and tired of government and politics as usual, read my web site with its individual issue analysis and recommendations at: http://www.returntocommonsensesite.com Remember this site is updated every Saturday. Individual issue updates this week include:

 

This Week’s Best Articles:

 

David Coughlin

Hawthorne, NY