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Bailout Mania

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Judd Gregg: The budget of the President spends too much, taxes too much, and borrows too much.”

Judd Gregg

US Senator Judd Gregg (R-NH)

Regular readers know that from time to time, we have been quite critical of Senator Judd Gregg’s performance both as a Republican and as a supposed conservative. We’re happy to note that in the short time since his flirtation with the Magic Obama, the Senator has regained his footing and has been as strong in his criticism of the proposed taxpayer-busting budget as anyone. This week, our senior Senator provided the Republican weekly radio address and provided some much-needed detail and words of caution regarding the Magic Obama’s budget. I appreciate this, and would further add that, given Gregg’s attempts at bipartisan cooperation with the Democrat-led Executive Branch, he has a degree of credibility on these fiscal issues that cannot be tagged simply as partisan rhetoric…

GREGG: Hello, I’m Judd Gregg , Senator from New Hampshire. We all know these are difficult times. People are worried about keeping their jobs, paying their bills, the value of their homes and the cost of sending their kids to college. It’s hard.

Thus I appreciate, as do all Americans, the efforts being made by our President and his seriousness about addressing these issues.

But what concerns many of us are his proposals in the budget he recently sent to the Congress that dramatically grow the size and cost of government and move it to the left.

It is our opinion that this plan spends too much, taxes too much and borrows too much.

You may have heard this before that the budget of the President spends too much, taxes too much and borrows too much.

What do we mean? Well, let me give you a few examples.

 

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Yeah…What he said!

British MEP Daniel Hannan delivers a message to British PM Brown. Would that America had such politicians willing to "speak truth to power…" "You cannot spend youur way out of recession or borrow your way out of debt." "You sound like a Brezhnev-era apparatchik giving the party line."      

Sarah Barracuda: “We can’t accept the bait”

Posted below is a Youtube of the full statement by Alaska Governor Sarah Palin as she turned down approximately half of the so-called "stimulus" funds being offered by Washington. While perhaps you might think she should turn it ALL down (like me), she does explain herself well, and poses the questions we should all be asking. The … Read more

AJS to Geithner & Dodd: Go!

In a formal statement released yesterday, our friends at Americans for Job Security (AJS) called on the two main architects of the disaster that is the current economic policy of our government to do the right thing. At the same time, they are inviting online visitors to view two ads they have prepared to  run nationally … Read more

“We’re on a road to nowhere, come on inside…”

After reading the lead story in yesterday’s Laconia Daily Sun (pdf) about the latest bailout/stimulus/recovery monies headed for the Lakes Region, I couldn’t help but recall one of my favorite Talking Heads tunes, “Road to Nowhere” from the “Little Creatures” album:

“WELL WE KNOW WHERE WE’RE GOIN’
BUT WE DON’T KNOW WHERE WE’VE BEEN
AND WE KNOW WHAT WE’RE KNOWIN’
BUT WE CAN’T SAY WHAT WE’VE SEEN
AND WE’RE NOT LITTLE CHILDREN
AND WE KNOW WHAT WE WANT
AND THE FUTURE IS CERTAIN
GIVE US TIME TO WORK IT OUT…
We’re on a road to nowhere
Come on inside
Takin’ that ride to nowhere
We’ll take that ride; I’m feelin’ okay this mornin’
And you know, We’re on the road to paradise
Here we go, here we go!”

And indeed, here we go… down the road of fiscal ruin and the ongoing plundering of the very citizens the politicians claim to want to protect so dearly.

It all starts with the gas tax and its main purpose, which is to fund our state’s roads, bridges, and highways, with some allocated to local communities for the same items. In many instances, matching and/or majority funds are given for things like bridges and traffic signaling devices. A healthy infrastructure throughout the entire state benefits everybody, and the users—those who operate motor vehicles—are the ones that pay via the tax on gas or fuel paid at the pump. I have never advocated any permanent elimination of this federal (although I did support the moratorium when prices eclipsed four bucks a gallon) or state tax, and, if operated properly, I don’t mind paying tolls to drive on certain highways. The reason is because the collecting of gas taxs and the highway tolls is technically a “user pays” system, whereby those that use roads and bridges—the motoring public—are the ones paying for them. Of course, what skews this system is when the politicians, bureaucrats, and the busybodies get their hands on the monies collected for roads and infrastructure… and then stretch the definition of such items. Thus, the users feeding into this system end up getting stiffed out of the maximum return for the fees they are paying.

We all now know that the NHDOT is running short on funds, and, in addition to recent and upcoming toll hikes, they are about to receive monies from an increased gas tax ultimately totaling fifteen cents– unless Governor Lynch vetoes the plan.

 

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“Excessive government spending will not bolster the economy”

March 11th, 2009, Fairfax, VA—Americans For Limited Government (ALG) today released an exclusive video interview with Republican Congressman Michael Burgess, M.D. (TX-CD26). Topics ranged from healthcare reform and the economic crisis to the commuter rail lines in Texas. Congressman Burgess also proposed tax cuts as a remedy for the nation’s economic woes. “[W]e’ve seen this … Read more

Feds funding COBRAs. No, Carroll Shelby’s NOT in on the automakers’ bailout…

I got an email this week from the person that handles some of the benefit package offered by our company regarding changes to employee health insurance thanks to the recently passed bailout stimulus recovery law. Now if you’re like me, you’re probably wondering what health insurance has to do with economic recovery. Well, apparently, plenty. What’s also incredible is the fact that, despite the bill having been debated and discussed by Congress, nearly a month since its passage, people are STILL analyzing it to gauge its full meaning and what it requires. Of course, the fact that the federal government is going to basically go on the hook for 65 percent of the premium costs for every laid-off employee eligible to recieive health insurance continuation (COBRA) benefits is also of note as well.

Ray has given me permission to share this information with ‘Grok readers. I am including the email as written so that you can get the flavor of what just one little facet of a 1,000 page law can do. Can you imagine what all these "little" pieces must add up to in manhours and costs of analysis, forms creation, communication, and administration? What if all such manhours had been spent on something actually PRODUCTIVE instead of simply trying to comply with the law?

To My Valued Clients,

I am sending this e-mail to you, to discuss briefly what I know about the recent law changes that affect your group insurance. On February 17, 2009, President Obama signed the American Recovery and Reinvestment Act (ARRA).  The law, in its final form, exceeds 1,000 pages length. Part of the law provides a subsidy for COBRA benefits.

COBRA Subsidy

Eligible workers will receive a 65% subsidy toward their COBRA continuation premium for up to 9 months.  The subsidy will begin March 1st and will be administered by the Treasury Department as a credit against payroll taxes.  The subsidy will terminate the date the individual becomes eligible for any new employer-sponsored health care coverage or Medicare.  The subsidy is also available for state provided comparable continuation coverage.

Eligible Individuals

An assistance eligible individual must meet the following qualifications:

 

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Watch the Magic Obama as he pulls an economic “fix” out of his hat…

Magic Obama

The FreeDictionary.com defines the word “bailout” as “a rescue from financial difficulties.” That was the term used to describe the initial government action and spending that occurred while Bush was still in office. We were told at the time that the $750 billion raised and appropriated by Congress at the behest of the President and his folks at the Treasury was to prime the pump so that cash-strapped banks and other institutions could begin lending again—entities deemed by the government “too big to fail.” And of course, it seemed plausible—and I only use that word with reservation—that because many of the lending institutions were in a jam due to failed mortgages and other similar loans (otherwise known as “toxic assets”) mostly due to government rules and regulations as dictated through Fannie Mae and Freddie Mac, they (the government) help clean up the mess. Of course, when the government gives out money, it comes from you and me.

And once the financial industry got their hands on this “bailout” money, other industries—most noticeably the automobile industry—decided to follow suit and came calling with outstretched hand looking for some, too. A business model based upon endless credit to keep production going to pay for expenses incurred previously and no cushion to fall back on, coupled with labor unions unwilling to give the slightest concession, is nothing more than the proverbial “sword of Damocles,” ready to drop at the first wrinkle. In this case, when the credit markets dried up, so did auto sales, as many people suddenly lost the ability to borrow because there was no money left to lend. At this point, we know that a “small” amount “bailout” funds have been funneled to the automakers, but we still hear that several are on the brink and in need of much more. The question is whether more money will really help fix the problem, or simply perpetuate systemic problems for another day? The same question applies to the financial institutions noted above.

As we moved down the road from the Bush Administration to the Obama Administration, it appeared that the word and notion of a “bailout” lost its luster. Time for a new word… The FreeDictionary.com defines “stimulus” as “something that acts as an incentive to (someone).” As you all know, following the bailout came the “stimulus” with a promise to “jump start” the economy. I guess it only seemed right—if “priming the pump” didn’t work, a “jump start” would come next. Of course, what came next was the stock market continued to tank and peoples’ money continued to evaporate—along with even more jobs. It seemed that the only good thing about “stimulus” was that it made for good fodder for jokes.

“Yo, Doug, feelin’ ‘stimulated’ today?” Of course the answer is, “Not really. But I AM getting bleeped…”

Uh-oh– Time for ANOTHER new word… and fast! Enter the term “recovery.” Ah yes, a much more positive word. Maybe this will be the one that gets the job done for Team Obama as they seek to “fix” the economy. Again, let us turn to the FreeDictionary.com, which defines “recovery” as “the regaining of something lost.” How perfect. As the government continues to dole out our children’s grandchildren’s great grandchildren’s money hand over fist, it can now claim to do so all in the name of going back to the way things were. Or something like that…

 

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Tea Party in DC

This is a video from one of the "Tea Parties" held yesterday– this particular one in DC. One of the speakers is Deroy Murdoch, who has some very good to say about the use of incentives to help fix the economy & create jobs. The vid runs some 19 minutes, but is indeed very exciting … Read more

Depends on the definition of “stimulus”…

A nice load of "plums" for the educrats that helped elect him… This is a press release just in from the White House media team. Does this plan for education (laughably part of the American Recovery and Reinvestment Act, AKA "stimulus") sound like it will do anything to help the economy… other than that of … Read more

In depth analysis and some quick reaction to Obama’s big night

The National Journal Online has an interesting interactive feature analyzing the full text of Obama’s speech to Congress using a mixture of bloggers, pundits, members of Congress, and a descriptive note about each applause (only Democrats stood, both Democrats AND Republicans, etc.). Readers can click higlighted sections for reactions based on accuracy, campaign promises kept (or … Read more

Guest Post: An open letter to the Congress and President of the United States

by Edwin J. Feulner, Ph.D. For the last 35 years, educators and analysts at The Heritage Foundation have been intimately involved in the nation’s great public policy debates. In all that time, we have never encountered legislation with such far-reaching and revolutionary policy implications as the American Recovery and Reinvestment Act currently before Congress. And … Read more

“Poverty is good for the soul…”

Guest Post by Bill Asbell The Baby Boomers Strike Again to Inflict perhaps the Death blow on U.S. Capitalism Once and for All. No doubt, William Ayers, Abbie Hoffman, Noam Chomsky and Saul Alinsky are all most definitely proud "Americans"…wherever they currenty reside, above or below.   All we endangered rational types ask is to do what … Read more

It’s the fascism, stupid!

Fascist Headquarters, Rome. 1934 While listening to the "Great One" (AKA Mark Levin) tonight over the livestream, he read a Pajamas Media piece by Michael Ledeen who dares use the "F" word to describe the road we have embarked upon: Fascism. Reacting to a Newsweek article claiming "We’re All Socialists Now," Ledeen writes that’s not socialism.  … Read more

A view on the economy from an ordinary guy in central NH…

 

Please note that while I don’t claim to be an economist, I have enough of an understanding of basic economic theory to know that we face some clear dangers if we are not careful.

It is easy to see on the one hand that things in certain sectors seem pretty much unchanged. Some businesses appear to be functioning at or near normal levels, while others, less so. Many folks believe that after a period of time, things will bounce back the way they usually do. This leads to, for most I’d bet, token belt-tightening. “Sure, things are tough,” they say, “but not for me. I’ll cut back a little and wait and see what happens.” Believe me, I hope that this is indeed the case—that we’re simply in a wrinkle that will soon iron itself out.

But on the other hand, what happens if, despite the relative health of those businesses with plenty of work and people that still have money, other forces come together to destroy even that? Then what?

I maintain that a good chunk of the current economic drawdown and cutbacks is nothing more than the natural cycle of the marketplace, with ups and downs being the so-called correcting factors that ultimately keep things in balance. What seems to have made things different in this latest go-around, however, is that it was greatly exacerbated by too much credit issued that in another time would have been denied. People were buying stuff—lots of it, including cars and houses—on credit that they should have never been given, because they could never realistically pay it back. And now, banks and other lending institutions are left holding the proverbial bag.

While nobody decried the good times as they lasted, the market was producing an excess of goods and houses that created a “bubble” that expanded far and above the norm. The natural result was that the economy of nearly the whole world ended up growing to fill it, and, when the end came, well, we’ve seen the results with the further cutting of manufacturing jobs, joined in full force by the former denizens of the overheated construction industry. There is much truth to the old adage, “what goes up, must come down.” I have always believed that—perhaps it’s the cynic in me, but I’ve yet to really see it otherwise. Sadly for those very real people whose lives are affected, this is the normal cycle of life. Thankfully, history further tells us that things must also go up. The big question, then, is how long?

 

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Guest Post: Bailing out the Stimulus Plan

by Bob Bestanii

One would think that in a time of emergency the U.S House of Representatives would do the right thing and craft a stimulus package that puts America first. Instead, it has created one of the most pork laden packages that has ever been voted on in the name of the American people. This comes even after they insisted on $165 billion in earmarked pork before they would approve the TARP bill. In so doing, the Democratic members of the House have demonstrated exactly why Congress has one of the lowest approval ratings of any institution in the country, a mere 9%.

The current financial crisis is real, it is global, it is serious and it is growing. Lower interest rates, the traditional instrument of economic stimulus (monetary policy), tends to take a year and a half to kick in. Yet day by day, the economic crisis is growing and is digging deeper wounds into Main Street. We tend to think about this panic as a financial crisis but the Main Street economy is already in worse shape than the financial markets. Congress is correct in now looking at spending measures and tax cuts (fiscal policy) to aid in the recovery effort. It must be bold and it must be quick about it.

But the cure can’t be worse than the sickness. It must be remembered that with the budget deficit projected to exceed $1.2 trillion, on top of the $10 trillion in debt America is now carrying, every dollar spent is a dollar we must borrow from abroad. If we frivolously spend borrowed money with no assurance of getting it back, we are digging our children into debt that they and their children will have to pay back in the future. What spending we undertake now, must be spending that will pay back dividends to our country and automatically repay the debt we take on. It must be invested in America.

Honey bee insurance subsidies totaling $150 million will not do this; neither will tens of millions for anti-smoking programs, ATV trails, fish passage boundaries, cars for government bureaucrats, remodeling the Commerce Department or numerous other earmarks. In the words of a fiscally conservative Democrat who voted against the House bill, the old bulls of the House are dumping in all of the pork they been waiting years to get passed. So the White House and the Senate are now rushing to save the stimulus package, to bring back a bit of reason into the effort. With any luck, the new version will save the government from the embarrassment that the House has laid at their doorsteps.

 

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