Posted tagged ‘stimulus’

Obama avoids blaim for new unemployment

October 2, 2009

According to the Bureau of Labor Statistics, unemployment has risen to 9.8%, despite Obama’s entire team “working every single day… to accomplish” lower unemployment.

In a speech today, Obama avoided taking blaim or apologizing for the continuously rising unemployment, simply claiming that he’s still working to find new options and giving a little sentiment for those unemployed. Barack Obama attributes the fact that the unemployment rate has  gotten to only 9.8 because of his Keynesian initiatives.

I’m sure that after over eight months in office, the president with all the Congressional majority he needs should have been infinitely capable of saving the economy from the 10 percent figure, which is double what unemployment was just 9 short months ago. The president  needs to be capable of admitting that he made mistakes and that blame must be assessed.

Obama’s great stimulus, originally glorified as quick and effective recovery, is turning out to not be as such. The Real Gross Domestic Product has fallen and there have been no signs of recovery. The Keynesian belief that saving is inherently a flaw in the free market is crumbling, and it is growing evermore evident that the glorified Keynesian deficit spending cannot effectively be managed by government.

Dignity, honor, and respect are generally good qualities in a president, and not admitting failure shows one’s pride, but to not even apologize for a slow recovery seems heartless. If America is to have an honorable president, he shouldn’t be afraid to say he’s sorry.

Obama can no longer claim to be non-partisan

August 19, 2009

Obama’s efforts at reform were never really non-partisan. While unification behind Obama as a man was once bipartisan, the revelation of his policies ended this trend.

First, he revealed his plans at economic stimulus. From the very beginning, there was a great opposition to this package. Economists debated the potential effectiveness of the bill, and many believed it would do more harm than good. Nontheless, Obama pushed it through, and the only criticism of the bill was that it wasn’t read.

Then came talk of another stimulus, which still appeared in the public eye as non-partisan despite its support and opposition being down party lines.

More recently, on the new healthcare reform proposal: According to CNN, Democrats are considering a loophole that would only require a 50% vote for this bill to pass, because they can’t even get all of their own party to support it. The Dems are officially unwilling to negotiate their bills and are trying to abuse their temporary majority by ramming tyranny down our throats.

The good news, though, is that the Democrats might not take this option, and may drop their public option initiative in order to pass their healthcare reform. Says Obama, “[the] public option… is not the entirety of healthcare reform”. So, even should this healthcare overhaul pass, we may be able to undo it given time.

Nontheless, anyone that even mentions that Obama or his policies are bipartisan are either not watching the news or entirely incompetant.

No Stimulus Here

July 11, 2009

This week I went to a presentation on Stimulus Opportunities for Small Business, one of a series around the country slated to run through next February. One might think that talking about stimulus opportunities a year after passage might be too late, but not to worry, the stimulus rollout will take years. In fact, we were told that the plan was not designed to have an immediate impact, but rather to accrue slowly over time.

Depending upon who is adding up the numbers, about 10% of the stimulus money has actual gone into the economy since it was passed this past February. I’m sure that you remember how it was an emergency that could not wait a day. A Congressman was rushed from Ohio on a stretcher to vote. There was no time to read the bill, let alone obey Obama’s campaign pledge to post it for public critique. That was was right before the two day delay in signing in necessitated by arranging a proper ceremony in Colorado for the occasion.

Of the money that has gone out so far, nearly all has been in tax cuts and aid to the states to bail out Medicaid. Very few of the shovel ready projects are yet ready to receive funding. Projections are that by year end, optimistically 24% of the money will be spent, including continuation of tax cuts and such. The tax cuts officially end at the end of the year; Obama having promised to cut middle class taxes, but not for very long.

The emergency pretense under which the bill was passed was based upon the assumption that the economy needed an immediate boost. No one argued that spending a week reading the bill would produce the disastrous effect of having the money hit in the third week of July next year rather than the second week. So the question is then whether Obama and Congress actually realized the Stimulus Bill was not going to provide stimulus, or whether they actually thought the shovel-ready projects were shovel-ready.

I’m inclined to think they knew well that the effects would be a year or more down the road. The life cycle of a government project comprises (1) decide what the government wants to do, (2) prepare detailed specifications and bid documents, (3) put the contract out to bid, (4) select and qualify a vendor, (5) sign a contract, (6) have the contractor assembly the people, equipment, and materials to do the job, (7) start work, and (8) receive payment for work accomplished. If (1) has been accomplished, then getting to (8), which when the money flows in quantity, takes 18 months if the skids are greased. If a contractor has been awarded a contract and awaiting funding to start work, it would only be through an accident of timing. No one stands poised above their shovel awaiting a go ahead. If there are Congressmen too poorly informed to know this, there is no shortage of experienced bureaucrats and Congressional staff who would surely tell them.

Moreover, Obama knew there was really no rush, hence his unnecessary delay in signing. Now, the word is at the Opportunities seminar is that it was designed to roll out in 18 to 24 months. The reason for the story of it being an emergency was to cut off debate on what the $755 billion would actually accomplish. On top of that, there is an unspoken belief that having government spent money is “doing something” and that “doing something” is the wand that delivers government magic.

The history of past recessions is that recovery is likely to start around now. Perhaps this recession is much worse, so it won’t be until the fourth quarter or even the first quarter next year. So the stimulus is not likely to arrive until well after it would be a useful element in recovery. At the time the money is spent, the government will be competing with private enterprise to borrow the funds, burdening the productive private sector with higher interest rates. The government may alternatively print the money, causing inflation and still higher interest rates.

One may counter that, never mind stimulus, investment in infrastructure is a good long term investment. If so, then the hodge podge of projects assembled in a panic without debate is the wrong way to go about it. Investments should be shown to make a positive return. No one has bothered with any such analysis.

So what are the opportunities for small business? Nothing special, just register and bid on government contracts as usually. Most of the stimulus money will end up in construction projects unsuitable for small business. We did learn that the demand for small business loans is exceeding the supply, because many of the banks are not making the loans. The Small Business Administration only guarantees the loans to the banks, it doesn’t originate loans.

The Stimulus Bill was not designed to provide stimulus, so it is not surprising that it has provided negligible stimulus effect. So now we are hearing that is a good reason to enact another Stimulus Bill.

Inflationary Stimulus

March 26, 2009

According the the Federal Reserve Board, the federal government has nearly quadrupled the money flowing through our economy in the last five months…

While in the short term programs and people can pay down their debts, in the long term price inflation is expected to reach the double digits according to Dick Morris. What does this mean? Well, all those who were saving their money for harder times will see the value of their savings drop quickly. Further, interest rates will rise, making it harder to get a loan and start a business.

So, with diminishing savings and a halt in entrepreneurship, what can we see happening soon? Well, nothing good.

Obama: A Dedicated Follower of Keynes

March 12, 2009

Keynes was a macroeconomist from the 1900s. He lived in a time of deflation and recession. He argued that the solution to both problems was to print money and spend it on infrastructure. This would stimulate the economy and put an end to deflation. Sound familiar?

Well, not really. While Keynesian Economics work in the short term with economies in recession due to deflation. However, we aren’t. The world is in recession for inflation and government failure (when the government intervenes in market failure, creating a vaster mess than before).

So, when Obama believes this policy and defends it publically, we must remember that now is not the time, and while ‘yes we can’, we’d better not.

Economic Stimulation

March 1, 2009

History has shown us that liberal governmental economic policy does not help the economy (the New Deal, Jimmy Carter). Well, let’s see what it was that they did.

Conservatism was weak in the 1920s and panic lead the nation from recession to depression.

The New Deal (which extended the Great Depression  years) created government jobs, taxed the rich, and tryed to control the economy through central economic planning. He ended the gold standard, forever inflating the dollar. He set minimum wages and prevented people from working more than so many hours a week. He also created the now infamous Fannie Mae.

The result of the New Deal was… nothing. The unemployment rate lurched between 13%. and 24% until WWII.

Carter, on the other hand, tried to control the free market indirectly. He cut imports on foreign oil. His attempts to control the United States energy resulted in the still-remembered fuel-shortages. Carter essentially ruined the economy.

Reagan, on the other hand was successful at economic recovery. With large tax cuts and deregulation, he brought down inflation and unemployment.

History seems to speak against Obama, whose policies (government jobs and central economic planning, as well as regulation) resemble Roosevelt’s and Carter’s. Their policies failed.

As George Santayana once said, “Those who cannot remember the past are condemned to repeat it.”

Remaking Society

February 26, 2009

As we go further into debt, I have a new solution:

The government could just print out money and mail it to people’s houses using government mail. Then the people could use that money at a government supervised store to buy everything they need!

Everyone wins: the shops get money, the manufacturers get money, and the little guy gets money and lives to tell the tale. And the best part is, NO WORK! What a wonderful idea!

But wait a minute. This is a terrible idea! Printed money has no value, and the more money in circulation, the less its value.

Government is the only thing responsible for inflation. Failing to spend less than budgeted, the governent prints money and throws it into the system in packages it believes are stimulus. On the contrary, the government is raising the price of everything and lessening the value of the dollars in the hands of taxpayers and even in the hands of government.

This alone wil negate any possible positive effects any money printed, whether they call it stimulus or something else.

And where is this empty money going again? Well, not even your congressmen know.

Too Late Now.

February 14, 2009

Well, the pork pack passed the senate last night.

Obama will sign the bill in two days.

It is important to point a few things out:

Not one bit of it will permanently help the economy. Parts will not take effect for years. Most of it directs federal money to construction, which of course dumps money into the construction industry, creating  jobs. But these jobs are only temporary. And afterward, we have a bankrupt nation and a bunch of beautiful empty buildings.

When we divide the 789,000,000,000 dollar pork pack between the 15,000,000+ doctors, lawyers, and businessmen that compose the top 5% income group in our country,we notice something: This pork alone costs 1 out of 20 people $52,600 dollars. And this is only the first step. We need to remember that this $52,600 is coming from people that make as little as $250,000 a year. Many of these people are already having trouble paying their mortgage and keeping their business alive.

So, comrades, even though this isn’t directly hurting you and you can now enjoy an extra $8-13 a week, remember: more jobs are going to be cut. Inflation will skyrocket.

But don’t worry. Change is coming.

Delay is preferable to error.

February 6, 2009

Do we still believe in wisdom?

Thomas Jefferson once said, “Delay is preferable to error.”

A growing number of economists don’t believe that Obama’s great stimulus plan will not help the economy. In fact, it will probably only add to the current inflation.

Throwing money at a wall doesn’t move it.

Wise up, congressmen. Vote this bill down. Rid it of pork and cut the total expenses down to below $100 billion.

We can’t sit around and buy into things like this, for Jefferson also said, “All tyranny needs to gain a foothold is for people of good conscience to remain silent.”