Wednesday, January 28, 2009

Vote "no"

Consider this post an open call for any and all members of Congress to vote NO on Obama’s proposed economic stimulus package. It doesn’t surprise me that Democrats are trying to spend billions of dollars, using the panic and fear over the economy as their motivation. It doesn’t surprise me that Obama is already breaking a campaign promise of not spending money if it’s not absolutely necessary. I knew that one was bull. What does surprise me is the willingness of Senate republicans to fall in line and help push this monstrosity through Congress.

Mitch McConnell is a coward. Can someone please find a conservative with a backbone to run against this guy the next time he is up for re-election!

So the Dems removed the millions earmarked for contraception. Great. They only did that because they got caught earmarking. But what about the money earmarked for community organizers? What about the $355 million earmarked for STD education? What about the half-billion earmarked to study the effects of climate change? Didn’t Obama promise no earmarks? The problem is that this is a “stimulus” package, which means that it is meant as an emergency measure to stimulate the economy. Obama says that two-thirds of it will be spent in 2 years. The other will be spent after. Simple fact: In order to qualify as stimulus it should ALL be spent within at least two years or else it’s not stimulus. So what Obama is pushing on the American taxpayer isn’t really stimulus, but more like an additional expenditure on top of our already overgrown federal budget – if the word “budget” can even be accurately used to describe what the people in Washington are doing.

The latest price tag, including interest, is $1.2 trillion. And not one single member of Congress can guarantee that this bill will create one single job. Yet, Mitch McConnell has yet to raise the slightest whimper of protest. This guy needs a bus ticket home…right now.

The central expense in the bill is a tax credit, or rather a government check, for the low income crowd. These are the people who don’t actually pay taxes but they will get a “refund”. $500 for individuals, $1000 for couples. He calls it a tax cut but that’s bull. You can’t cut someone’s taxes if they don’t pay taxes to begin with. Call it what it is…WELFARE!

Rebate checks were tried last summer and it did absolutely nothing to stimulate the economy. So Obama decides, “let’s do it again”. Then he wants to “create” jobs by building bridges and repairing roads and building windmills, or whatever. But still no one can guarantee any actual jobs will be created. So where is the money going?

Obama once said that we need another New Deal to get the economy back on track. The problem is that the New Deal didn’t work. FDR just spent a lot of money and the economy continued to sag. Why should we use that model for our current economic situation?

The only way to actually stimulate the economy is to cut taxes. How do we know this? Because it’s worked before. Reagan did it in the early 80s. Bush did it earlier this decade, and both times it worked. Cutting taxes leads to more private sector growth, which leads to more jobs, which leads to more private sector spending. If people have a job they have money to spend, they can maybe even buy a house. Private sector growth means HIGHER government tax receipts. Yes, cutting taxes actually leads to more government revenue. This is fact. And – for the record - $500 isn’t gonna do the trick. You don’t stimulate the economy without private sector growth and you don’t get private sector growth with high taxes and government spending. And you sure as hell won’t get it by giving the poorest Americans $500 because the poorest Americans can’t create any jobs with $500, hence the reason why Congress can’t guarantee job creation with this bill. It will be spent on basics and, like the rebates this summer, will be a mere blip on the screen of this recession.

Government spending doesn’t create economic prosperity. It has never happened before. Not once. NEVER! The government is ineffective at job creation. Big government means dependence on the government, and that only generates stasis. You don’t get economic growth with a static private sector. The private sector must be dynamic, it must spend and invest in order to grow the economy. This is as simple as it gets. Economics 101.

So unless a “stimulus” package involves drastic tax cuts it will not stimulate anything except more debt, bigger deficits, higher inflation. None of these things are good for the economy. Obama is about to make a big mistake. And we the taxpayer will eventually pay the price for it.

10 comments:

Dan Trabue said...

You can’t cut someone’s taxes if they don’t pay taxes to begin with. Call it what it is…WELFARE!

Seeing as how the poor purchase food, etc, and seeing as how they pay sales taxes, they DO pay taxes. Perhaps not federal (I'd have to see the details to know specifically who would be getting a check), but these folk ARE paying taxes and generally speaking, a larger percentage of their income on taxes, since their income is so low and thus a larger spent on basic necessities such as food.

Do you have a link to the actual plan so I can see actual details?

Dan Trabue said...

On the other hand, I agree wholeheartedly that McConnell needs to be replaced (albeit for different reasons than you, most likely) and I agree wholeheartedly that $1 trillion is a big gob of money and that concerns me.

At the same time, probably most Americans agree that "something" needs to be done. Further, our infrastructure HAS been deteriorating and not supported adequately and failing to do that can and often does cost MORE later and that seems a reasonable investment to me. Beyond that, I'd counsel caution and no great hurry on spending this sort of money.

Anonymous said...

D & J,

I was driving home from downtown Denver this evening. I heard the leader on NPR but not the story. The leader was: "Why do the 400 richest Americans pay only 17% of their income in taxes?" Or words to that effect.

TLGK

Rudy said...

Sadly, Obama reached across the aisle and gave the Republicans some mighty impotent...er...I mean important tax cuts. Not one Republican vote for his stimulus package after he caved and gave billions towards tax cuts, just for them?

The new dying Whig party is obsolete. They are fossilizing as I type. And in the green future their fossil fuels will be worthless, except maybe in countries that are, or used to be umm...socialist.

Wry Mouth said...

"The new dying Whig party is obsolete. They are fossilizing as I type. And in the green future their fossil fuels will be worthless..." why does the tone remind me of Tokyo Rose? ;o/

DT: let those on all three sides of the political spectrum, who think a trillion newly-printed $$$ is not quite sane policy to execute inside of 6 months -- let us all join hands and get to work. It's going to be a long haul!

;o/

Kristina said...

Ugh! I am sick of Mitch McConnell. I am planning to actively work against him in the next campaign. Unfortunately, that's a long way off. He's completely incompetent. And, I'd say, most of his constituents, on both sides of the aisle, are not happy with him.

As to the stimulus: No, I don't agree with Dan that something has to be done. The government getting involved will not help anything.

Auntyem said...

John --,you said, "Obama once said that we need another New Deal to get the economy back on track. The problem is that the New Deal didn’t work. FDR just spent a lot of money and the economy continued to sag. Why should we use that model for our current economic situation?"

Why do you think FDR's "New Deal" didn't work? It worked well enough to keep us afloat and kept us from becoming like Darfur. I was born during FDR's second term. I have lived through 13 presidents, an equal number of Republicans and Dems. My mother was born during Teddy Roosevelt's first term and lived through 15 presidents, two thirds of them Republican. She was a Republican, I have been an Independent.

Without FDR's New Deal, we would not have been in a position to quickly muster our resources to enter WWII. During that war, the innovation and creativity in this country resulted in the atomic bomb and a great war machine. We killed thousands of enemies in Asia and Europe, and after the war sent a man to the moon in a race with the Russians who also were innovative even under their own Socialist system. Those years were good for us because it took our enemies' economy a long time to recover from the war, and we benefited from that because we were the producers of all kinds of wonderful new things while they were stuck rebuilding with our help. That is when no other country could match us. Our economy was the only viable one because the destruction had taken place overseas.

The reason I tell you this is that in bad times, which I can tell you come in cycles, you need to have a safety net. We have always had a viable government, unlike others' who were destroyed. FDR kept us safe during the war---our mainland was never attacked until 9-11-01.

You can't let things get so bad that you can't be prepared for a catastrophic emergency. My wealthy grandfather ended up land poor, my mother and her siblings had to make do, pick themselves up by their bootstraps, and they had to share with others who had nothing, the "no income" folks. Being "low income" was a step up. It takes the government a while to catch up and bolster things enough to get all people on their feet in the worst case scenario, which we aren't in yet. We can't let it get that way.

What we can't allow to sag is our individual and collecive creativity and innovation and ambition. All my life things have always gotten better for me and mine, no matter who was president. My mother used to tell me stories of her ups and downs. When she was a teenager her father bought her riding horses, then new roadsters (cars with rumble seats). Then the Crash of 1929 came, and things got hard for everybody for a long time, but people were fed and there was the WPA that my uncles got work with, etc. Then we were attacked by a fiercly determined enemy, but we were able to rise to the occasion, and it wasn't from nothing, thanks to the New Deal.

My husband tells me that Reagan had no more to do with our economy than did the dot com era that started in the garages and bedrooms of geeks, while big industry started to wane. I remember that we called the eighties "the Me decade" things were so good. Vietnam was behind us, the future looked great, then we got greedy and lazy, and those that took stupid risks are now suffering.

I'm not saying that cutting taxes is bad, it is just that it should be done in a more equitable way. One thing that benefited us in California when we lived there was Prop 13 that put a cap on property tax. We still had a state income tax, and sales taxes. Here in this state there is no state income tax and there is a cap on auto taxes.

Obama didn't create the mess he inherited--why should he not try something different? I think Mr. Mitchell (I really don't know much about him) sees that we can't continue to leave things as they were when Bush left office.

Emilie
Port Orchard, WA

John Washburn said...

Em,

I say the New Deal didn't work (and I'm not alone in this) because it didn't revive the economy. World War II brought us out of the Depression because of the employment demands and the increased industry. Obama himself concedes this, saying that the New Deal was ineffective because FDR DIDN'T SPEND ENOUGH from the onset. This is crazy!

I only wonder how long the Depression would have lasted had we not been drawn into a global war. It's a simple fact that you can't spend your way to economic progress. It has NEVER happened in the history of the world. Look at Japan in the 90s. They tried something similar to what the Dems want to do and it failed miserably. Government spending does not create jobs. The private sector creates jobs. This is as basic as it gets.

As for Reagan, he inherited 22% inflation, 13% interest rates, high unemployment and the worst economy since the Depression. What did he do? He cut taxes dramatically. The result was the "me" decade because of the ensuing economic prosperity. 20 million new jobs created. You can't argue with history. If Obama succeeds in getting this bill passed he will become another Carter. He will be a one-term President and the Dems will lose the majority in 2010. They are making the same mistake that the GOP made when they had the majority, which is failing to govern from the middle and keep the spending under control.

Auntyem said...

Oh, John---we can argue this until the cows come home.

I remember that the eighties were a time of creativity and innovation, but the older things that had driven the economy started to wane. Then the dot com bubble burst, and nothing has replaced it, even though Bush had eight years to do something. The man had an MBA, for heaven's sake. I thought, gee, he is the first president to have a business degree, maybe he can do something for the economy.

True, the war he decided he had to wage the way he did dragged us down financially, and despite his kissy-kissy meetings with the Saudi princes, they refused to help. We don't have the allies we used to have.

If WWII hadn't happened, there is no telling when the economy would have recovered or what new thing would have driven that recovery. That Great Depression was SO bad, the worst ever, of course it would have taken time to recover from it. We also had great draughts, dust storms, crop failures, major disasters like we are now having.

Our West Coast has had some seismic movement lately. We live under the dread of an earthquake like the ones in China and elsewhere. Also we have been having weird snow storms and major power failures across the country. Seems like when we are in financial trouble, Mother Nature also gets in her digs. Soon the cyclones will be back.

So Reagan's policies resulted in 20million jobs. Where are they? Why didn't we come up with something like that during Bush's eight years? What is the next great thing on the horizon if taxes are cut? Big business took a big chunk out of our treasury, what bigger tax cut can they get? None of our economists seem to have any answers.

We'll just have to see how things go for Obama. He has said himself he will know in three years if he will get another shot at the presidency or not. In the meantime, he will face the same vilification our outgoing president got. No one has any respect anymore.

We can pray that we find some creativity and innovation, things that have been lacking for some time in the private sector. Of course the private sector creates jobs, but government also provides service jobs and creates the agencies to oversee the infrastructure, regulations, transportation, licensing, etc. for our safety and protection. Government is there to make sure the private sector doesn't get out of control with abuses. It can't be too small, or it would be ineffective and we would have anarchy.

Emilie
Port Orchard, WA

Ron Russell said...

How far will a trillion one dollar bills stretch, not really sure, just roughed it out in my head and I think about 100,000,000 miles (to the sun), of course, it would burn up before it got there. Then really, whats the difference the politicans are burning it anyway on their favorate groups and contractors. Obama was eating $100 a pound steaks in the white house the other night. No outrage over that, he took airforce one on a short trip to VA or was it MD, no outrage over that. When we can borrow no more to feed the fat cat politicians and their hanger-ons I will be happy---let them eat cow turds like the people in Magube's Zimbabwe are having to do because of his failed socialistic economy. So Mr. Obama bring on your Kenyan Keynesianism I ready for the cowdung in my pasture, you can scrape the pigeon dropping from the monuments your urban-dwelling supporters will build for you. I'll enjoy my barnyard cake and you can have the pigeon roost filling. What else can I say.