Well, I thought I was going to have an entire plan to show why it is wrong, but apparently President Obama And Krueger (Freddy perhaps) decided to release half a plan and promise to show “reductions in the budget later” while at the same time President Obama is stumping about passing it as it is. So basically this new “super-committee” is going to balance out these costs at some later unspecified time and we will never hear about it again.
I am frankly personally disappointed in congress for setting up such a thing that will result in vague returns and will probably never be followed through on. The compromise is now being used against them as the president drives the deficit up more without paying for it other than saying, well this committee will deal with it because they are “super.”
The plan simply put is another fantasy that shows that these two do indeed believe in unicorns as shown below:
Picture from: http://www.unicornlady.net/Gallery/gallery6-1.html
Does he think congress and likewise Americans are completely retarded? He pulled this type of behavior countless times when he would promise a second plan to offset concerns and never delivers. Sorry, release a full plan and go from there. Not some magical plan based on fantasy and unicorns. Give us some real plans instead of half a plan and platitudes to choke the above unicorn.
Let’s also not mention how he just basically ignoring months of battles over the deficit and his solution is to “trust me” I will make this balance but we first must pass this as it is. The best part of all of this? Today he had the gall to say this: “We spent a whole summer fussing about the deficit.” So now that they fussed about the deficit all summer long we can piss into the wind and just add to the deficit? This man is seriously arrogant to say the least.
Obama also called on Congress to “stop the political circus and actually do something to help the economy.”
But where is the balance? We are promised balance in his speech, but there is NONE.
So in essence, I can look at one side of the plan and explain and give explanation without sound bites that you hear from the media, but I can not really tell the entire picture because frankly I am kind of wondering if we will ever see the entire plan and this is just another big stimulus waste.
Now, let us return to some of my earlier posts. I was discussing how Obama’s plan was going to be pointless, probably make things worse and more than likely be just another failed stimulus plan that he would trump up as “the way to save the country” as if the previous stimulus packages never existed.
Well, it is not entirely pointless. The tax breaks discussed are rather minor but they will have an impact on driving up long-term growth. So in essence, there is some good for this. But this growth is temporary. His tax-breaks are for all Americans which will help to an extent, but we do not have this money. On the other hand, he turns around and calls for his age-old call to raise taxes on people who make 200,000$ a year or more. These are the people who run small businesses and who are those that are hurt the most during recessions and likewise tend to drive recoveries.
In other words, he is calling on congress to say, let’s make another failed stimulus, add to the deficit some more, and just throw caution to the wind. The man loves to use Keynesian methods, but fails to apply it properly in any method. Keynes philosophy calls for deficit spending by spending a little more by Government (not shovelful of pointless jobs) and by reducing taxes ACROSS THE BOARD. As much as I think Keynes ideas do not work most of the time, if applied correctly they can help at a smaller scale, but what the president is proposing is rather retarded and I will say this over and over again. This Krueger fellow does not seem to know his stuff if he pushed any of this to any extent.
But let’s not focus too much on his failures in the past, another failed stimulus…sure it is nothing but a copy of old stimulus plans. But let us look at some details and what their effects are going to be.
First the jobs promised and those provided: The jobs for teachers are just “shovel-ready” jobs to employ people that we can frankly not afford to employ without borrowing more money we do not have and like-wise paying for it later in both higher interest on the federal deficit and at some point a very large shrinking of Government. Each of these jobs will cost more jobs in the long-term which completely negates any possible long-term benefits from tax cuts.
Job losses from increases in taxes for those who make more than $200,000 a year are going to be more than the jobs gained by teachers. Like I post here often and repeat, the Government is always going to be less efficient than private enterprise so his basic flaw with this plan is just apparent.
The new bank idea of creating a national federal bank to handle infrastructure improvements is another pointless scheme that just increases Government jobs. Another layer of Government that does very little work and takes more money to do jobs less efficiently. President Obama had two other stimulus packages to improve our infrastructure but he failed miserably to even come close. Those stimulus’ promised much more and cost us much more money. They also provided tons of other shovel-ready jobs.
I realize some people still claim that President Obama is “right of center” and believe this. But any man who wants to increase Government by so much is fiscally liberal to radical. This is another post coming up, but for now rest assured that the president is showing his true colors here.
We do not need more federal employees who are over-paid, under-worked and get arrested on work-days. (Dr. Hansen). What we need is fiscal responsibility. This stimulus package is even worse than previous ones because unlike those, we could borrow the money at AAA and not worry as much. Now our credit rating is reduced, any increase in interest rates back to 2008 levels will make it so that interest payments are the number one cost in the budget, and to top this all off, the deficit is just getting worse. The problem is going to bite us at some point and like I posted previously about “Social Security” we have more problems than just the deficit and the recession.
But to give some useful facts on the deficit:
Here is a handy chart for the deficit.
payments on debt
|Avg Prime Rate
|Note: 2011 is a partial Year|
We are currently at approximately 500 billion a year in expenses from just interest on the national deficit. To put this into perspective, this approaches what we spend on defense every year. This is also notable since we are at record low-interest rates currently. Needless to say, when you look at that chart over time, we are today spending just the same on the interest as we did in 2008. This is after the deficit has almost doubled, and the reason is the interest rates.
Here we see that the interest rate has gone down a ton in the last 3 years, and it has just about halved in about the last 5-6 years. Due to this fact, we are still spending the same on interest rates that we were say 5-6 years ago. This will change when we head out of the recession. Interest rates are what is going to kill us in the long haul on this debt. The UK is in the same boat with the same level of debt as we currently and they were roughly 40% higher when Obama took office.
But if that is the case, why not issue a plan that is going to be neutral as far as the budget goes? Is it that difficult to come up with a balanced budget solution? I am sorry President Obama, but most of us did not say much with your first two stimulus packages even though we knew they were terrible. This was because we knew it wouldn’t matter with such a large majority in the house for the democrats.
But this time around, as you called for college students to badger representatives, I will like-wise community organize and badger other people to say the opposite. We do not need another failed stimulus which will cost us more jobs. We we need is sanity and fiscal responsibility. You were not elected to double our deficit. But I wonder if another four years for you will result in yet another doubling of the deficit? We would never be able to afford that, so let’s hope we never reach that point.