Saturday, February 07, 2009

Obama's trillion dollar aspirin

Friday night, the media was in a frenzy about how two Republican senators, Olympia Snow of Maine and Arlen Specter of Pennsylvania had cut a deal to answer President Obama's call for bipartisan support of his economic recovery package. The two Republicans agreed on $800 billion of spending and limited tax breaks instead of $900 billion. Add the interest on the debt incurred and its still a trillion dollars.

If that is not disturbing enough, Senator Judd Gregg, President Obama's Secretary of Commerce nominee, requested a study of the Obama package by the non partisan Congressional Budget Office. For years, Democrats have quoted the CBO as much as pastors quote the Bible in a sermon. That is probably about to change.

The CBO's response to Senator Gregg's questions indicated that their numbers and analysis concluded that the Obama package would stimulate the economy for two or three years, but end up hurting the economy more over the next ten years than if the government did nothing.

The growing cost of debt service on the national debt would hamstring the long term economy of the United States. It makes sense. Throughout history, large public debt spent inefficiently has always created a crunch on private capital. Simply put, if money is being spent to service the national debt, it can not be spent on investment.

Think of it on a personal level. If you ran up a huge credit card and had to pay a larger and larger percentage of your income just to pay the interest payments, you could not go out and buy things or otherwise spend your money. Suppose you are hurting, and someone offers you a $100,000 line of credit. In the next couple of years, you could sustain yourself nicely. However, when it came time to pay back the debt, or at least service it with interest payments, your economic well being would be worse off if the costs of servicing your debt leaves you with less money to spend than you had before you incurred the debt, especially if you spent the money on things that did not generate more income for you.

Such an example happens to people all the time. So, why should we expect it not to happen to us as a people? Further, it is in crisis when people do not make rational economic choices. Again, why should we expect us a people not to have leaders who make the same irrational choices?

There are times when it necessary to borrow money to make things work. Perhaps the United States is at that point. If it is, it must spend that borrowed money wisely, on things like payroll tax cuts, investment incentives and infrastructure spending that makes the nation more competitive. The hodgepodge of political wish lists included in the Obama package is not that.

One would think the Congress and the people would learn from the TARP mistake. President Bush urged immediate action, and now no one seems to know where $350 billion went while the stock values of the institutions TARP was supposed to help continue to struggle.

The American economy is like a deep cut. Sure, a bandage, however expensive, might stop the bleeding for the moment. However, without stitches and antibiotics, the wound will not heal and will fester, causing long term harm. All the President and the Democrats offer the American economy now is a very expensive band-aid, with no stitches or antibiotics. In essence, the American economy is getting first aid for the cost of advanced medical treatment. As one crackerjack staff member of VUI put it, Obama's package is "like giving everything you have for an aspirin to treat a headache caused by a brain tumor."

18 comments:

  1. Yawn. A Republican trying to hold back this country. Try again, loser. Obama won.

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  2. Motorcycle ManFebruary 07, 2009

    Obama is more like the snake oil man of the past who sold people bullshit remedies for their ailments. He ain't even giving us the bandaid.

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  3. Good article...but I swear, if you use the phrase 'crackerjack staff' again, I will take your blog off my feed reader. Seriously-is it necessary to use that adjective every time you post?

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  4. I think a lot of the people who give me idea about what to post on this blog. Stephen, do you have an idea of what else I can call folks who give me ideas and whom I trust. What do you think I should call them? I am always open making things better.

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  5. Taxpayer DanFebruary 08, 2009

    How about calling them the crack staff? Your ideas seems those from a man either drunk off his ass or high on crack.

    You don't have a clue and you are too high or drunk to not know you don't have a clue.

    You are pompous ass.

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  6. who knew the word crackerjack was so offensive?

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  7. Stan the ManFebruary 08, 2009

    I hear you Dan, how many beers does it take for a man to write against our great county council? I can not believe so many people worry about what the old drunk in Honea Path has to say. He ticks me off, with his alcohol induced self righteous rantings about doing what is right. I bet if McCarty sobered up and did not post "under the influence" he would see that Cindy Wilson is right and he needs to stand with her.

    Sober up, McCarty. Use your talents to help put the Preston folks in their place, not sit drunk on the fence.

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  8. Motorcycle ManFebruary 08, 2009

    Cindy Wilson is crazy as Hell. Besides, what does that crazy bitch have to do with what's going down in Washington? Thank God I live in Abbeville County.

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  9. Motorcycle ManFebruary 08, 2009

    Besides, that drunk son of bitch you put down seems to have the respect of most of the state. Check out how he keeps ranking up there.

    You Cindy Wilson people are either stupid or drunk yourselves in dismissng McCarty. Drunk or sober, that son of a bitch has called you for what you are and made people see it.


    Dan, you are fucking with a guy who you never want to fuck with. Believe me. McCarty is crazy as Hell, and he will wipe you out Dan. His whole family is that way. They are cool to hang out and drink with, but if you mess with them, God help you. They are crazy and don't give a damn.

    I don't either. Leave the man alone for telling it like he sees it. You Cindy Wilson people act like you can push people around. You ain't gonna push McCarty nowhere and you sure as Hell won't push me. I will be there helping McCarty push back. You think you are Hell, but brother, Hell's coming and you don't know it.

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  10. The President is offering us a chance to get out of the mess Bush and you Republicans created. I don't give a dman about Cindy Wilson, whoever she is.

    I stand by my President and wish you would do the same on your little blog.

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  11. Nobody ever considered that the current mess was caused, just as the last recession was, by plain ol' blind greed?

    This time it was overselling bum mortgages and the last time is was blind speculation in dot com stocks. In neither case, were finanical decisions being made based upon sound research and rational market-based logic, but rather the "hustle" of trying to make a quick buck.

    Any of you who took enough economic classes would know real wealth and prosperity is generated in the long run. This bailout is pandering to the same quick-fix mentality that got us in this mess. In the end, it will take us the same place.

    You can say "the Bush admistration could have stopped this ... could have reined in that" - but tell me how you stop people from making stupid decisions about mortgages and financing?

    People don't want to be told "no" anymore. We're becoming a society of self-indulgent spoiled brats looking at what we get today, rather than what we leave for future generations.

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  12. Taxpayer DanFebruary 08, 2009

    Mr. Capps, from your remarks, we can be sure that you are being paid by Joey preston.

    BE an honest man and tell us all here how Preston paid you. It will go easier on you if you just admit your wrongdoing.

    Do not like McCarty, he will be a prison bitch someday. Tell us what you know and be free. Tell us everything, Capps, like how you plotted with McAbee and Preston and how you and McCarty, that bastard, plotted with Plummmer and McAbee to thwart the will of the people.

    Please talk to us. We need your help to set things right and put McCarty in his place.

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  13. Forgive me for saying this, but Dan and or Stan, you guys need help. You seem fucking nuts.

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  14. Dan, I could tell you the truth, but what if the truth was not what you wanted to hear?

    You seem to know so much, so why don't you present it to the authorities? Surely you have proof to back up your claims, don't you?

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  15. Taxpayer DanFebruary 08, 2009

    We have the proof. Both you and McCarty enjoyed the skills of a certain stout lady. The people payed for your pleasure and if McCarty dares to run we will make it clear. Mr. Capps, you like your job? We can find a way to deal with you. You best shut your mouth about Anderson County. That is my favor to you. We know all about McCarty and all about you.

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  16. Motorcyle ManFebruary 08, 2009

    Dan, could you find your dick with a chauffeur and a road map? I doubt it. I bet you didn't get laid until you married some ugly bitch. Leave well enough alone.

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  17. Be nice, Dan's wife is nicer than you might imagine. In fact I met her the other night, but she seemed to forget all about ol' Danny boy.

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  18. More like a trillion dollar "tainted" tylenol

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