Wasting Money

We learned in a Congressional Oversight Panel report, released Friday, that the initial $250 Billion in disbursements from the bailout was a smashing success for the banks. The report states that the initial disbursements amounted to overpayments to these companies in the amount of $78 billion. That's all equity (probably non-taxable) on the banks' books. They must be thrilled!!!

Financially ailing insurance giant American International Group, which the Treasury Department deemed to be too big to be allowed to fail, received $40 billion from the Treasury for assets valued at $14.8 billion, the oversight panel found.

This makes me want to establish my own bank and immediately begin requesting funds from the government. Do you think they'd fall for that one?

One of the following happened:

1) The government overpaid on purpose as a way of propping up the balance sheets of the banks. In other words, this was a massive government handout that the treasury knew would never be paid back, despite their insistence to the contrary;

or

2) The government didn't know that they were paying too much. I don't know if this is the scarier scenario or not. I do think this is the most likely case, as evidenced by this quote:

In December, in response to questions from the oversight panel, the department wrote that the value of preferred stock purchased by the government was "at or near par," meaning Treasury paid $1 for every $1 dollar of asset.
"The way the Treasury secretary described it does not fit with the numbers that were produced in our much more extensive valuation analysis," panel chairwoman Elizabeth Warren told reporters Friday. "The secretary of the Treasury described it in December that these were par transaction and that is not supported by the numbers."

The fact of the matter is, whether you agree with the stimulus or not, how can you trust the government to handle financial transactions of this magnitude based on their track record? Leaving aside the persistent threat of corruption, most politicians just don't have the education or experience to deal with financial matters of this sort.

Meanwhile, the Government continues to act just like a little kid, always pushing their limits to see how much they can get away with before we, the people, get angry enough to do something. Unfortunately, we apparently haven't gotten angry enough in a long long time.

This is just another reason why I am 100% opposed to any new stimulus plan being proposed.

Letter from Chairman Stan Lockhart

Below are excepts from a letter dated February 3, 2009 from Utah Republican Party Chairman Stan Lockhart. Very interesting read!!

Dear Fellow Republicans:

Last week I was in Washington DC and had a chance to hear a great deal regarding the federal "stimulus package". As crafted by Democrats, I can't see much evidence that it will deliver on its promise to jump start the economy. Much of the funding won't be spent immediately and many of the pork barrel projects won't create jobs. It is the same old tax and spend liberalism we thought Ronald Reagan vanquished long ago. This huge spending bill has reminded me of some famous quotes:

"A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship."

"Great nations rise and fall. The people go from bondage to spiritual truth, to great courage, from courage to liberty, from liberty to abundance, from abundance to selfishness, from selfishness to complacency, from complacency to apathy, from apathy to dependence, from dependence back again to bondage."

We live in a world of instant gratification. Advertisements bombard us daily with slogans like "you deserve it now". No wonder some are blinded with promises of government doing most things for them. It's an enticing pitch. But dependence on government leads to bondage and it seems as if we are heading there with increasing speed. After all, it's the Democrat mantra.

Timeless, traditional values are needed now more than ever before. Simple, time honored financial counsel of getting out of debt, living within our means and making do with what we have are needed today. Government should live by these same values. Self-reliance should never be out of style. Can anyone truly believe that all this federal spending won't burden future generations? In its current form, this spending bill is mortgaging our posterity's future. There is a phrase that the bandage should fit the wound. In its current form, this Democrat bill is just more special interest pandering.

Economic Stimulus Q&A

This year, taxpayers will receive an Economic Stimulus Payment. This is a
very exciting new program that I will explain using the Q and A format:

Q. What is an Economic Stimulus Payment?
A. It is money that the federal government will send to taxpayers.

Q. Where will the government get this money?
A. From taxpayers.

Q. So the government is giving me back my own money?
A. Only a smidgen.

Q. What is the purpose of this payment?
A. The plan is that you will use the money to purchase a high-definition TV
set, thus stimulating the economy.

Q. But isn't that stimulating the economy of China?
A. Shut up.