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.
Friday, February 6, 2009
Wednesday, February 4, 2009
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.
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.
Monday, February 2, 2009
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.
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.
Friday, January 30, 2009
Scolding Wall Street
After the New York comptroller's office reported on Thursday that bonuses in 2008 totaled $18.4 billion, Obama and Geithner lashed out against companies that continued to issue huge bonuses while receiving billions in funding from the Treasury's Troubled Asset Relief Program.
"That is the height of irresponsibility. It is shameful," Obama said Thursday.
Obama is right. The bonus payouts at this point in our economic cycle are shameful. Obama is talking the talk.
But what about walking the walk? Why not hold some of these companies accountable for their actions in the form of penalties and fees? As the nursery rhyme goes, words will never hurt them.
I believe in capitalism. I believe in a free market economy. But our free market is broken right now. The essential element we are missing is accountability. Until the companies in question are held accountable for their mistakes, their wrong-doings, and their bad decisions, no amount of stimulus or bailout will correct the state of our nation.
"That is the height of irresponsibility. It is shameful," Obama said Thursday.
Obama is right. The bonus payouts at this point in our economic cycle are shameful. Obama is talking the talk.
But what about walking the walk? Why not hold some of these companies accountable for their actions in the form of penalties and fees? As the nursery rhyme goes, words will never hurt them.
I believe in capitalism. I believe in a free market economy. But our free market is broken right now. The essential element we are missing is accountability. Until the companies in question are held accountable for their mistakes, their wrong-doings, and their bad decisions, no amount of stimulus or bailout will correct the state of our nation.
Thursday, January 29, 2009
Wednesday, January 28, 2009
How will the stimulus package help?
The article What Are They Buying? by Thomas Sowell can be found on National Review.
Everyone is talking about how much money the government is spending, but very little attention is being paid to where they are spending it or what they are buying with it.
The government is putting money into banks, even when the banks don’t want it, in hopes that the banks will put it into circulation. But the latest statistics show that banks are lending even less money now than they were before the government dumped all that cash on them.
Even if it had worked, putting cash into banks, in hopes that they would put it into circulation, seems a rather roundabout way of doing things, especially when the staggering sums of money involved are being justified as an “emergency” measure.
Spending money for infrastructure is another time-consuming way of dealing with what is called an immediate crisis. Infrastructure takes forever to plan, debate, and go through all sorts of hearings and adjudications, before getting approval to build from all the regulatory agencies involved.
Out of $355 billion newly appropriated, the Congressional Budget Office estimates that only $26 billion will be spent this fiscal year and only $110 billion by the end of 2010.
Using long drawn-out processes to put money into circulation to meet an emergency is like mailing a letter to the fire department to tell them that your house is on fire.
If you cut taxes tomorrow, people would have more money in their next paycheck, and it would probably be spent by the time they got that paycheck, through increased credit-card purchases beforehand.
If all this sound and fury in Washington was about getting an economic crisis behind us, tax cuts could do that a lot faster.
None of this is rocket science. And Washington politicians are not all crazy, even if it sometimes looks that way. Often, what they say makes no sense because what they claim to be doing is not what they are actually doing.
No matter how many times President Barack Obama tells us that these “extraordinary times” call for “swift action,” the kind of economic policies he is promoting take effect very slowly, no matter how quickly the legislation is rushed through Congress. It is the old Army game of hurry up and wait.
If the Beltway politicians aren’t really trying to solve this crisis as quickly as they could, what are they trying to do?
One important clue may be a recent statement by President Obama’s chief of staff, Rahm Emanuel, that “A crisis is a terrible thing to waste.”
This is the kind of cynical revelation that sometimes slips out, despite all the political pieties and spin. Crises have long been seen as great opportunities to expand the federal government’s power while the people are too scared to object and before any opposition can get organized.
That is why there is such haste to do things that will take effect slowly.
What are the Beltway politicians buying with all the hundreds of billions of dollars they are spending? They are buying what politicians are most interested in—power.
In the name of protecting the taxpayers’ investment, they are buying the power to tell General Motors how to make cars, banks how to bank, and, before it is all over with, all sorts of other people how to do the work they specialize in, and for which members of Congress have no competence, much less expertise.
This administration and Congress are now in a position to do what Franklin D. Roosevelt did during the Great Depression of the 1930s—use a crisis of the times to create new institutions that will last for generations.
To this day, we are still subsidizing millionaires in agriculture because farmers were having a tough time in the 1930s. We have the Federal National Mortgage Association (“Fannie Mae”) taking reckless chances in the housing market that have blown up in our faces today, because FDR decided to create a new federal housing agency in 1938.
Who knows what bright ideas this administration will turn into permanent institutions for our children and grandchildren to try to cope with?
I think the point that really needs to get across is that the politicians don't have an interest in solving the problem facing the country. They all know the economy would correct itself if left alone for a year or two. This feels more like a consolidation of power and a move towards a more socialist and centralized government than an actual attempt to rescue the economy.
Everyone is talking about how much money the government is spending, but very little attention is being paid to where they are spending it or what they are buying with it.
The government is putting money into banks, even when the banks don’t want it, in hopes that the banks will put it into circulation. But the latest statistics show that banks are lending even less money now than they were before the government dumped all that cash on them.
Even if it had worked, putting cash into banks, in hopes that they would put it into circulation, seems a rather roundabout way of doing things, especially when the staggering sums of money involved are being justified as an “emergency” measure.
Spending money for infrastructure is another time-consuming way of dealing with what is called an immediate crisis. Infrastructure takes forever to plan, debate, and go through all sorts of hearings and adjudications, before getting approval to build from all the regulatory agencies involved.
Out of $355 billion newly appropriated, the Congressional Budget Office estimates that only $26 billion will be spent this fiscal year and only $110 billion by the end of 2010.
Using long drawn-out processes to put money into circulation to meet an emergency is like mailing a letter to the fire department to tell them that your house is on fire.
If you cut taxes tomorrow, people would have more money in their next paycheck, and it would probably be spent by the time they got that paycheck, through increased credit-card purchases beforehand.
If all this sound and fury in Washington was about getting an economic crisis behind us, tax cuts could do that a lot faster.
None of this is rocket science. And Washington politicians are not all crazy, even if it sometimes looks that way. Often, what they say makes no sense because what they claim to be doing is not what they are actually doing.
No matter how many times President Barack Obama tells us that these “extraordinary times” call for “swift action,” the kind of economic policies he is promoting take effect very slowly, no matter how quickly the legislation is rushed through Congress. It is the old Army game of hurry up and wait.
If the Beltway politicians aren’t really trying to solve this crisis as quickly as they could, what are they trying to do?
One important clue may be a recent statement by President Obama’s chief of staff, Rahm Emanuel, that “A crisis is a terrible thing to waste.”
This is the kind of cynical revelation that sometimes slips out, despite all the political pieties and spin. Crises have long been seen as great opportunities to expand the federal government’s power while the people are too scared to object and before any opposition can get organized.
That is why there is such haste to do things that will take effect slowly.
What are the Beltway politicians buying with all the hundreds of billions of dollars they are spending? They are buying what politicians are most interested in—power.
In the name of protecting the taxpayers’ investment, they are buying the power to tell General Motors how to make cars, banks how to bank, and, before it is all over with, all sorts of other people how to do the work they specialize in, and for which members of Congress have no competence, much less expertise.
This administration and Congress are now in a position to do what Franklin D. Roosevelt did during the Great Depression of the 1930s—use a crisis of the times to create new institutions that will last for generations.
To this day, we are still subsidizing millionaires in agriculture because farmers were having a tough time in the 1930s. We have the Federal National Mortgage Association (“Fannie Mae”) taking reckless chances in the housing market that have blown up in our faces today, because FDR decided to create a new federal housing agency in 1938.
Who knows what bright ideas this administration will turn into permanent institutions for our children and grandchildren to try to cope with?
I think the point that really needs to get across is that the politicians don't have an interest in solving the problem facing the country. They all know the economy would correct itself if left alone for a year or two. This feels more like a consolidation of power and a move towards a more socialist and centralized government than an actual attempt to rescue the economy.
Monday, January 26, 2009
Libertarian Party on Obama's Bailout
The following was a mass email I received from the Libertarian Party last month regarding Obama's proposed stimulus package. It's an interesting read.
Your Monday Message from the Libertarian Party:
Well, we didn't actually go to Harvard.
In doing some background research on Obama's plans for the biggest public works project since the 1950s, we talked to Harvard economist Dr. Jeffrey Miron about what this means for the economy. Here's what he said:
LP: Is there a high chance of damage to the economy by implementing a public works program such as that proposed by Obama?
M: I think the economy will recover in 6-12 months, with or without the stimulus.
LP: Is the best prescription for economic recovery keeping the government out of the economy?
M: In my view, yes.
Miron brings up a great point about the lasting effects of new government programs. In fact, it was program of the New Deal that was at the center of the latest economic troubles: Fannie Mae.
Additionally, the idea that government can, quite literally, dig itself out of this current economic trough is patently absurd. In doing so, the government often makes things much worse for the economy. You might say that the government pays to dig its own grave--or, at least one for the taxpayers.
There are several major problems with Obama's public works plan, aside form the fact that government is making a mistake by even trying to take a hands-on role in the market.
Libertarian Party
Your Monday Message from the Libertarian Party:
Well, we didn't actually go to Harvard.
In doing some background research on Obama's plans for the biggest public works project since the 1950s, we talked to Harvard economist Dr. Jeffrey Miron about what this means for the economy. Here's what he said:
LP: Does it make much sense, in terms of stimulating the economy, for the government to invest in public works programs that, when built, produces nothing further?
Miron: Overall, no. The argument is that the beneficial effects of stimulus on overall activity are worthwhile, even if from a microeconomic consideration the projects to not make good cost/benefit sense. Thus, in the extreme form, the standard Keynesian position would say it makes sense to have the government hire people to dig ditches and fill them back up.
The theory that underlies this view is not stupid, but not compelling either.
At a minimum, any stimulus should be on things we would want even if they were not needed for a stimulus. I am personally not persuaded there are many things in that category given the levels of current spending.
The theory that underlies this view is not stupid, but not compelling either.
At a minimum, any stimulus should be on things we would want even if they were not needed for a stimulus. I am personally not persuaded there are many things in that category given the levels of current spending.
LP: Is there a high chance of damage to the economy by implementing a public works program such as that proposed by Obama?
M: There is certainly the possibility of adverse effects. New programs tend to last and have bad effects on incentives and efficiency.
LP: What do you predict to happen should Obama's proposal be implemented?
M: I think the economy will recover in 6-12 months, with or without the stimulus.
LP: Is the best prescription for economic recovery keeping the government out of the economy?
M: In my view, yes.
Miron brings up a great point about the lasting effects of new government programs. In fact, it was program of the New Deal that was at the center of the latest economic troubles: Fannie Mae.
Additionally, the idea that government can, quite literally, dig itself out of this current economic trough is patently absurd. In doing so, the government often makes things much worse for the economy. You might say that the government pays to dig its own grave--or, at least one for the taxpayers.
There are several major problems with Obama's public works plan, aside form the fact that government is making a mistake by even trying to take a hands-on role in the market.
Cost/Benefit Ratio - It is not a guarantee that construction projects will continue to bring any economic benefit upon completion, and "building for the sake of building"--as is Obama's objective--is an invitation for wholesale government waste. This is like what Miron referred to as "government hir[ing] people to dig ditches and fill them back up." Public works projects that benefit the economy more than the cost of production may be pursued for this reason (at least by those that agree with government intervention, as clearly the Libertarian Party does not); however, no public works program should be undertaken for the sake of simply creating jobs. Some economists, like Economic historian Price Fishback, predict that "such public-works spending would crowd out a significant amount of private construction," on top of being a waste of taxpayer money.
Limited Scope - Public works programs benefit one specific industry, and even a smaller amount of those in that industry. Not every construction firm is able to handle the renovations of a bridge, or the construction of a new school. Most of those that would benefit from a large-scale public works program would be large and specialized firms. As such, a construction-based stimulus would have no demonstrative benefit outside of the construction industry. These types of plans "suffer from a common problem–they will end up generating employment for highly specialized businesses and workers, rather than stimulating economic activity more broadly," says economists Susan Woodward and Robert Hall. "Thus a program that funnels money to construction firms and their workers mainly raises their incomes and employment levels and has relatively little effect elsewhere."
Too Slow For Impact - One main element of any economic stimulus plan is rapid and immediate relief. Relief plans that take too long to implement often kick-in after they are needed. This is a major complaint with most stimulus packages that are proposed, and large-scale public works programs are one the best examples of this delay. Many of these projects will take too long to get from legislation, to planning, to approval, and finally to the actual construction phase in order to have their intended impact. What we will eventually have is massive construction spending during a time where an economic stimulus is not needed.
Magic Money - One of the oft cited objections with Bush's economic policies was his penchant for massive government spending without any plans to offset this spending with cuts in other areas. As a result, trillions have been added to an already exploding national debt. A huge problem with Obama's public works program is that it will add at least $700 billion (and most likely more, in the end) to our national debt, and Obama has stated no plans on how he hopes to address the deficit. Most Keynesians will overlook this fiscal imbalance, but when the spending appears to have no real economic benefit (should it fail the already-established cost/benefit test), then Keynesians must even wonder if there is a point to the spending.
Overall, the moral of the story is this: Obama's public works plans carry no attestable benefit, and much unknown risk. On top of this, there are several other better options for economic recovery...like keeping government out of the economy altogether, and letting it work itself out.
In this economic crisis, the best options for economic stimulus are ones of less government action--not more government action. If government wishes to do anything, we suggest it simply cut taxes. Tax cuts are always a good thing, and their economic impact much more proven.
This way, taxpayers benefit, the economy rebounds and government still gets that warm-fuzzy feeling inside like it did something good.
In this economic crisis, the best options for economic stimulus are ones of less government action--not more government action. If government wishes to do anything, we suggest it simply cut taxes. Tax cuts are always a good thing, and their economic impact much more proven.
This way, taxpayers benefit, the economy rebounds and government still gets that warm-fuzzy feeling inside like it did something good.
Live free,
Andrew Davis
Director of CommunicationsLibertarian Party
Obama Wins
From Politico: Obama to GOP: 'I Won'
“We expressed our concerns about some of the spending that’s being proposed in the House bill,” House Minority Leader John Boehner said after meeting with Obama.
“How can you spend hundreds of millions of dollars on contraceptives?” Boehner asked. “How does that stimulate the economy?”
It doesn't. This is a hint of what our new stimulus package is going to include: millions of dollars of worthless pet projects that will do nothing to turn the economy around. But that's the way politics operates. A nice spending package is put together, full of worthwhile projects. Then this is added, and that is added. The millions pile up. And suddenly contraceptives have become an important piece of the legislation.
How do these people get away with this? And how do they sleep at night? This is not how I want my tax money spent!!!
Pelosi suggested that the package, currently at $825 billion, could become even larger.
“It has grown,” Pelosi said, “and we’re still in the process.”
It's going to be funny to see what else these people can find to spend our money on.
But worst of all are the refundable tax credits that will be paid out to those who don't earn enough to pay taxes. In essence, the government will now be using my tax money to pay people for being poor!! How do I get in on that deal? Why would people want all these new jobs the government is creating if they are going to be paid by the government to sit around and do nothing?
“We expressed our concerns about some of the spending that’s being proposed in the House bill,” House Minority Leader John Boehner said after meeting with Obama.
“How can you spend hundreds of millions of dollars on contraceptives?” Boehner asked. “How does that stimulate the economy?”
It doesn't. This is a hint of what our new stimulus package is going to include: millions of dollars of worthless pet projects that will do nothing to turn the economy around. But that's the way politics operates. A nice spending package is put together, full of worthwhile projects. Then this is added, and that is added. The millions pile up. And suddenly contraceptives have become an important piece of the legislation.
How do these people get away with this? And how do they sleep at night? This is not how I want my tax money spent!!!
Pelosi suggested that the package, currently at $825 billion, could become even larger.
“It has grown,” Pelosi said, “and we’re still in the process.”
It's going to be funny to see what else these people can find to spend our money on.
But worst of all are the refundable tax credits that will be paid out to those who don't earn enough to pay taxes. In essence, the government will now be using my tax money to pay people for being poor!! How do I get in on that deal? Why would people want all these new jobs the government is creating if they are going to be paid by the government to sit around and do nothing?
Friday, January 23, 2009
If I Were President: The Bailout
I'll begin by saying I don't support a bailout of any kind. But the Democrats must spend, so I just want them to spend the right way.
The source of this entire financial fiasco was the mortgage meltdown. If you want to bring the economy out of recession, you have to start by fixing the mortgage problem. And you don't fix the mortgage problem by throwing money at the problem loans that are going to go into foreclosure no matter how much help they receive. You also don't fix the problem by giving money to the banks without helping the people the banks have lent to.
I propose we take a couple hundred billion out of this upcoming stimulus bill and use it to pay down the balances of mortgages that are current and held by responsible people who can afford to continue paying the mortgage. With $200 Billion, you could pay down 4 million mortgages by $50,000. The mortgage holders not only receive a huge infusion of cash from these paydowns, but the American people would also benefit tremendously. This could pay off quite a few mortgages completely, freeing up a monthly sum of money that will be infused into the economy. The paydown would also help a large number of people who are upside down on their mortgages. These people would now be able to refinance their mortgages at the lower principal amount, if they so desired, reducing their monthly payments, which would also free up cash to be infused into the economy. It's a complete win-win, not only for the mortgage holders, but for millions of people who need help.
I'm sick of the banks receiving billions of dollars without helping a single person with that money. How much better off would we be if the first bailout had gone to pay down mortgages instead of just sitting in the vaults of these huge corporations who love hoarding money?
The source of this entire financial fiasco was the mortgage meltdown. If you want to bring the economy out of recession, you have to start by fixing the mortgage problem. And you don't fix the mortgage problem by throwing money at the problem loans that are going to go into foreclosure no matter how much help they receive. You also don't fix the problem by giving money to the banks without helping the people the banks have lent to.
I propose we take a couple hundred billion out of this upcoming stimulus bill and use it to pay down the balances of mortgages that are current and held by responsible people who can afford to continue paying the mortgage. With $200 Billion, you could pay down 4 million mortgages by $50,000. The mortgage holders not only receive a huge infusion of cash from these paydowns, but the American people would also benefit tremendously. This could pay off quite a few mortgages completely, freeing up a monthly sum of money that will be infused into the economy. The paydown would also help a large number of people who are upside down on their mortgages. These people would now be able to refinance their mortgages at the lower principal amount, if they so desired, reducing their monthly payments, which would also free up cash to be infused into the economy. It's a complete win-win, not only for the mortgage holders, but for millions of people who need help.
I'm sick of the banks receiving billions of dollars without helping a single person with that money. How much better off would we be if the first bailout had gone to pay down mortgages instead of just sitting in the vaults of these huge corporations who love hoarding money?
Wednesday, January 21, 2009
Banks Teeter
Read this for a discussion of the state of the financial system.
"The size of the problem is growing faster than the banks' ability to handle it," said Joe Battipaglia, market strategist at Stifel Nicolaus. "We're halfway through the bailout money, and the banks are in worse shape than they were six months ago."
Investors expect Obama's team to consider a range of options, including pumping more money into banks and creating a government entity to buy up bad bank assets so they'll start lending again.
What makes us think that throwing another few hundred billion is going to make things any better? Why do we want these large banks to stay afloat? Wouldn't we be better off letting them die, and let the smaller banks with better management grow stronger?
And what makes us think that the government could run the banking system any better than the current boards and CEOs? Politicians generally did not go to school to learn about business. Politicians generally don't have a business background. I wouldn't trust my money in a bank that is owned and operated by our government.
The most troubled banks are "going to definitely go down" without more government help, said Jonathan Macey, a law professor at Yale University who wrote a book about a bailout of Sweden's banking system during the 1990s.
"And they may go down with it," he added. "The pace of these bank losses is outrunning the infusions by the government."
The banks have had their chance. If there has to be a bailout (and what would Democrats do if they weren't spending money), it's time to bail out the people and NOT the companies. How about using bailout funds to pay down the mortgages of those of us who have been responsible homeowners? Paying down our mortgages would not only be beneficial to us as homeowners, but that money would be a huge cash infusion to the banks and holders of out mortgages anyway. It's a win-win. Why can't those in charge figure this out? Because they don't want to? Because they have another agenda?
"The size of the problem is growing faster than the banks' ability to handle it," said Joe Battipaglia, market strategist at Stifel Nicolaus. "We're halfway through the bailout money, and the banks are in worse shape than they were six months ago."
Investors expect Obama's team to consider a range of options, including pumping more money into banks and creating a government entity to buy up bad bank assets so they'll start lending again.
What makes us think that throwing another few hundred billion is going to make things any better? Why do we want these large banks to stay afloat? Wouldn't we be better off letting them die, and let the smaller banks with better management grow stronger?
And what makes us think that the government could run the banking system any better than the current boards and CEOs? Politicians generally did not go to school to learn about business. Politicians generally don't have a business background. I wouldn't trust my money in a bank that is owned and operated by our government.
The most troubled banks are "going to definitely go down" without more government help, said Jonathan Macey, a law professor at Yale University who wrote a book about a bailout of Sweden's banking system during the 1990s.
"And they may go down with it," he added. "The pace of these bank losses is outrunning the infusions by the government."
The banks have had their chance. If there has to be a bailout (and what would Democrats do if they weren't spending money), it's time to bail out the people and NOT the companies. How about using bailout funds to pay down the mortgages of those of us who have been responsible homeowners? Paying down our mortgages would not only be beneficial to us as homeowners, but that money would be a huge cash infusion to the banks and holders of out mortgages anyway. It's a win-win. Why can't those in charge figure this out? Because they don't want to? Because they have another agenda?
If I Were President: The Economy
I believe in the constitutional provision for separation of church and state. I wish there were an additional separation of economy and state.
If I were president, I would do all I could to get government out of private business as much as possible.
I believe in less regulation.
I believe in lower taxes.
I believe in free trade, not only within the country, but also internationally as well.
What about all the problems with the current economy? I know it hurts, but it's part of the ebb and flow of a free market. For too long, we the people have been living beyond our means, and it's time that we face the consequences. The biggest problem I have with the current environment of bailing out every failing industry is that these industries created the problems themselves. We need to bring back accountability to the free market. They should have to face the consequences, up to and including failure and demise. The lesson they should learn is to be better prepared for swings in the economy. The lesson they ARE learning is that it's okay to play the risk game knowing that the government will bail you for your bad decisions.
What about job losses created by the failure of businesses? It's unfortunate that people who work for these companies lose their jobs, when they generally are innocent bystanders. There is little they can do to avoid this mess. But I firmly believe that new jobs will always be created by stronger, better managed companies. There are jobs for everyone if they are willing to do whatever it takes to land a job, even though it might mean working for less pay or in a new industry or profession.
The best thing for the economy right now is to lower taxes. This would mean more money in the pockets of those who are willing and able to spend it. Lower taxes would lead to the creation of new jobs. The other side of the equation would be a massive reduction in government spending. I am a proponent of getting the federal budget balanced. This is becoming harder and harder with each new bailout. Under my direction, the government spending would be slashed tremendously. No more earmarks. No more pet projects. No fluff. We'd get our debt back under control.
There will always be down times in a free economy. We just need to learn to prepare for these down times. It's a tough lesson to learn, but we the people can accomplish anything.
If I were president, I would do all I could to get government out of private business as much as possible.
I believe in less regulation.
I believe in lower taxes.
I believe in free trade, not only within the country, but also internationally as well.
What about all the problems with the current economy? I know it hurts, but it's part of the ebb and flow of a free market. For too long, we the people have been living beyond our means, and it's time that we face the consequences. The biggest problem I have with the current environment of bailing out every failing industry is that these industries created the problems themselves. We need to bring back accountability to the free market. They should have to face the consequences, up to and including failure and demise. The lesson they should learn is to be better prepared for swings in the economy. The lesson they ARE learning is that it's okay to play the risk game knowing that the government will bail you for your bad decisions.
What about job losses created by the failure of businesses? It's unfortunate that people who work for these companies lose their jobs, when they generally are innocent bystanders. There is little they can do to avoid this mess. But I firmly believe that new jobs will always be created by stronger, better managed companies. There are jobs for everyone if they are willing to do whatever it takes to land a job, even though it might mean working for less pay or in a new industry or profession.
The best thing for the economy right now is to lower taxes. This would mean more money in the pockets of those who are willing and able to spend it. Lower taxes would lead to the creation of new jobs. The other side of the equation would be a massive reduction in government spending. I am a proponent of getting the federal budget balanced. This is becoming harder and harder with each new bailout. Under my direction, the government spending would be slashed tremendously. No more earmarks. No more pet projects. No fluff. We'd get our debt back under control.
There will always be down times in a free economy. We just need to learn to prepare for these down times. It's a tough lesson to learn, but we the people can accomplish anything.
Tuesday, January 20, 2009
Obama is the Anti-Christ?
My good friend Verle, who is little bit of a Bible nut, sent the text below to me, with comments in (parenthesis). My own comments are in [brackets]. While Obama may yet prove to be evil, I just don't see this chapter in John as applying to him. Still, it's interesting to think about.
THE REVELATION OF ST JOHN THE DIVINE CHAPTER 13
John sees fierce-looking beasts which represent degenerate earthly kingdoms controlled by Satan-The devil works miracles and deceives men.
1 I stood upon the sand of the sea, and saw a beast rise up out of the sea, having seven heads and ten horns, and upon his horns ten crowns, and upon his heads the name of blasphemy.
(Obama was Born in Hawaii)
[Obama doesn't have seven heads or ten horns. What is the name of blasphemy?]
2 And the beast which I saw was like unto a leopard, and his feet were as the feet of a bear, and his mouth as the mouth of a lion: and the dragon gave him his power, and his seat, and great authority.
(Presidency?)
[That would make we the people of the US of A the dragon. I don't think so. I'm still more apt to believe the beast is a reference to the UN or the European Union or some similar agency...even OPEC would make more sense to me.]
3 And I saw one of his heads as it were wounded to death; and his deadly wound was healed: and all the world wondered after the beast.
(Possible assassination attempt?)
4 And they worshipped the dragon which gave power unto the beast: and they worshipped the beast, saying, Who is like unto the beast? who is able to make war with him?
(the sickening display of the "Obama Worshippers" who say he is the great gift to the country)
[I haven't heard any rhetoric that would lead me to believe Obama's foreign policy will be strong enough to prevent anyone from making war against us...in fact, quite the opposite.]
5 And there was given unto him a mouth speaking great things and blasphemies; and power was given unto him to continue forty and two months.
(Very influential speaker - Obama?)
[One of those 3 1/2 year periods that John was so fond of writing about]
6 And he opened his mouth in blasphemy against God, to blaspheme his name, and his tabernacle, and them that dwell in heaven.
7 And it was given unto him to make war with the saints, and to overcome them: and power was given him over all kindreds, and tongues, and nations.
(the sickening display of the "Obama Worshippers" who say he is the great gift to the country)
[Just doesn't make sense to me]
8 And all that dwell upon the earth shall worship him, whose names are not written in the book of life of the Lamb slain from the foundation of the world.
9 If any man have an ear, let him hear.
10 He that leadeth into captivity shall go into captivity: he that killeth with the sword must be killed with the sword. Here is the patience and the faith of the saints.
11 And I beheld another beast coming up out of the earth; and he had two horns like a lamb, and he spake as a dragon.
12 And he exerciseth all the power of the first beast before him, and causeth the earth and them which dwell therein to worship the first beast, whose deadly wound was healed.
(Military Rule)
[Who would this second beast be? I'm not saying this is what I believe, but it makes more sense that the second beast would be Obama. But probably another consortium of countries of some sort]
13 And he doeth great wonders, so that he maketh fire come down from heaven on the earth in the sight of men,
(Nuclear WAR?)
[I've always wondered if that's the way the Middle East would end up going]
14 And deceiveth them that dwell on the earth by the means of those miracles which he had power to do in the sight of the beast; saying to them that dwell on the earth, that they should make an image to the beast, which had the wound by a sword, and did live.
15 And he had power to give life unto the image of the beast, that the image of the beast should both speak, and cause that as many as would not worship the image of the beast should be killed.
16 And he causeth all, both small and great, rich and poor, free and bond, to receive a mark in their right hand, or in their foreheads:
17 And that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name.
(Need for food Storage)
[or gold/other commodities usable for barter]
18 Here is wisdom. Let him that hath understanding count the number of the beast: for it is the number of a man; and his number is Six hundred threescore and six.
[What would this have to do with Obama?]
THE REVELATION OF ST JOHN THE DIVINE CHAPTER 13
John sees fierce-looking beasts which represent degenerate earthly kingdoms controlled by Satan-The devil works miracles and deceives men.
1 I stood upon the sand of the sea, and saw a beast rise up out of the sea, having seven heads and ten horns, and upon his horns ten crowns, and upon his heads the name of blasphemy.
(Obama was Born in Hawaii)
[Obama doesn't have seven heads or ten horns. What is the name of blasphemy?]
2 And the beast which I saw was like unto a leopard, and his feet were as the feet of a bear, and his mouth as the mouth of a lion: and the dragon gave him his power, and his seat, and great authority.
(Presidency?)
[That would make we the people of the US of A the dragon. I don't think so. I'm still more apt to believe the beast is a reference to the UN or the European Union or some similar agency...even OPEC would make more sense to me.]
3 And I saw one of his heads as it were wounded to death; and his deadly wound was healed: and all the world wondered after the beast.
(Possible assassination attempt?)
4 And they worshipped the dragon which gave power unto the beast: and they worshipped the beast, saying, Who is like unto the beast? who is able to make war with him?
(the sickening display of the "Obama Worshippers" who say he is the great gift to the country)
[I haven't heard any rhetoric that would lead me to believe Obama's foreign policy will be strong enough to prevent anyone from making war against us...in fact, quite the opposite.]
5 And there was given unto him a mouth speaking great things and blasphemies; and power was given unto him to continue forty and two months.
(Very influential speaker - Obama?)
[One of those 3 1/2 year periods that John was so fond of writing about]
6 And he opened his mouth in blasphemy against God, to blaspheme his name, and his tabernacle, and them that dwell in heaven.
7 And it was given unto him to make war with the saints, and to overcome them: and power was given him over all kindreds, and tongues, and nations.
(the sickening display of the "Obama Worshippers" who say he is the great gift to the country)
[Just doesn't make sense to me]
8 And all that dwell upon the earth shall worship him, whose names are not written in the book of life of the Lamb slain from the foundation of the world.
9 If any man have an ear, let him hear.
10 He that leadeth into captivity shall go into captivity: he that killeth with the sword must be killed with the sword. Here is the patience and the faith of the saints.
11 And I beheld another beast coming up out of the earth; and he had two horns like a lamb, and he spake as a dragon.
12 And he exerciseth all the power of the first beast before him, and causeth the earth and them which dwell therein to worship the first beast, whose deadly wound was healed.
(Military Rule)
[Who would this second beast be? I'm not saying this is what I believe, but it makes more sense that the second beast would be Obama. But probably another consortium of countries of some sort]
13 And he doeth great wonders, so that he maketh fire come down from heaven on the earth in the sight of men,
(Nuclear WAR?)
[I've always wondered if that's the way the Middle East would end up going]
14 And deceiveth them that dwell on the earth by the means of those miracles which he had power to do in the sight of the beast; saying to them that dwell on the earth, that they should make an image to the beast, which had the wound by a sword, and did live.
15 And he had power to give life unto the image of the beast, that the image of the beast should both speak, and cause that as many as would not worship the image of the beast should be killed.
16 And he causeth all, both small and great, rich and poor, free and bond, to receive a mark in their right hand, or in their foreheads:
17 And that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name.
(Need for food Storage)
[or gold/other commodities usable for barter]
18 Here is wisdom. Let him that hath understanding count the number of the beast: for it is the number of a man; and his number is Six hundred threescore and six.
[What would this have to do with Obama?]
Monday, January 19, 2009
A Question of Leadership
Can someone be a great leader if the direction he leads us is wrong?
I did not vote for Obama, nor do I agree with many of his positions. But I get a sense that people are getting behind him more so than in the recent past. I also get the feeling that at least for a little while, there will be great momentum towards getting a lot accomplished.
I've always been impressed by Obama's charisma. I've been impressed with his ability to garner support against great odds. He exudes confidence, and that confidence and hope seems to be contagious. These are traits of a great leader.
But is he really a great leader if the decisions he makes, while giving people hope in the short-run prove to be detrimental over the course of time? That's my greatest fear for his presidency.
People may be so blinded by this new hope that they overlook what Obama is actually accomplishing in office.
I did not vote for Obama, nor do I agree with many of his positions. But I get a sense that people are getting behind him more so than in the recent past. I also get the feeling that at least for a little while, there will be great momentum towards getting a lot accomplished.
I've always been impressed by Obama's charisma. I've been impressed with his ability to garner support against great odds. He exudes confidence, and that confidence and hope seems to be contagious. These are traits of a great leader.
But is he really a great leader if the decisions he makes, while giving people hope in the short-run prove to be detrimental over the course of time? That's my greatest fear for his presidency.
People may be so blinded by this new hope that they overlook what Obama is actually accomplishing in office.
Wednesday, January 14, 2009
Where Did the Republican Party Go?
An interesting blog post on Daily KOs discussed the downfall of the Republican Party.
My own take on the state of the Republican Party is similar. From an ideological standpoint, the GOP has progressed to the point where the Democratic party was about 20 years ago. Instead of small government, the Republicans are grown the size of the government. Instead of decreased government spending, the administration has spent more than any other presidency. Instead of free-market economy, the government has provided the largest ever bailout to Wall Street. These are all qualities that I would normally associate with the Democrats.
This is what I faced when I went to the polls. I could either vote for Obama, a liberal Democrat, or I could vote for McCain, a "conservative Democrat". That to me is not a choice I want to make, and in fact I voted for neither, instead voting for a third-party candidate.
If the Republican party ever wants my support, they need to find themselves again. They need to get back to basics. They need to remember who they are supposed to be and what they are supposed to represent. Until then, I will hope for the rise of a new political party that better represents my beliefs, ideas, and values.
My own take on the state of the Republican Party is similar. From an ideological standpoint, the GOP has progressed to the point where the Democratic party was about 20 years ago. Instead of small government, the Republicans are grown the size of the government. Instead of decreased government spending, the administration has spent more than any other presidency. Instead of free-market economy, the government has provided the largest ever bailout to Wall Street. These are all qualities that I would normally associate with the Democrats.
This is what I faced when I went to the polls. I could either vote for Obama, a liberal Democrat, or I could vote for McCain, a "conservative Democrat". That to me is not a choice I want to make, and in fact I voted for neither, instead voting for a third-party candidate.
If the Republican party ever wants my support, they need to find themselves again. They need to get back to basics. They need to remember who they are supposed to be and what they are supposed to represent. Until then, I will hope for the rise of a new political party that better represents my beliefs, ideas, and values.
Tuesday, January 13, 2009
Bernanke: More bank bailouts needed
This headline is found on CNNMoney.
My hope is that Bernanke is talking about the second half of the original $700 Billion TARP money instead of an additional amount of money over and above the $700 Billion. Either way, it does not cease to amaze me how ridiculous this whole thing has gotten to be.
The country has fallen down the slippery slope. We passed the original $700 Billion after a lot of huffing and puffing. Now the $700 Billion has become the new landmark against which to compare future efforts. Obama's proposed $775 Billion stimulus package no longer sounds excessive. Do you remember how you felt a year ago when Bush proposed his $30-something billion stimulus package? Didn't it sound like a huge sum of money at the time?
Bernanke suggested that more banks and financial firms are likely to need additional capital injections from the government, and that further guarantees of their debt could be necessary, in return for the federal government receiving further equity in the firms.
Doesn't this sound like a further move towards a socialized banking system, which I'm thinking must be the intent of the Fed in the long run.
"Everything he's saying is right; we have a lot of tools and we have to use them wisely," said Barry Ritholtz, CEO and director of equity research for research firm Fusion IQ. But Ritholtz added that the bailout has already been mismanaged by the Treasury Department.
Why do we want to put the Treasury Department in charge of more taxpayer funds if the consensus opinion is that they have so poorly managed the original funds? Two wrongs don't make a right. Neither do 700,000,000,000 wrongs.
Bernanke dismissed this risk, however, saying that inflation appears well-contained in the near term. And he said despite the fact that the Fed is taking on much riskier assets than normal as collateral, he does not believe there is a major risk of having those loans go bad.
"The Federal Reserve has never suffered any losses in the course of its normal lending to banks" and Wall Street firms, he said.
Investing 101 tells us that past results should not be considered an indicator of future returns. Just because the Fed hasn't lost money in the past doesn't mean the same will hold true. It seems to me Bernanke has not come to the realization yet that this is a unique problem and the standard solutions are not necessarily going to work again and again.
This has the feel of an out-of-control driver. The car begins to fishtail, the driver over-corrects, and the car skids out of control the other direction. In this case, my biggest fear is that the Fed overreacts and the economy skids out of control in the other direction. In this case, the other direction is inflation.
A good article from CNNMoney about the potential threat of inflation can be found here.
My hope is that Bernanke is talking about the second half of the original $700 Billion TARP money instead of an additional amount of money over and above the $700 Billion. Either way, it does not cease to amaze me how ridiculous this whole thing has gotten to be.
The country has fallen down the slippery slope. We passed the original $700 Billion after a lot of huffing and puffing. Now the $700 Billion has become the new landmark against which to compare future efforts. Obama's proposed $775 Billion stimulus package no longer sounds excessive. Do you remember how you felt a year ago when Bush proposed his $30-something billion stimulus package? Didn't it sound like a huge sum of money at the time?
Bernanke suggested that more banks and financial firms are likely to need additional capital injections from the government, and that further guarantees of their debt could be necessary, in return for the federal government receiving further equity in the firms.
Doesn't this sound like a further move towards a socialized banking system, which I'm thinking must be the intent of the Fed in the long run.
"Everything he's saying is right; we have a lot of tools and we have to use them wisely," said Barry Ritholtz, CEO and director of equity research for research firm Fusion IQ. But Ritholtz added that the bailout has already been mismanaged by the Treasury Department.
Why do we want to put the Treasury Department in charge of more taxpayer funds if the consensus opinion is that they have so poorly managed the original funds? Two wrongs don't make a right. Neither do 700,000,000,000 wrongs.
Bernanke dismissed this risk, however, saying that inflation appears well-contained in the near term. And he said despite the fact that the Fed is taking on much riskier assets than normal as collateral, he does not believe there is a major risk of having those loans go bad.
"The Federal Reserve has never suffered any losses in the course of its normal lending to banks" and Wall Street firms, he said.
Investing 101 tells us that past results should not be considered an indicator of future returns. Just because the Fed hasn't lost money in the past doesn't mean the same will hold true. It seems to me Bernanke has not come to the realization yet that this is a unique problem and the standard solutions are not necessarily going to work again and again.
This has the feel of an out-of-control driver. The car begins to fishtail, the driver over-corrects, and the car skids out of control the other direction. In this case, my biggest fear is that the Fed overreacts and the economy skids out of control in the other direction. In this case, the other direction is inflation.
A good article from CNNMoney about the potential threat of inflation can be found here.
Monday, January 12, 2009
BCS Proposal
Anyone who knows me knows I can't stand the BCS in its current form. It is unfair to smaller conferences, whose participants have no realistic shot at ever vying for a national championship. This year provided the perfect example as the University of Utah went undefeated with wins against Alabama, Michigan, Oregon State, TCU, and BYU. Yet, they never had any chance at playing for the national championship. They may be the best team in the country, but we will never know what they might have done against Florida.
This doesn't work for me. I want a system that gives every team a shot at winning the title. Along those lines, I don't want a team who can't win their own conference have a shot at the title.
What I propose is a 12 team playoff consisting of the eleven conference champions and one at-large (independent) team. We can use the BCS formula to determine the seeding of the playoff, and the playoff will follow the format the NFL uses, with the top four teams having a bye in the first week of the playoffs. This would provide for some very exciting games not only during the playoffs, but also during the regular season as teams fight to win their way into the playoffs.
Again, I challenge anyone to suggest why the current system would be better than my proposal. Good luck.
This doesn't work for me. I want a system that gives every team a shot at winning the title. Along those lines, I don't want a team who can't win their own conference have a shot at the title.
What I propose is a 12 team playoff consisting of the eleven conference champions and one at-large (independent) team. We can use the BCS formula to determine the seeding of the playoff, and the playoff will follow the format the NFL uses, with the top four teams having a bye in the first week of the playoffs. This would provide for some very exciting games not only during the playoffs, but also during the regular season as teams fight to win their way into the playoffs.
Again, I challenge anyone to suggest why the current system would be better than my proposal. Good luck.
Friday, January 9, 2009
BCS
Since Obama considers it important enough to discuss, I am taking the liberty of raging against the BCS in this blog.
I have yet to hear a legitimate argument for why the BCS is a better system than a playoff for determining a national champion in college football. Can someone please explain this to me?
The argument I've heard most often for keeping the BCS is that financially it is most beneficial to the big conferences from a financial perspective. Here's my argument against this:
This year, I watched two out of the five BCS games. And even those two, I only watched portions of the games. Most years, the National Championship game is the only game I care to watch. The rest of the BCS games are pretty meaningless to me, as they really prove nothing. The exception this year is the Sugar Bowl, where I wanted to see my pick for this year's National Champion, Utah, thrash an overrated Alabama team and show just how bogus it is that the BCS does not allow a team like Utah to have an equal opportunity to be the National Champion.
Compare that to the NFL playoffs. I will generally watch about 8 out of 11 of the NFL playoff games each year. I would watch all 11 each year if I had the time and I wasn't busy with other commitments. The reason for my interest in the playoffs is that every win leads each team closer to the Super Bowl. Every team in the playoffs has a shot at winning. That's what makes it fun.
If the BCS moves to playoff system of some sort, it will certainly expand the number of games I, as an average football fan, would be interested in watching. More viewers for more games would certainly boost the television revenues the NCAA would generate over what they currently rake in. This would be good for the big conferences and would be huge for the small conferences.
I challenge anyone to come up with a good reason for not implementing a playoff system in college football.
I have yet to hear a legitimate argument for why the BCS is a better system than a playoff for determining a national champion in college football. Can someone please explain this to me?
The argument I've heard most often for keeping the BCS is that financially it is most beneficial to the big conferences from a financial perspective. Here's my argument against this:
This year, I watched two out of the five BCS games. And even those two, I only watched portions of the games. Most years, the National Championship game is the only game I care to watch. The rest of the BCS games are pretty meaningless to me, as they really prove nothing. The exception this year is the Sugar Bowl, where I wanted to see my pick for this year's National Champion, Utah, thrash an overrated Alabama team and show just how bogus it is that the BCS does not allow a team like Utah to have an equal opportunity to be the National Champion.
Compare that to the NFL playoffs. I will generally watch about 8 out of 11 of the NFL playoff games each year. I would watch all 11 each year if I had the time and I wasn't busy with other commitments. The reason for my interest in the playoffs is that every win leads each team closer to the Super Bowl. Every team in the playoffs has a shot at winning. That's what makes it fun.
If the BCS moves to playoff system of some sort, it will certainly expand the number of games I, as an average football fan, would be interested in watching. More viewers for more games would certainly boost the television revenues the NCAA would generate over what they currently rake in. This would be good for the big conferences and would be huge for the small conferences.
I challenge anyone to come up with a good reason for not implementing a playoff system in college football.
Wednesday, January 7, 2009
New Money
Some of you may be worried about the budget deficit that seems to grow larger and larger by the day. Every time I read an new article, the deficit has expanded again. Now it sits at $1.2 Trillion. That's before Obama's new stimulus package, which could double the deficit.
Where will the money come from?
Taxes will likely increase, regardless of what Obama is telling the people, but tax increases certainly won't make any kind of dent in a deficit like this.
The government will borrow a great deal of money to cover the deficit. Like anyone who possesses a credit card, the US government has a credit limit. It's not an explicitly stated limit, but the credit markets provide that there is an implicit credit limit, where at some point there will be no more investors willing to lend to a government that is so far in debt. While I don't exactly know what that limit might be, I know that point is approaching faster every day.
In the meantime, the last means of covering the budget deficit is to simply print more money. The government continues to dilute the national wealth by printing more dollars. But I don't think we've seen anything yet. If, as I suppose, the US were to reach its credit limit at some future point and could no longer borrow money, the government would run out of options other than to print more money.
An increase in printing money = a decrease in the value of a dollar = an increase in inflation. The faster money is printed, the faster inflation will increase. Should we be frightened?
Where will the money come from?
Taxes will likely increase, regardless of what Obama is telling the people, but tax increases certainly won't make any kind of dent in a deficit like this.
The government will borrow a great deal of money to cover the deficit. Like anyone who possesses a credit card, the US government has a credit limit. It's not an explicitly stated limit, but the credit markets provide that there is an implicit credit limit, where at some point there will be no more investors willing to lend to a government that is so far in debt. While I don't exactly know what that limit might be, I know that point is approaching faster every day.
In the meantime, the last means of covering the budget deficit is to simply print more money. The government continues to dilute the national wealth by printing more dollars. But I don't think we've seen anything yet. If, as I suppose, the US were to reach its credit limit at some future point and could no longer borrow money, the government would run out of options other than to print more money.
An increase in printing money = a decrease in the value of a dollar = an increase in inflation. The faster money is printed, the faster inflation will increase. Should we be frightened?
Sunday, December 28, 2008
Top Ten Issues
My top ten issues facing the nation, in no particular order:
- Economy
- Social Security
- The wars in Iraq/Afghanistan
- Jobs
- Education
- Taxes
- Two-Party System
- Government Corruption
- Health Care
- Housing
Once a week over the next ten weeks, I will write what I title "If I Were President", and discuss what my platform might be in each of these areas if I were going to run for President of the US of A.
Stay tuned.
Tuesday, December 23, 2008
Bailouts for Everyone!!! (Except You and Me)
We're in the midst of a $700 Billion bailout of the financial system. This is a scary large monetary figure. I was against the bailout, as I am very concerned with the lack of accountability for the bad decisions the large banks and mortgage companies made. They should be punished, and the natural punishment is to fail as an ongoing entity.
The car companies are now going to be bailed out to the tune of $17.4 Billion. In the past, this would have seemed like a gargantuan amount. People would have been outraged instead of accepting of the bailout. This bailout could not have happened without the preceding $700 Billion bailout of the banks to take the heat.
Neither of those bailouts scare me the way Obama's proposed stimulus plan scares me.
Both the $700 Billion and the $17.4 Billion bailouts are being spent on "investments". In other words, they consist of loans or capital infusions for which the government receives stock or warrants. The expectation is that some portion of this money will eventually be returned to the government either as interest, dividends, or capital repayment. In the end, the taxpayers will hopefully not be eating the entire price of the bailout.
Now we have the newest proposal, now estimated at $800 Billion, but potentially rising to more than $1 Trillion. The intent of this proposal is to spend money on infrastructure and job creation. There is no explicit means for providing a return on investment. The money will be gone...spent. This is costing every single person in the country close to $3,000. For my family of four, our share is $12,000. I, for one, can not afford that kind of price tag, no matter how beneficial the result will be to the overall health of the country. Luckily, I shouldn't have to pay it all in one lump sum. But I know that I will be paying it with a small tax increase here and a new tax there. It's likely most people won't even realize their money is being siphoned away from them. Ignorance is bliss.
People tell me I'm a glass half empty kind of person. Can you blame me?
The car companies are now going to be bailed out to the tune of $17.4 Billion. In the past, this would have seemed like a gargantuan amount. People would have been outraged instead of accepting of the bailout. This bailout could not have happened without the preceding $700 Billion bailout of the banks to take the heat.
Neither of those bailouts scare me the way Obama's proposed stimulus plan scares me.
Both the $700 Billion and the $17.4 Billion bailouts are being spent on "investments". In other words, they consist of loans or capital infusions for which the government receives stock or warrants. The expectation is that some portion of this money will eventually be returned to the government either as interest, dividends, or capital repayment. In the end, the taxpayers will hopefully not be eating the entire price of the bailout.
Now we have the newest proposal, now estimated at $800 Billion, but potentially rising to more than $1 Trillion. The intent of this proposal is to spend money on infrastructure and job creation. There is no explicit means for providing a return on investment. The money will be gone...spent. This is costing every single person in the country close to $3,000. For my family of four, our share is $12,000. I, for one, can not afford that kind of price tag, no matter how beneficial the result will be to the overall health of the country. Luckily, I shouldn't have to pay it all in one lump sum. But I know that I will be paying it with a small tax increase here and a new tax there. It's likely most people won't even realize their money is being siphoned away from them. Ignorance is bliss.
People tell me I'm a glass half empty kind of person. Can you blame me?
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