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Author Topic: Why Obama Should End the Bailouts  (Read 1954 times)
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WhiskeyGirl
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« on: January 07, 2009, 11:28:55 AM »

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Why Obama Should End the Bailouts

January 07, 2009 08:13 AM ET | Rick Newman

Now that he's looked closely at the numbers, Barack Obama wants Washington to show some spending discipline. After his gargantuan stimulus package, that is. "We've got trillion-dollar deficits for years to come," he said recently. "We're going to have to bring significant reform ... to the overall budget process.... We'll have to make tough choices, and we're going to have to break old habits."
(transcript.)

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Here's one way he could start breaking old habits: Cancel the second half of the $700 billion bailout package passed last year.

Bailout baron Henry Paulson, President Bush's Treasury Secretary, has drawn intensifying criticism for his handling of the misnamed Trouble Assets Relief Program, which has relieved hardly anybody of their troubled assets. TARP's original mission has morphed into another, and another, with money now going to auto companies, insurance giant AIG, and a handful of banks that haven't even been identified.

If he cancelled the second half, $350 billion, he would be throwing away billions in pork, special interest, earmarks, and paybacks.   

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...real estate developers, retailers, and nearly every interest group in Washington claim that they, too, deserve TARP funds, or else there will be a national catastrophe.

I want my $1 billion because I am a taxpayer and will be burdened for years to come paying higher and higher taxes for these bailouts. 

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Obama should say no. The government's job is to steer a faltering economy back onto the highway, which Obama is planning to do with a gigantic stimulus plan that could total $700 billion or more - in addition to the TARP funds already spent...

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That $350 billion in unspent TARP funds would essentially be borrowed money. It's sitting on the table, for Congress and the administration to spend, like a huge, irresistible gift card. But it will need to be paid back in the future. Leaving it on the table would be a good way for Obama to start showing some fiscal restraint, even as he tees up billions in stimulus spending.

I'm inclinded to believe that the TARP money has gone into a big black hole, or even a simple 'sink hole' with no meaningful return to taxpayer now or in the future.  The black hole / sink hole has not been closed or stabilized, and will continue to be a problem into the future.  Why keep the sucking holes open?  Would it have been more prudent to just let the holes devour themselves?  End the flow of taxpayer money into these doom machines?

http://www.usnews.com/blogs/flowchart/2009/01/07/why-obama-should-end-the-bailouts.html

Bailout money represents taxes that must be paid back at some time.  How and when does Obama plan that they should be repaid?  The governments making those loans to the US will want their money.  The US is broke.  How is Obama planning on paying all this money back?

Maybe hyperinflation?  Wipe out the national debt and the savings of millions of HARD working Americans?
 
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WhiskeyGirl
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« Reply #1 on: January 07, 2009, 11:46:08 AM »

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Homebuilders seek up to $150B in stimulus 

By Silla Brush 
Posted: 01/07/09 11:07 AM [ET] 

Homebuilders are asking for up to $150 billion in the economic stimulus package being drafted by President-elect Obama’s administration and congressional Democrats.

The National Association of Homebuilders (NAHB) is working with 80 of its members to lobby lawmakers on their plan, which includes a mortgage foreclosure reduction effort, a homebuyer tax credit and a temporary program to reduce interest rates.


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The association is supportive of efforts by House Financial Services Committee Chairman Barney Frank (D-Mass.) and FDIC chairwoman Sheila Bair to craft plans to reduce foreclosures, but NAHB wants lawmakers to move on a housing effort in the economic stimulus package — congressional Democrats' top priority.

http://thehill.com/leading-the-news/homebuilders-seek-up-to-150b-in-stimulus-2009-01-07.html

The scariest things about this - from what I've read, there is an excess of house.  People can't sell their homes for what they owe.   Where will they get people to buy?  If the new house someone bought 1 year ago for say $450,000 is only worth $250,000 today, what happened to this difference in the price?  Maybe the new houses they build will my magic cost $200,000 less to build (same or similar quality and materials)?

Did Barney Frank lead efforts to reform Fannie / Freddie back in 2006?  Those efforts failed because some in Congress refused to act.  They didn't see the sky falling and it increasing at an alarming rate.  These are some of the same people in charge today.  If they didn't see the problem coming, it was put right in front of their face, what are the chances they will act in the nation's best interests today?  (little or none?)

The 'youth' of Obama generation will inherit much of this mess.  They're the ones that will be left to change their parents diapers, and maybe that's what it will take for them to wake up.  Where did my parents retirement money go?  All that money they saved, money I was planning to spend as my inheritence?  Where did their nursing home funds go? 

Will they pay attention when the utilities go off and the internet is down?  They cannot afford new computers due to hyperinflation and the collapse of the dollar?  Can't afford to pay for their online games?  Obama may fix that and make sure this generation stays plugged in. 

When will they learn the difference between reality and the internet? 

Maybe they will wake up when the bombs start falling in their back yard and will they wonder why someone isn't doing something?  Obama will soon be in charge and they will have to find a new target for their finger pointing.  Why didn't Obama FIX the military?  It's mighty vexing to to have to commute with all these gaping holes in the roadway...
   

JMHO
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WhiskeyGirl
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« Reply #2 on: January 07, 2009, 12:02:05 PM »

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January 07, 2009

Congressional Budget Office: Forget Stimulus, 2009 Hole Is Already Stunning

A look at the Congressional Budget Office figures for 2009 and 2010 is enough to drive most strong men to despair.

Right at the start the CBO says that the federal government will run a $1.2 trillion deficit in the next fiscal year, That does not include the cost of the new administration's stimulus plan, which could push the total of the red ink to $2 trillion. The figures for bailing out Fannie Mae (FNM) and Freddie Mac (FRE) and the cost of the TARP at $750 are included in the numbers..

Based the CBO assumption GDP will fall 2.2% for calendar 2009

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The agency also forecasts unemployment moving to 9% by 2010.  Unemployment compensation is projected to nearly double from $43 billion to $79 billion to cover rising joblessness.

I think unemployment is already greater than 10%.  People who lost jobs early were forced to take lesser paying jobs to survive.  Now, those lesser paying jobs are at risk.  I do believe, that it's going to get much worse before it gets better.  I'm thinking YEARS.  How many years and future generations will have to pay back all those trillions?

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..Any fiscal conservative in Congress would be able to offer a compelling argument that the US economy, even with a $14.2 trillion annual GDP, can't drag a debt anchor of this size around.

The news also raises the issue of what kind of debt auctions the Treasury will have to run to procure funding. Economists are already concerned that the appetite for US debt is waning. In places like China, which has been a huge net buyer of Treasuries, its own economic slowdown may cut its appetite. And, the larger the amount of money the US asks for, the more it will be perceived that the debt is not "bullet proof" from the standpoint of defaulting

How much of thet $14.2 trillion was equipment and jobs begin outsourced?  Somewhere, in the back of my mind, I believe those numbers are included, I may be wrong.   

I'm also thinking the Chinese anticipated a default by the US and took steps to ensure their debt has greater security.  What comes to mind is that if the US Dollar is no longer the currency of payment, the debt transfers to some other currency and with hyperinflation, the US will NEVER be able to repay it's debt to China.  Anyone else wonder about that?

For some reason, there never seems to be enough good will towards America on Capitol Hill to look out for American interests. 
 

http://www.247wallst.com/2009/01/congressional-b.html

just my humble opinions
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WhiskeyGirl
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« Reply #3 on: January 07, 2009, 02:38:53 PM »

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Nearly 1 million jobs could be created by IT stimulus package, think tank says
Tech group urges Congress to invest $30 billion in IT


An information technology think tank is urging Congress to devote $30 billion toward the IT industry, saying such a move will create or retain nearly 1 million jobs, more than half of them at small businesses.


Quote
Pumping $30 billion into American’s IT infrastructure this year would create 949,000 jobs, 525,000 of which would be in businesses with fewer than 500 employees, ITIF says. The report’s proposed spending would be divided evenly in three areas: broadband networks, health IT and a smart power grid.


How many of these jobs would be for Americans?  How many jobs would go offshore?

Maybe highly educated young people would be competing with highly educated people in India for these taxpayer sponsored jobs?


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ITIF used a liberal definition of jobs created by IT investments in its report. In addition to jobs created directly by new spending, there would also be jobs created in businesses that supply materials necessary materials for infrastructure upgrades – such as circuit boards for routers.


How many "circuit boards for routers" are made in the US?  If there are ANY manufactured, how much of this spending would actually provide employment to Americans?

http://www.networkworld.com/news/2009/010609-it-stimulus.html?t51hb&hpg1=mp

In my mind, just because Congress and the president-elect are SPENDING all this money, DOESN'T GUARANTEE OR ENSURE that ANY of it will provide jobs for Americans. 

Better educated spending and inhalation of taxpayer dollars, enhanced by what they learned in TARP classes... 

just my humble opinions
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WhiskeyGirl
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« Reply #4 on: January 08, 2009, 09:53:27 AM »

Why Obama should end the vortex of spending...

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January 7, 2009, 3:00 PM

Choosing the Right Mechanic for America's Economy: Op-Ed
In an exclusive response to a new Esquire.com column highlighting him and other "anti-bailout" conservatives, the governor of South Carolina offers three reasons why government intervention isn't the answer.


By Mark Sanford


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First, the idea of more "stimulus" as the answer to this crisis approaches the point of flat-out unbelievable. Leaders in Washington told us last spring that things would get better if we just sent $150 billion in stimulus checks. We were told the same as we reached $2.3 trillion spent and committed to various stimulus and bailouts for the year. Now the tab for what's been committed has crossed $7 trillion -- half of the yearly U.S. economy. A group of Democratic governors, meanwhile, recently promised that spending just $1 trillion more would be the answer.

Would Americans continue to frequent the same mechanic if each repair bill increased in cost but got no closer to fixing the problem? Taxpayers are already on the hook for over $52 trillion in unpaid-for political promises. That represents a hidden mortgage of $450,000 per American household, and some of us don't think it's right to bury future generations even further under this mountain of debt.


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Second, be careful which mechanic you visit. Looking forward to what comes next, I've heard seemingly unending opinions from former congressional colleagues -- Sen. Chris Dodd and Rep. Barney Frank foremost among them -- who opposed reform for Fannie Mae and Freddie Mac. Those reforms could have been instrumental in avoiding what we are just beginning to withstand in 2009. If they didn't have the answer then, why do they have it now? This is particularly true since they pushed in the opposite direction. They insisted with others in Congress that Fannie and Freddie and the Department of Housing and Urban Development increase purchases of mortgages -- and lending -- to low-income borrowers, as well as to people who represent poor credit risks. They insisted on specific targets and quotas irrespective of a borrower's ability to repay.


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From the time of the Community Reinvestment Act to the present, Washington -- rather than pure "market forces" -- has driven much of what would come next on housing credit. Despite what today's populists suggest, this was not a simple failure of capitalism. Its opposite, "crony-capitalism," is what paid over $100 million to the connected few who ran organizations like Fannie Mae in Washington. Politics drove a big part of what has happened.


"crony-capitalism" does that mean special interest group?  Campaign contributors?

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Finally, we need to learn from history but not repeat it. While Richardson's version of the Great Depression is interesting, Amity Schales' book The Forgotten Man chronicles its real history, and shows how it became prolonged and worsened by raising taxes and limiting free trade. Depression-era policies of expanding labor union power and increasing spending did little to improve the economy, as we had nearly twenty-percent unemployment in 1939 -- ten years after the stock market crash.


I think the real unemployment/underemployment rate is well over 10% already.  I think Americans need to embrace "fair trade".  Fair trade IS NOT the same as free trade, imo.

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If government spending were the key to preventing recessions, then we'd never have one, since increasing spending is oftentimes the default response from Washington when times are tough.


Good point.  Does spending money = business as usual?  Where is the change?  The new direction?   

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The bottom line is that history indeed suggests that we need to look much more broadly as we attempt to define "economic stimulus." It is more than simply borrowing money and sending out checks of Washington. It is about making sure that our country's finances are on stable ground so that our real source of economic stimulus -- the American entrepreneur -- isn't paying for today's political quick fixes for generations to come.

The American media has often presented stories of people in other nations and places that sell their children for money.  The children end up in slave labor or prostitution and end up cripled or dead before they reach adulthood.  Schooling and healthcare cost money.  In some places they leave the sick to suffer in pain and look away at those left on the side of the road, they die painful slow deaths.  Mother Theresa isn't around to help. 

What is America dong to ensure financial stability for citizens?  Without financial stability, talking about change is meaningless. 

How is the next administration going to feed the homeless, hungry, and those suffering in pain?  How are they going to deal with mass unemployment?  Dollar collapse?  Runaway inflation? 

Why do administrations continue to sell our children and their future?  When will change come to America?

http://www.esquire.com/the-side/opinion/mark-sanford-bailouts-010709

Could Obama focus on providing lasting stewardship for all those things the Bush administration added to the public burden?  Ensure that taxpayer dollars have been well spent?  Bailout recipients aren't ramping up to spend taxpayer or shareholder money on increasing amounts of campaign contributions and bonus programs for board and management bonuses?  Take responsible action for the failures of past?

Ensure that our children have a bright future ahead of them?  A future with real opportunity? 

just my humble opinions

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It doesn't do any good to hate anyone,
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WhiskeyGirl
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« Reply #5 on: January 08, 2009, 01:09:55 PM »

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...the Bailout Party -- whose leaders include George W. Bush, Nancy Pelosi, Hank Paulson, and Barney Frank...

I add Barack Obama to the list too.

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...until last fall, both major parties generally agreed that bailouts for failing companies should be limited and rare...


The nation is bankrupt.  There is no money.  What loan shark has our business today?  Tomorrow?  Something has to change.  The camel's back broke a long time ago.

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Any semblance of frugality seems to be vanishing from Washington culture. Obama wants a so-called stimulus of $775 billion, while Bush's support for bailout upon bailout has stymied Republican opposition. Most Americans oppose handouts; most politicians love them.


There is a long list in the article of folks looking for bailouts.  I'm just asking for $1 billion.  Is my check in the mail yet?

Most taxpayers probably have their money invested in 401ks, not gold...  Any plans to tax gold?  Swallow gold into the government savings plan of Theresa G.?

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...the bailout's cost has ballooned to $8.5 trillion, not counting the $5.2 trillion in Fannie and Freddie guarantees. (To be sure, taxpayers will recover part of that $13.7 trillion, a figure larger than the combined totals of every war this country has ever fought.)


uhhh...right...taxpayers recover...  ???

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...We now know that the House of Representative members who supported a Detroit bailout received 65 percent more auto industry cash than those who didn't. We also know that bailout recipients were big political donors.

This process is toxic to our political system. But unless real opposition to the Bailout Party develops, expect much more of the same.

All this money spent and there is still NOTHING for Main Street.  No investment in new business, no new customers at the beauty shop.  No seeds of change.  There is no wind to carry the seed...  Customers dropping like flies because they have no job, no money, and see no future in 2009...

http://www.cbsnews.com/stories/2009/01/07/politics/otherpeoplesmoney/main4704056.shtml

just my humble opinions
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It doesn't do any good to hate anyone,
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WhiskeyGirl
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« Reply #6 on: January 13, 2009, 07:26:37 PM »

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Budget nominee: Deficits to be bruising for decade
By ANDREW TAYLOR – 4 hours ago

WASHINGTON (AP) — The United States is likely to have bruising budget deficits over the next decade, President-elect Barack Obama's nominee to head the White House budget office said Tuesday.

Peter Orszag, designated by Obama to run the Office of Management and Budget, told the Senate Budget Committee to expect budget deficits equaling 5 percent of the size of the economy for the next five or ten years. That would mean deficits of $750 billion or so over the next couple of years and steadily exceeding $1 trillion by the end of the next decade.

Why not say...NO MORE DEFICITS...NOT ONE...NOT ONE MORE...CHANGE IS REALLY ARRIVED?

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In the past, the prospect of sustained deficits in the range of 5 percent of GDP — or even less — have prompted past administrations and Congresses to embark on painful budget control efforts such as those experienced in the 1980s under President Reagan and former President Bush's 1990 plan in which he broke his famous "read my lips. No new taxes" promise.

...

"That's not acceptable, and it's not sustainable," Sen. Judd Gregg of New Hampshire, top Republican on the budget panel, said of the huge deficits. "We're digging a very, very deep hole that's going to be hard to get out of."

...

Orszag, recently the director of the Congressional Budget Office, said the long-term threat to the economy are the spiraling budget deficit and out-of-control inflation in the health care sector.


I seem to recall an Obama quote somewhere...he suggests that healthcare providers are already being squeezed...what about those that pay for all that healthcare spending?  The inflation of profits?

I imagine, Capitol Hill is digging the biggest hole ever!  Deficit spending - a new treason?


http://www.google.com/hostednews/ap/article/ALeqM5hxNsSwJHL9EJObAjj4qPX_ER166gD95MF1QG0

No new deficits?  When does the party end?  When does the recovery start?  Is it possible to cure an addict by ramping up the availablity of the addictive substance?  Maybe the addiction goes away over and time and no one really understand how addictions work?  jmho
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All my posts are just my humble opinions.  Please take with a grain of salt.  Smile

It doesn't do any good to hate anyone,
they'll end up in your family anyway...
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