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Friday, January 30. 2009
Every day I feel more steamed about this "stimulus." This is no stimulus. Dear readers, we are in the process of getting scammed, hoodwinked, tricked - in a way that Bernie Madoff could only dream about doing in his wildest dreams. The statists are literally trying to pull a fast one over on me. It's the biggest money and power grab since Lyndon Johnson, and nobody knows all of the details, implications, or the long-term consequences - not to mention the undiscussed or unintended (or quietly-intended) consequences.
It's a trickster's delight. Are we such easy marks? I hope not. They hope most of us are uninformed morons and will defer to their superior wisdom. The House bill goes far beyond the usual pork. It changes the role of the federal government in our lives, and is intended to do so. This is no short-term stimulus for an ugly recession; this is long-term change via centralization of power and money using today's fears about the economy as a convenient excuse.
Why is it long-term? Heck, it's not just long-term; this stuff is forever. How difficult is it to "cut" a program? Well, no more difficult than trying to take a lollypop out of a kid's mouth. The socialist ratchet wrench has no reverse setting.
Yes, I am not pleased with hopey-changey thus far.
From WSJ's Look at the Time:
How big is the "stimulus"? Bigger than any program or war in history.
The stimulus will undo two decades of welfare reform.
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Are we such easy marks?
Are you kidding? Have you spoken with an average voter recently? Gawd, are they easy marks. And there are millions of them, all the same. Easy? Like stealing candy-from-a-baby easy.
The Stimulus Bill -----
What follows are a number of the spending projects included in the economic stimulus bill passed by Democrats.
This is not a complete list. Instead, it is an overview of some of the major items found in this bill in terms of spending. You can make your own judgments about the need for these expenditures.
Feel free to share your thoughts with your elected members of the House and Senate.
You can find the full text of the bill, H.R. 1 at http://www.rules.house.gov/111/LegText/111_hr1_text.pdf
Here is a sampling of what is in the bill:
$44 million for construction, repair and improvements at US Department of Agriculture facilities
$209 million for work on deferred maintenance at Agricultural Research Service facilities
$245 million for maintaining and modernizing the IT system of the Farm Service Agency
$175 million to buy and restore floodplain easements for flood prevention
$50 million for "Watershed Rehabilitation"
$1.1 billion for rural community facilities direct loans
$2 billion for rural business and industry guaranteed loans
$2.7 billion for rural water and waste dispoal direct loans
$22.1 billion for rural housing insurance fund loans
$2.8 billion for loans to spur rural broadband
$150 million for emergency food assistance
$50 million for regional economic development commissions
$1 billion for "Periodic Censuses and Programs"
$350 million for State Broadband Data and Development Grants
$1.8 billion for Rural Broadband Deployment Grants
$1 billion for Rural Wireless Deployment Grants
$650 million for Digital-to-Analog Converter Box Program
$100 million for "Scientific and Technical Research and Services" at the National Institute of Standards And Technology
$30 million for necessary expenses of the "Hollings Manufacturing Extension Partnership"
$300 million for a competitive construction grant program for research science buildings
$400 million for "habitat restoration and mitigation activities" at the National Oceanic and Atmospheric Administration
$600 million for "accelerating satellite development and acquisition"
$140 million for "climate data modeling"
$3 billion for state and local law enforcement grants
$1 billion for "Community Oriented Policing Services"
$250 million for "accelerating the development of the tier 1 set of Earth science climate research missions recommended by the National Academies Decadal Survey."
$50 million for repairs to NASA facilities from storm damage
$300 million for "Major Research Insrumentation program" (science)
$200 million for "academic research facilities modernization"
$100 million for "Education and Human Resources"
$400 million for "Major Research Equipment and Facilities Construction"
$4.5 billion to make military facilities more energy efficient
$1.5 billion for Army Operation and Maintenance fund
$624 million for Navy Operation and Maintenance
$128 million for Marine Corps Operation and Maintenance
$1.23 billion for Air Force Operation and Maintenance
$454 million to "Defense Health Program"
$110 million for Army Reserve Operation and Maintenance
$62 million for Navy Reserve Operation and Maintenance
$45 million for Marine Corps Reserve Operation and Maintenance
$14 million for Air Force Reserve Operation and Maintenance
$302 million for National Guard Operation and Maintenance
$29 million for Air National Guard Operation and Maintenance
$350 million for military energy research and development programs
$2 billion for Army Corps of Engineers "Construction"
$250 million for "Mississippi River and Tributaries"
$2.2 billion for Army Corps "Operation and Maintenance"
$25 million for an Army Corps "Regulatory Program"
$126 million for Interior Department "water reclamation and reuse projects"
$80 million for "rural water projects"
$18.5 billion for "Energy Efficiency and Renewable Energy" research in the Department of Energy. That money includes:
$2 billion for development of advanced batteries
$800 million of that is for biomass research and $400 million for geothermal technologies
$1 billion in grants to "institutional entities for energy sustainability and efficiency"
$6.2 billion for the Weatherization Assistance Program
$3.5 billion for Energy Efficiency and Conservation Block Grants
$3.4 billion for state energy programs
$200 million for expenses to implement energy independence programs
$300 million for expenses to implement Energy efficient appliance rebate programs including the Energy Star program
$400 million for expenses to implement Alternative Fuel Vehicle and Infrastructure Grants to States and Local Governments
$1 billion for expenses necessary for advanced battery manufacturing
$4.5 billion to modernize the nation's electricity grid
$1 billion for the Advanced Battery Loan Guarantee Program
$2.4 billion to demonstrate "carbon capture and sequestration technologies"
$400 million for the Advanced Research Projects Agency (Science)
$500 million for "Defense Environmental Cleanup"
$1 billion for construction and repair of border facilities and land ports of entry
$6 billion for energy efficiency projects on government buildings
$600 million to buy and lease government plug-in and alternative fuel vehicles
$426 million in small business loans
$100 million for "non-intrusive detection technology to be deployed at sea ports of entry
$150 million for repair and construction at land border ports of entry
$500 million for explosive detection systems for aviation security
$150 million for alteration or removal of obstructive bridges
$200 million for FEMA Emergency Food and Shelter program
$325 million for Interior Department road, bridge and trail repair projects
$300 million for road and bridge work in Wildlife Refuges and Fish Hatcheries
$1.7 billion for "critical deferred maintenance" in the National Park System
$200 million to revitalize the National Mall in Washington, D.C.
$100 million for National Park Service Centennial Challenge programs
$200 million for repair of U.S. Geological Survey facilities
$500 million for repair and replacement of schools, jails, roads, bridges, housing and more for Bureau of Indian Affairs
$800 million for Superfund programs
$200 million for leaking underground storage tank cleanup
$8.4 billion in "State and Tribal Assistance Grants"
$650 million in "Capital Improvement and Maintenance" at the Agriculture Dept.
$850 million for "Wildland Fire Management"
$550 million for Indian Health facilties
$150 million for deferred maintenance at the Smithsonian museums
$50 million in grants to fund "arts projects and activities which preserve jobs in the non-profit arts sector threatened by declines in philanthropic and other support during the current economic downturn" through the National Endowment for the Arts
$1.2 billion in grants to states for youth summer jobs programs and other activities
$1 billion for states in dislocated worker employment and training activities
$500 million for the dislocated workers assistance national reserve
$80 million for the enforcement of worker protection laws and regulations related to infrastructure and unemployment insurance investments
$300 million for "construction, rehabilitation and acquisition of Job Corps Centers"
$250 million for public health centers
$1 billion for renovation and repair of health centers
$600 million for nurse, physician and dentist training
$462 million for renovation work at the Centers for Disease Control
$1.5 billion for "National Center for Research Resources"
$500 million for "Buildlings and Facilties" at the National Institutes of Health in suburban Washington, D.C.
$700 million for "comparative effectiveness research" on prescription drugs
$1 billion for Low-Income Home Energy Assistance
$2 billion in Child Care and Development Block Grants for states
$1 billion for Head Start programs
$1.1 billion for Early Head Start programs
$100 million for Social Security research programs
$200 million for "Aging Services Programs"
$2 billion for "Office of the National Coordinator for Health Information Technology"
$430 million for public health/social services emergency funds
$2.3 billion for the Centers for Disease Control for a variety of programs
$5.5 billion in targeted education grants
$5.5 billion in "education finance incentive grants"
$2 billion in "school improvement grants"
$13.6 billion for Individuals with Disabilities Education Act
$250 million for statewide education data systems
$14 billion for school modernization, renovation and repair
$160 million for AmeriCorps grants
$400 million for the construction and costs to establish a new "National Computer Center" for the Social Security Administration
$500 million to improve processing of disability and retirement claims
$920 million for Army housing and child development centers
$350 million for Navy and Marine Corps housing and child development centers
$280 million in Air Force housing and child development centers
$3.75 billion in military hospital and surgery center construction
$140 million in Army National Guard construction projects
$70 million in Air National Guard construction projects
$100 million in Army Reserve construction projects
$30 million in Navy Reserve construction projects
$60 million in Air Force Reserve construction projects
$950 million for VA Medical Facilities
$50 million for repairs for military cemeteries
$120 million for a backup information management facility for the State Department
$98 million for National Cybersecurity Initiative
$3 billion for "Grants-in-Aid for Airports"
$300 million for Indian Reservation roads
$300 million for Amtrak capital needs
$800 million for national railroad assets or infrastructure repairs, upgrades
$5.4 billion in federal transit grants
$2 billion in infrastructure development for subways and commuter railways
$5 billion for public housing capital
$1 billion in competitive housing grants
$2.5 billion for energy efficiency upgrades in public housing
$500 million in Native American Housing Block Grants
$4.1 billion to help communities deal with foreclosed homes
$1.5 billion in homeless prevention activities
$79 billion in education funds for states
Damn Barrett. Nice work.
Though you will have wrecked my blood pressure I'm sure.
What, no measly little $300K for KRW? I promise to spend it immediately on construction. I have a lot to build on so the whole 300K would go to employ workers. Think of the workers who will not work if I don't have that 300K to employ them..think of their babies...and their baby mammas...oh, the humanity!
>>>Wall Street didn’t have Obama’s chutzpah. And it didn’t do nearly the damage to the nation that this bill will do.
Yeah, well, don't speak so soon. Wall Street is apparently emboldened by the apparent success of this appropriations bill; TARP II is presently working its way through the House Finances Cmte.
The most frightening thing about that is how nebulous most of the items are. "$700 million for "comparative effectiveness research" on prescription drugs" ??
This is the kind of stuff that makes your fingers shake the tiniest little bit. It's incomprehensible.
Spot on! Most of this is so nebulous that it can be spent on anything and directed almost anywhere. It's the trillion payback plan for getting the Democrats and Nobama elected.
The Democrats have no shame, no conscience and no morals. (I think it is immoral to steal from future generations for current consumption like this.) I also think this bill will do little to increase employment and the Democrats will then call for more spending and blame "free" markets.
Regarding the GDP report on Friday, the biggest disappointment in the report involves inventories. If inventories had declined to keep the inventory to sales ratio constant, the report would have been more encouraging. Firms will continue to reduce production until sales begin to draw down inventories. That will be a key signal that a bottom in macro-economic terms has occurred, all things being equal. The inventory build means that the economy will contract further in the first, and likely, the second quarter of 2009.
The banking system is technically insolvent. As a result, the financials will continue to shrink balance sheets and the cost of capital will remain high for both debt and equity - if and when it is available. This does not even address what I will call the shadow banking system, which is compromised on non-bank financials, CLOs, hedge funds and the like. The shadow banking system absorbed a lot of the credit generated over the past several years and is also contracting. No meaningful ecomomic expansion has occurred during periods where credit has contracted.
Consequently, corporate earnings will remain under pressure and analyst estimates remain too high.
The actions being proposed in Washington are really designed to enhance the power of government and will have little economic benefit. There is little investment or infrastructure spending. All the government is doing is borrowing long-term to finance short-term consumption. It is more folly.
If the government was serious about spending where there would be a return on investment, the focus would be on (i) upgrading the electrical power grid, (ii) opening regions for oil and natural gas development (e.g. ANWAR, California, Florida and the Atlantic coast) to not only provide resources but to reduce the dependency on foreign oil that accounts for two thirds of the balance of payments deficit and (iii) building a minimum of 1,000 nuclear power plants across the US (even France has figured this one out!).
Massive spending created by borrowing massive amounts of money is no way to solve a problem rooted in too much debt. (Government debt has increased at faster compound annual rate than GDP, meaning that debt in real terms has increased.) Government will screw it up because that's what government does.
One way to to address employment is to eliminate payroll taxes. This immediately puts cash into the hands of consumers and is beneficial whether the propensity is to spend, save or reduce debt. It also reduces the cost of employment. Corporations, including small businesses, create jobs and business is the key to economic success in America. A permanent tax credit for capital spending in 2009 and 2010 would also help.
Here is an article from Martin Feldstein, an economic heavyweight, who initially supported the stimulus plan but now opposes it because he does not believe it will get the intended results.
An $800 Billion Mistake
By Martin Feldstein
Thursday, January 29, 2009; Page A19
As a conservative economist, I might be expected to oppose a stimulus plan. In fact, on this page in October, I declared my support for a stimulus. But the fiscal package now before Congress needs to be thoroughly revised. In its current form, it does too little to raise national spending and employment. It would be better for the Senate to delay legislation for a month, or even two, if that's what it takes to produce a much better bill. We cannot afford an $800 billion mistake.
Start with the tax side. The plan is to give a tax cut of $500 a year for two years to each employed person. That's not a good way to increase consumer spending. Experience shows that the money from such temporary, lump-sum tax cuts is largely saved or used to pay down debt. Only about 15 percent of last year's tax rebates led to additional spending.
The proposed business tax cuts are also likely to do little to increase business investment and employment. The extended loss "carrybacks" are primarily lump-sum payments to selected companies. The bonus depreciation plan would do little to raise capital spending in the current environment of weak demand because the tax benefits in the early years would be recaptured later.
Instead, the tax changes should focus on providing incentives to households and businesses to increase current spending. Why not a temporary refundable tax credit to households that purchase cars or other major consumer durables, analogous to the investment tax credit for businesses? Or a temporary tax credit for home improvements? In that way, the same total tax reduction could produce much more spending and employment.
Postponing the scheduled increase in the tax on dividends and capital gains would raise share prices, leading to increased consumer spending and, by lowering the cost of capital, more business investment.
On the spending side, the stimulus package is full of well-intended items that, unfortunately, are not likely to do much for employment. Computerizing the medical records of every American over the next five years is desirable, but it is not a cost-effective way to create jobs. Has anyone gone through the (long) list of proposed appropriations and asked how many jobs each would create per dollar of increased national debt?
The largest proposed outlays amount to just writing unrestricted checks to state governments. Nearly $100 billion would result from increasing the "Medicaid matching rate," a technique for reducing states' Medicaid costs to free up state money for spending on anything governors and state legislators want. An additional $80 billion would be given out for "state fiscal relief." Will these vast sums actually lead to additional spending, or will they merely finance state transfer payments or relieve state governments of the need for temporary tax hikes or bond issues?
The plan to finance health insurance premiums for the unemployed would actually increase unemployment by giving employers an incentive to lay off workers rather than pay health premiums during a time of weak demand. And this supposedly two-year program would create a precedent that could be hard to reverse.
A large fraction of the stimulus proposal is devoted to infrastructure projects that will spend out very slowly, not with the speed needed to help the economy in 2009 and 2010. The Congressional Budget Office estimates that less than one-fifth of the $50 billion of proposed spending on energy and water would occur by the end of 2010.
If rapid spending on things that need to be done is a criterion of choice, the plan should include higher defense outlays, including replacing and repairing supplies and equipment, needed after five years of fighting. The military can increase its level of procurement very rapidly. Yet the proposed spending plan includes less than $5 billion for defense, only about one-half of 1 percent of the total package.
Infrastructure spending on domestic military bases can also proceed more rapidly than infrastructure spending in the civilian economy. And military procurement overwhelmingly involves American-made products. Since much of this military spending will have to be done eventually, it makes sense to do it now, when there is substantial excess capacity in the manufacturing sector. In addition, a temporary increase in military recruiting and training would reduce unemployment directly, create a more skilled civilian workforce and expand the military reserves.
All new spending and tax changes should have explicit time limits that prevent ever-increasing additions to the national debt. Similarly, spending programs should not create political dynamics that will make them hard to end.
The problem with the current stimulus plan is not that it is too big but that it delivers too little extra employment and income for such a large fiscal deficit. It is worth taking the time to get it right.
The writer, an economics professor at Harvard University, is president emeritus of the National Bureau of Economic Research.
The Socialists control all the levers of power: what are you prepared to do?
Atlas Shrugs reported that the the Antifa of Europe now has its equivalent over here: it manifested as the Green Vests who assaulted a New York Post photographer at a NYC "anti-Zionist" rally. We now have the Brown shirts forming and active: what are you prepared to do?
What are you prepared to do at the next demonstration?
The Socialists are obeying only those laws they cannot get around: how many of Zero's picks haven't paid taxes: Daschle was just revealed as not having paid taxes: just after his nomination he paid over 100K in taxes and fines. Zero refused to show his true long form birth certificate and the media - even the opposition media rolled over: so have you: this is no longer a cocktail discussion between friends with different political pov. What are you prepared to do?
There is not going to be a 2010 or 2012 election worth having: WHAT ARE YOU PREPARED TO DO --- NOW!
If nothing then stop the oral masturbation.
I found this at smalldeadanimals, and I would like someone else to give it a once-over and give their opinion.
It was worth the read: it seems dead-on, but I'm not steeped enough in fiscal history to find any holes in it.
TIA if any of you get around to it.
It sure as hell seems to make a lot of sense. Too much sense. I think I might start work on my 'victory' garden this weekend.
Thanks.. and I just realized the post included a paragraph from that same article. I was still enmeshed in the essay, which I had found earlier.
I read this. There are many facts in this article. I agree with some of the argument and some of the conclusions. I do not know if the "how this plays out" part is accurate. There are too many variables to be dogmatic on the how.
The bottom line is we are up to our necks in it and the policies being pursued in Washington are almost certain to not help very much - if at all.
As usual, Washington is focused on the wrong things. (See my comments to Meta.)
The focus needs to be on (i) business, which impacts employment, and (ii) on the financials so that the formation of credit can resume.
The recapitalization of the banks can be done by purchasing the toxic assets from the banks (at what will in effect be at or above market prices. New equity will be required if purchases are done at market prices.)
Washington's plan is a waste. The $800 billion would be better spent on bank recapitalization.
One caveat, I would require that executive management and boards of directors be changed, but not by government. You can't bailout the same people who got us into the mess. We need new management.
Hear, hear njartist: Calling all crooks with Democrat connections! Oh, the larceny that will be taking place, just think of that! So you wanna be a millionaire? A veritable thieves paradise, all under the cover of government stimulus programs. That low level Democrat hack down the street will land some gu'mint contract and presto- he junks the Slaab for a Lexus. It's time for the people to say loud and clear: NO MORE! Start a recall petition drive against any Congressman or Senator who votes for a bill that isn't slashed in half, if not more.
Are we nearing the point of open revolt by the disaffected few holding the bag for all of this? N o recession down Inside The Beltway- have you seen how well these people live?! Top 2 SMSA's in the USA! All with your $$$$! You should be outraged. Amend whatever bill is going to pass with a 10% across the board cut in gu'mint spending- all gu'mint spending, fed, state, local. "We feel your pain"!
We want them to feel our pain. NJartist49 said it right: STOP IT WITH THE ORAL MASTURBATING.
I'm heeding his advice. I am going to DO SOMETHING. I hate crowds so I've decided to get my sniper rifle and shoot liberals from my front porch. heh... Take that... Feel the pain, sucker.
Now , now Meta... We should 'do something.' I agree, and I'd love to improve my shooting skills with my house gun. After all, we have two Muslim families on our block, so how hard could it be? Just kidding. [I've only met the men once, and they're very rude. The women aren't allowed out of the houses.]
But I think we're going to have to do the harder thing, the thing that takes longer but, it is to be hoped, produces better, longer-lasting results. We need to say 'No' and say 'Why' every time one of these tired old socialist ideas surfaces in our everyday life contacts. There are few advantages to being old and having seen it all before, but one of them is being able to say, "hey, that didn't work in the 1930s. What makes you think it will work any better now?" And then give them chapter and verse about past history of failed radical liberal projects.
Barrett just gave us a splendidly appalling listing of the non-stimulus bill's non-solutions to our present situation. John Boehner finally did something worth noticing when he asked, in front of the cameras, what birth control and STD control have to do with stimulating the economy. The overriding mandate the Republicans have right now is to ask awkward questions which illuminate the tawdry Christmas wish list the Democrats are trying to impose on the American people.
The shooting can come later. After all, it would be fellow citizens we would be aiming at, no matter how moonbatty they are.
All of this reminds me of reading Vol I of Robert Caro's inimitable LBJ bio, "The Path To Power" and the discussions therein of the numerous New Deal programs which brought large amounts of government cash to Texas, a commodity in very short supply in Texas in those days, thanks to the manipulations of LBJ, then a mere assistant to Congressman Kleberg.
LBJ learned at the master's knee, FDR, and like so many other Democrats, saw this as "The Main Chance" of a lifetime to cash in, and cash in they did. Same dynamic is at work today, these Democrats have been waiting for years to have the cover needed to ring the cash register like their New Deal heroes.
Rahmbo's unrestrained, Chicago-style, government authorized larceny is about to descend on us. All those community organizers will be driving a Lexus with enough spare cash to buy the bargain condo in FL. That's your stimulus so what's not to like? Bail out real estate and autos, boom, boom. Are we finally near the point of rebellion? What will be the straw that finally breaks this camel's back?
Very nice comment, MM. "No" and "Why". Great place to start. Nice and simple.
GMP. Straw? Good question, many answers. Aside from the economy, I suppose the question to ask is whether or not we are in the deepening of a normal cycle of 'the pendulum swings' or rather, have things really gone to hell in a hand-basket. Makes a difference in morale, knowing the answer to that question.
I think there is a tendency to get caught up in the moment... though we may think ourselves immune to such 'herd' instinct. It is difficult, lately, for me to be 'objective'. But I'm betting that it will have been a normal cycle at the conclusion of this current madness. The worm will turn.
"government authorized larceny" = Redistribution
'For times they are a-changin'
The government is essentially shaking down its citizens with ever greater spending and ever higher taxes.
If the private sector did what the public sector did, we would all be in jail.
Social security comes to mind. It's Bernie Madoff, only legal. think about the hundreds of BILLIONs of unfunded pension plans at the federal, state and local levels. Think about all of the unfunded mandates in the entitlement programs.
Every member of Congress should be in orange jumpsuits.
It really is a travesty.
And to think, I believe the Revolutionary War was fought over a 10% tax rate.
(Just so you know, the top 20% that pays 80% of the taxes is essentially being taxed without representation. Do you think the bottom 50% that pays less than 3% of taxes will vote to increase their taxes or yours and mine? Ben Franklin said that when people realize they can vote themselves money it will be the end of the republic.)
$1 billion for "Community Oriented Policing Services"
I don't think $1B is going to be enough. Have you priced brown shirts lately?!
Ten plus days and still no FDR-like "fireside chat" from The One. All we've heard so far is doom and gloom bordering on the Jimmy Cahtah "national malaise" grand faux pas. Not at all what the leader is s'pposed to do.
Now that O is installed at 1600 Pennsy, he all of a sudden has become "charisma-challenged". We need to see a leader in command with one message: "Together we will do it" instead of the "We won!" message they have been delivering.
Where is the "change" we've been promised? Do you call this pork barrel stimulus bill "change"? Is this what all of those thrifty "Independents" voted for? Looks like business as usual to me and many others as each day goes by. A huge disappointment so far- an "F".
Love your writing.
How about shortening that to 'chimerical'?
The Chimera Rules ..and then slithers back into his subterranean cave to ask, "What do I do next?" as the feeding frenzy begins.