Archive for the ‘interest’ Category

The Great Give Away of Taxpayer Money By Bigger and Bigger Government

March 26, 2009

An eager 20 year old student asked me yesterday, “Uncle, who really pays for all this spending?”

“Well, your children and grandchildren, Dear,  I thought you knew,” I said.

This needs time to think in and sink in — since she hasn’t yet started a family….

This is a developing essay that is not yet complete….

So we’ve been wondering about all this Obama spending: what it is and what it means.

The president basically spent $1 billion per day in his first 50 days.

I wonder why we need paid “volunteers” so badly that we now have to pay for them?
 Federal Government Paying “Volunteers” To Teach Liberal Values

“You cannot carry on for ever squeezing the productive bit of the economy in order to fund an unprecedented engorgement of the unproductive bit. You cannot spend your way out of recession or borrow your way out of debt.”  This rings true for Americans even though it wan an admonishment to Britain’s Prime Minister Gordon Brown.
Warning to American Politicians, Via MEP Daniel Hannan to Gordon Brow

I wonder if the crisis in Mexico will mean a huge migration of Mexicans into the states…I mean way huger than ALREADY…and what will that cost?
 Mexico: “under sustained assault”; Could “collapse” — U.S. Military

“Worst-case scenario, Mexico becomes the Western hemisphere’s equivalent of Somalia, with mass violence, mass chaos,” said Ted Galen Carpenter, vice president for defense and foreign policy at the Cato Institute, a Washington-based think tank. “That would clearly require a military response from the United States.”

I wonder why the Pentagon can no longer refer to the “war on terror” and is already trying to figure out how to cut many billions from its budget; while Russia and China rearm?
China boosts military, cyberwarfare capabilities
 Gates readies big cuts in weapons
 Russia Pressing “Reset,” Medvedev Orders Military To Re-Arm
I wonder why ACORN, which gets federal taxpayers money, is hiring protesters with that money to go to the homes of AIG executives?
Did ACORN Organize Protests At Homes of AIG Execs?
ACORN Protesters At Homes of AIG Execs Similar To Lawlessness For UK Bank Exec?

When we make it much more simple to unionize through programs like card check, how will that impact the economy?  Well, FedEx might scrap plans to buy new jets from Boeing and the stimulus might hire many fewer workers….
Stimulus: Way Fewer Jobs Than You Thought

Just Wednesday FedEx said it might back off on billions of dollars of aircraft sales planned to go to Boeing.  The reason?  Card check.  FedEx is worried that fast unionization of its work force will dramatically change its bottom line.

Who benefits from all this U.S. debt?  Who buys our debt and who gets our interest payment?  The answer in one word is China.  The U.S. bailed out Freddie and Fannie with Taxperer money and now China is even buying the houses we once owned…
Chinese find opportunity in U.S. real-estate slump

I wonder how we will pay for “unknown unknowns” like 9-11 and Katrina?  Well, we’ll print more money…..
 Obama, Economy: So Much Uncertainty Spins Off More…. Uncertainty

There are still issues as yet untackled by Obama like immigration.  How will we deal with the vast numbers of illegals ou there?
What do I tell my legal immigrant family and friends?
Obama Believers Thought They’d Hear More On Immigration By Now

Immigration embers could turn into political fire for Obama

La Raza has a new best friend at Justice

I wonder how much our government will grow, what the government will cost us all and what freedoms we’ll lose in this Obama shake up?

There is a mind-set here that Americans can have eveything they want and now and without consequences.

Didn’t that thinking spark this “economic downturn”?

Read Michelle Malkin:


Obama Talks About “Making Hard choices,” But Budget Is “Have It All Now”

In Obama Budget; Interest Payments on Debt Will Surpass Defense Spending

March 24, 2009

Republicans over the past few days have slammed Obama’s blueprint, finding creative ways to express how devastating they say the proposal will be to the nation’s financial standing. 

“They are taking the United States down the road of destruction with the debt and the interest on the debt that our children and our grandchildren are going to have to pay,” Sen. John Ensign, R-Nev., said Tuesday. 

After Sen. Judd Gregg, R-N.H., called the budget akin to “banana republic” fiscal policy on Monday, Republicans argued Tuesday that it would run up deficits so high that the United States would not even qualify for membership in the European Union. 

“This creates for us a higher deficit than Cuba’s,” Senate Minority Leader Mitch McConnell said. “This is not the kind of position we want to put the United States in.” 

Gregg railed on the spending plan over the Congressional Budget Office estimate that the deficits will end up doubling the country’s public debt to 82 percent of its gross domestic product by 2019. 

“To try to put it in a different context, if you take all the presidents since George Washington through George Bush and add up all the debt that they’ve put on the books for the American people, President Obama’s proposal actually equals and exceeds that amount of debt in his first term,” Gregg said Monday. “Staggering numbers when you think about it, just plain staggering numbers.” 

If the borrowing continues as projected, U.S. interest payments will climb rapidly — eventually reaching annual levels comparable to the whopping stimulus package passed last month. 

After three years of deficit spending at projected levels, the interest payments would hit $367 billion in 2013. They would hit more than $500 billion in 2015, soar to $734 billion in 2018, and be more than $800 billion in 2019. 

Sen. Lindsey Graham, R-S.C., noted that the interest costs would total more than what Obama plans to spend on defense. 

Another concern is that China and other nations have been loaning the United States much of the money it needs — and the Chinese recently questioned their investments in U.S. treasury bonds out of concern the U.S. is getting over-extended. 

Senate Democrats are making key changes to Obama’s budget, trimming spending and dropping some parts entirely, to keep it alive on the Hill. 

See Fox News:

Plan to cut mortgage interest deduction stirs opposition

March 14, 2009
Obama’s proposed budget would reduce the tax break for households earning more than $250,000. Some see the plan as targeting real-estate rich states like California and New York.
By Peter Y. Hong
Los Angeles Times
March 14, 2009
The Obama administration’s budget threatens to cut a benefit many Americans view as practically a right — the mortgage interest tax deduction — and powerful real estate interests are fighting back.

The move would affect only households earning $250,000 or more, but opponents say it could prolong the housing crisis by slowing already torpid home sales and deal another blow to home values ravaged by the market crash.

Read the rest:

Obama Spending $1 Billion an Hour of Borrowed Money in First 50 Days

March 11, 2009

“In just 50 days, Congress has voted to spend about $1.2 trillion between the Stimulus and the Omnibus,” Senate Minority Leader Mitch McConnell (R-Ky.) said. “To put that in perspective, that’s about $24 billion a day, or about $1 billion an hour—most of it borrowed. There’s simply no question: government spending has spun out of control.”

And, sadly, the economy has not shown new signs of life…..

On Obama:

“No one wants him to fail,” McConnell, 67, said in an interview. “But saying ‘no’ to bad policy is not saying ‘no’ to everything.”


Senate Minority Leader Mitch McConnell (R-Ky.) has come up with a vivid new way to express his contention that the nation is spending way too much money it doesn’t have.

McConnell includes the tweaks in his opening remarks on the Senate floor on the 51st day that President Obama has been in office.

“In just 50 days, Congress has voted to spend about $1.2 trillion between the Stimulus and the Omnibus,” McConnell says. “To put that in perspective, that’s about $24 billion a day, or about $1 billion an hour—most of it borrowed. There’s simply no question: government spending has spun out of control.”

From Politico:


And where has the Bank Bailout (TARP) money gone?
Ask Cleveland Democratic Rep. Dennis Kucinich.

Kucinich staffers questioned the propriety of an $8 billion Citigroup Inc. loan to Dubai, a $7 billion Bank of America investment in China Construction Bank Corp., and a $1 billion investment in India by J.P. Morgan. The three financial institutions got a total of $120 billion in tax dollars through the bailout program.

Although the transactions are not illegal,  Kucinich questioned the wisdom of directing money to foreign governments rather than the domestic economy.

“How does a multibillion financing deal to Dubai ease the liquidity crisis in the United States of America?” Kucinich asked at the subcommittee hearing. “What about other kinds of uses of funds: corporate spending on lavish parties, the continuation of contractual agreements to pay for naming rights on professional sports stadiums, corporate sporting event sponsorships?”

The memo also cited “significant shortcomings” in Treasury Department oversight over money dispersed through TARP, and claimed the department hasn’t questioned any TARP recipient about its use of the money.

Nancy Pelosi is already saying the nation will need another stimulus bill before we get out of this recession….

The $787 billion economic-stimulus plan was followed by today’s omnibus for $410 billion….

The interest payment on the debt from the stimulus and the omnibus will be about $500 billion…..

Elect me after I promised to end earmarks and “business as usual.”  Priceless?  Hardly.  Hypocracy.  Much of the price will be paid by your children and grandchildren.  John McCain calls that “generational theft.”  Not “priceless.”

President may Ask For “Global Bailout”
Obama, Geithner: recession requires global action 

Even Democrats Showing Signs Of Economic Despair, Worry at White House Inertia

Hypocracy President Signs Omnibus, 9,000 Earmarks, Claims “Honest Budget”

Stimulus Complete: Now Comes New Economic Nightmare in Stagflation?

February 14, 2009

CONGRESS has made a terrible mistake. Amid a rhetorical debate centered on words like “crisis,” “emergency” and “catastrophe,” it acted too fast. While arguments were made about the stimulus bill’s specific components — taxpayer money for condoms, new green cars and golf carts for federal bureaucrats, another round of rebate checks — its more dangerous consequences were overlooked. And now the package threatens a return to the kind of stagflation last seen in the 1970s.

By Paul D. Ryan
The New York Times

To get a sense of the pressures ahead, we must first assess our fiscal health. We started this year with a projected trillion-dollar budget deficit for the 2009 fiscal year. In 2008, we spent $451 billion just to pay the interest on our debt.

With the stimulus bill now becoming law, we’re digging even deeper into debt. The headline price tag of $787 billion doesn’t include the extra $348 billion it will take to finance the new debt, or what it will cost when Congress extends the spending programs in the bill, as is likely — as much as $2 trillion more. Add in the billions that are being used to prop up the financial system, and when the dust settles on 2009, with millions of baby boomers retiring and entitlement spending exploding, taxpayers will face a financial nightmare.

From a global perspective, the picture only looks worse. As we have debated how much money to borrow and spend in hopes of jump-starting our economy, we’ve ignored the worldwide stimulus binge. China, Europe and Japan are all spending hundreds of billions of dollars they don’t have in hopes of speeding up their economies, too. That means the very countries we have relied on to buy our bonds, notably China and Japan, are now putting their own bonds on the global credit markets.

American Treasury bonds have been selling briskly on the global credit markets because they have been the calm in the storm of the global credit crisis. This has allowed advocates of borrow-and-spend to argue that for the United States, borrowing is uniquely cheap. But what happens when there is an excess supply of bonds on the worldwide markets? The cost of borrowing will rise. Today we fear deflation, but eventually our fears will turn to inflation.

A Chinese customer shows off a handfull of hundred-yuan notes ...

It seems that no one in Washington is discussing what happens when the world begins this gargantuan borrowing spree. How high will interest rates rise? And more fundamentally, who will have the money to buy our bonds? It is possible that the Federal Reserve will succumb to pressure to “monetize” our debt — that is, print new money to buy our bonds. In fact, the Fed is already suggesting that it will buy long-term Treasury securities in order to lower borrowing costs. If it does, then our money supply, which has already increased substantially over the past year, will grow even faster.

As Milton Friedman noted, “Inflation is always and everywhere a monetary phenomenon.” It is a situation in which too few goods are being chased by too much money.

To American families, inflation is a destroyer of savings, a killer of wealth, a crusher of confidence. It calls into question the value of our money. And while we all share in the pain, the people whom inflation hits hardest are elderly people who live on fixed incomes, those in the middle class who are struggling to save for retirement and college and lower-income people who live paycheck to paycheck.

Combine high inflation and high unemployment and you have stagflation. Hindsight shows how the pain of the late 1970s and early 1980s could have been avoided, yet we’re now again planning to borrow and spend — and raise taxes — as President Jimmy Carter did. Soon we may again find ourselves watching a rising “misery index” of inflation and unemployment together. If that happens, individual earning power will evaporate, and our standard of living will decline.

Read the rest:

Federal debt obligations exceed world GDP

Stimulus: China Will Fund U.S. Debt But “We Hate You Guys”

U.S. Taxpayers Risk $9.7 Trillion on Bailouts as Senate Votes

February 9, 2009

The stimulus package the U.S. Congress is completing would raise the government’s commitment to solving the financial crisis to $9.7 trillion, enough to pay off more than 90 percent of the nation’s home mortgages.

By Mark Pittman and Bob Ivry
The Federal Reserve, Treasury Department and Federal Deposit Insurance Corporation have lent or spent almost $3 trillion over the past two years and pledged to provide up to $5.7 trillion more if needed. The total already tapped has decreased about 1 percent since November, mostly because foreign central banks are using fewer dollars in currency-exchange agreements called swaps. The Senate is to vote early this week on a stimulus package totaling at least $780 billion that President Barack Obama says is needed to avert a deeper recession. That measure would need to be reconciled with an $819 billion plan the House approved last month.

Only the stimulus package to be approved this week, the $700 billion Troubled Asset Relief Program passed four months ago and $168 billion in tax cuts and rebates approved in 2008 have been voted on by lawmakers. The remaining $8 trillion in commitments are lending programs and guarantees, almost all under the authority of the Fed and the FDIC. The recipients’ names have not been disclosed.

“We’ve seen money go out the back door of this government unlike any time in the history of our country,” Senator Byron Dorgan, a North Dakota Democrat, said on the Senate floor Feb. 3. “Nobody knows what went out of the Federal Reserve Board, to whom and for what purpose. How much from the FDIC? How much from TARP? When? Why?”

Read the rest:

Stimulus: Republicans Have Plan To Help All Current, Future Home Owners

February 3, 2009

The current stimulus plan passed by the House and sent to the Senate leaves “housing pretty much unaddressed,” says Senator Lindsay Graham (R-SC).

“Housing was one of the causes of this mess and the stimulus needs to work that out,” said Republican Graham.

Graham favors a “Housing Trifecta:”

1. Money for the FDIC to hold off future foreclosures.

2.  A $15,000 tax credit for any new home buyers to lessen the glut of unsold houses.

3.  A national offer to renegotiate mortgages at 4%  interest rate, guaranteed.

Graham said this ould provide “an enormous boost to our economy in the short and long term.”

Economic Stimulus About “Soul of America”

January 30, 2009

“The soul of the nation is at stake with this economic stimulus.”

That from Republican Senator Jeff Sessions, of Alabama, an opponent of the president’s economic stimulus bill.

“We’re talking about the largest spending bill in the history of the republic,” Sessions said in a news conference at the U.S. Capitol. “When the $347 billion in interest this bill alone will cost the taxpayers of America over the next 10 years, it amounts to a $1.2 trillion spending package and cost to the taxpayers. We’ve never, ever had anything of that size before in our country’s history.”

“We need to resist this package with every strength that we have,” Sessions said at a press conference in the Capitol with 10 other Republican senators. “Indeed, the financial soul of this country may be at stake.”

“Could I just say that I don’t think the American people yet understand how colossal this legislation is?” Sessions said.

“It would be very dangerous for the states to see this money as free money,” he said.

Sessions was quoted by NPR and the Birmingham (AL) News.

Senator Sessions points out what we see has a long-term economic and foreign policy danger in the stimulus.  The interest alone on the repayment of the $800 Billion (plus) stimulus will exceed $300 Billion — money that will go to whoever buys the Treasury bills to secure the loan.  That will probably be China and oil rich Middle East nations like Saudi Arabia…..

Taking the stimulus now will be like taking heroin.  We might feel good for a time but the detox and rehab will take years….

NPR’s Adam Davidson and Alex Blumberg said it this way:

Prescribing Keynesianism to some politicians is like prescribing crack to a coke addict. In the 1970s, the patient hit rock bottom. The U.S. had high unemployment, and the Keynesian solution stopped working. The national government spent and spent, but unemployment only got worse. Then came inflation, something Keynesians had no answer for.

Davidson and Blumberg point out that Keynesian economic theory — named for John Maynard Keynes — “inspired President Barack Obama’s plan to save the U.S. economy with a massive round of government spending. ”

But the theory has never before been proven out…..

“By the 1980s, many believed Keynes’ ideas were utterly discredited,” Davidson and Blumberg wrote.

John E. Carey
Wakefield Chapel, Virginia

Read this NPR report:

McCain on Bipartisanship in Stimulus, “This Was Not The Way To Start”

Audacity, Hope and Obama’s Spending Stimulus: Once Discredited Theory Gets A Real Try

China Starts to Set Limits On Its Biggest Borrower: Barack Obama and The U.S.

 Get the Feeling Russia and China Are Slicing Up The World and the U.S. Will Be Left Out?

From NPR:

Congressional Republicans find themselves on the receiving end of a White House charm offensive right now. Conversations with a new and popular president may keep even an out-of-power party newsworthy. But disagreeing on policy without being disagreeable in tone poses challenges for the GOP.

Wednesday night’s vote on the economic stimulus bill was remarkably partisan: Not a single Republican voted for the bill, which passed anyway and is now headed for the Senate. But on the eve of the vote, President Obama seemed to expect more support from Republicans.

“We’re not going to get 100 percent agreement, and we might not even get 50 percent agreement,” he said.

In the end, of course, Obama got zero percent agreement. A popular president, an economic crisis and a lot of high-level schmoozing from the White House didn’t move a single GOP member.

A coalition of outside pro-Democratic groups predicted dire consequences for the Republicans. “Political Suicide” was the headline on one e-mailed news release. But Rep. Jim Gerlach wasn’t scared. And if there’s a Republican who should be, it’s him.

“My district is a Democrat district in southeastern Pennsylvania, and President Obama did very well there; he won 58, 59 percent,” Gerlach said.

But Gerlach hasn’t been getting pressure from his constituents. On the contrary, he says the calls and e-mails his office got about the latest economic stimulus bill were “about 3 or 4 to 1 against the bill.”

Gerlach doesn’t rule out supporting the final bill after it gets back from the Senate and a conference committee — if, he says, it includes more tax cuts for small businesses and more money for roads and bridges.

And Gerlach got some high-powered backing Thursday. Conservative economist Martin Feldstein — who gave the White House a big boost when he came out in favor of a huge stimulus — wrote an op-ed in The Washington Post on Thursday calling the bill as currently written an “$800 billion mistake.”

And the man who used to run the House Republican campaign committee, former Rep. Tom Davis, sees absolutely no risk to Republicans who oppose this iteration of the bill.

“For the base, in terms of defining Republicans, a ‘no’ vote here allows you to go back to our old deficit hawk mantra,” Davis said. “I don’t think there’s any downside in voting against that. They may take a little heat today because the polls say one thing, but I guarantee you, 18 months from now, public opinion will have moved somewhere else. And if this doesn’t work, they’re going to look like heroes.”

In the Senate, the bill will change. There’s always more bipartisanship there, where 60 votes are needed to break a filibuster. Already the White House is talking about ways the bill can be “strengthened” — to get more Republican votes.

And when it comes back to the House, some GOP members may get to have it both ways.

“I think there will be some members, particularly in states that are really hard-hit in the Northeast and the Midwest, may end up going along with it, can get bragging rights for this if appropriate modifications are made,” Davis said.

For now, the Republican strategy is to praise President Obama and aim their fire at the House Democratic leadership.

“It was very impressive that he came to the Congress and met with us. He was certainly very forthright,” said Michigan Republican Dave Camp. “But this is Nancy Pelosi’s bill — no input from Republicans, no meetings, no amendments accepted in committee.”

All that praise for the president isn’t just political spin — it’s sincere, Davis said. Obama could end up being more personally popular among House Republicans than his predecessor.

“After Bush, Obama is a breath of fresh air. He’s going to do more entertainment of Republican members, and not just leaders — rank-and-file — over the next two or three weeks than Bush probably did in a year,” Davis said.

As for long-term political calculations, both sides appear to be acting according to their interests. Obama gets a lot of points from the public for trying so hard to change the tone and a lot of goodwill from Republicans for reaching out, and that should help him on future big battles.

Unlike the stimulus, which involves the relatively easy tasks of spending a lot of money and cutting taxes, what comes next — health care, energy and entitlement reform — requires hard political choices and will need big bipartisan support to succeed.

Meanwhile, Republicans in the House reaffirm their principles, reassure their base and get positioned for the next debate. If Republicans said no to everything every step of the way, they could be vulnerable. But no one expects that to happen, as both sides — the president and the congressional minority — settle in to their new roles in the unfamiliar world of civilized partisan warfare.