Now I am not trying to bash Obama but he has to understand that the whole world is watching and listening to everything the leader of the free world is saying. Every time Obama opens his mouth wall street takes another plunge.
I think this is a key difference between Obama and Reagan. When Reagan was confronted with a worse crisis, he was optimistic and spoke of hope and the will of the American people. His words and his actions built confidence into the economy.
Obama on the other hand is stoking fear into the global economic system with everything he is saying and doing. Using people fears of the recession to his advantage, so he can pass every tax hike, social program and payout to his supporters down our throats and we're all drinking the kool-aid.
Check out the two links below:
The first article is concerning Obama's economic plan:
http://www.cnbc.com/id/29434104
The next article is bankers who are urging Obama to shut his mouth:
http://www.politico.com/news/stories/0209/19418.html
Friday, February 27, 2009
Wednesday, February 25, 2009
Government: solution or problem?
I thought I would blog about why I think government should not be the driver but facilitate the recovery.
The US Government can make money in one of three ways.
1) Increase taxes. However, if the government increases taxes on individuals and companies alike there will be less money in the pockets of the people. With less money, people won't buy. When people don't buy, companies layoff, cut salaries and etc. This would prolong a recession.
2) Borrow money. However, borrowing money would only increase our national debt which would increase the crazy amount of interest we are already paying on the trillions of dollars of debt. This would also be a negative impact on the economy.
3) Print more money. However, this would have the negative affect of creating out of control inflation. There would be too many dollars in the system chasing too few goods. This would also have a negative impact on the economy.
The government can only worsen the problem in any scenario. This is why government should facilitate the recovery by allowing the principles of supply side economics to give power back to the American people and not to the government. Money in the hands of small and large business alike will allow companies to reinvest and hire more employees. Reinvestment can create new discoveries in any field such as healthcare and computers which can create an entire new industry which would allow even more people to be employed and create more wealth.
In the short run, government will lose revenue but in the long run revenue will increase because of the scenarios mentioned above. Giving power back to the American people by allowing the innovation and ingenuity of the American mind to take over, will be what takes this country out of the recession and to even greater heights.
It is also worthwhile to mention that anything that the government undertakes incurs great waste and is riddled with inefficiencies. That is why anything that is government owned is slow, inefficient and incurs great losses. The government has no market value on anything they produce because their input is always constant.
The salaries and overhead costs from the government jobs created by the stimulus package will have to be paid for by taxing the very people to whom they are trying to help along with everyone else. Is that productive?
These reasons should be plenty why I think that Obama's stimulus package is wrong for this country and will in the long run hinder growth.
The US Government can make money in one of three ways.
1) Increase taxes. However, if the government increases taxes on individuals and companies alike there will be less money in the pockets of the people. With less money, people won't buy. When people don't buy, companies layoff, cut salaries and etc. This would prolong a recession.
2) Borrow money. However, borrowing money would only increase our national debt which would increase the crazy amount of interest we are already paying on the trillions of dollars of debt. This would also be a negative impact on the economy.
3) Print more money. However, this would have the negative affect of creating out of control inflation. There would be too many dollars in the system chasing too few goods. This would also have a negative impact on the economy.
The government can only worsen the problem in any scenario. This is why government should facilitate the recovery by allowing the principles of supply side economics to give power back to the American people and not to the government. Money in the hands of small and large business alike will allow companies to reinvest and hire more employees. Reinvestment can create new discoveries in any field such as healthcare and computers which can create an entire new industry which would allow even more people to be employed and create more wealth.
In the short run, government will lose revenue but in the long run revenue will increase because of the scenarios mentioned above. Giving power back to the American people by allowing the innovation and ingenuity of the American mind to take over, will be what takes this country out of the recession and to even greater heights.
It is also worthwhile to mention that anything that the government undertakes incurs great waste and is riddled with inefficiencies. That is why anything that is government owned is slow, inefficient and incurs great losses. The government has no market value on anything they produce because their input is always constant.
The salaries and overhead costs from the government jobs created by the stimulus package will have to be paid for by taxing the very people to whom they are trying to help along with everyone else. Is that productive?
These reasons should be plenty why I think that Obama's stimulus package is wrong for this country and will in the long run hinder growth.
Tuesday, February 24, 2009
Random thoughts
I have a few thoughts about Obama's speech. While this post will be large, each point will be short and simple.
First off, is concerning Obama's following comments: "And that is the responsibility to ensure that we do not pass on to them a debt they cannot pay"....Followed by the partisan line "With the deficit we inherited...."
A half truth is really no truth at all. Lets take a deeper look.
1) Obama is slamming the idea of deficit spending as one that is not sound but crazy. He is ready to point the finger at the Bush administration, but all the while the Obama administration is continuing on with even more deficit spending. To be correct, this is the largest spending ever which will bury our children and grandchildren in debt. He can point the finger at Bush as he deserves it, but don't turn around and do the same thing. That just makes you a hypocrite.
2 ) Obama must remember that the deficit he inherited was with a Congress controlled by Democrats for the last couple of years. The deficit grew with the approval of the $700 billion TARP. It was supported by the Democratic controlled Congress and by Obama himself so this deficit was not only by Bush's design. TARP would have been approved regardless of who was in the White House.
I am not saying that the last two years caused all of this. I am merely giving the other side or view point. When Obama uses the phrase "the last 8 years", he must remember a Republican Congress was there for 6 of those 8.
3) Obama asserts the federal government should be the driver of pulling the U.S. out of the recession. He asserts that we need to grow the federal government, but guess what....the federal government did grow under Bush. In fact, USA today reported that spending on social programs, from education to veterans health care, rose faster under Bush than at any time since the 1960s. Federal spending under Bush's administration doubled the federal spending of the Clinton administration.
If federal government is the answer, then why didn't Bush's spending pull us out of the recession by now? The nearly $1 trillion spending bill was a big payout to Democratic supporters such as big unions, ACORN, Global warming wackos and etc. It had little to do with stimulus.
4) Obama stated that things would have gotten worse if the spending package was not approved. However, the Congressional Budget Office (CBO) contradicts this claim. The CBO actually says that the stimulus package will actually have a negative affect in the long run than if he did nothing at all. The CBO said the stimulus package will help in the short run but in the long run there would be so much government debt that it would crowd out investment in the private sector thereby lowering GDP.
5) The claim during his campaign that 95% of working families will receive a tax cut is slick talk. When more than 40% of Americans that don't pay taxes to begin with receive a tax cut, this is called redistribution of wealth. How can you take out from what you didn't put in to? Is it fair to take from others? There are hard working people who pay taxes but are being robbed of their hard earned money by giving it to others who didn't put in.
Now people may be tired of hearing the word "socialism", but this is not socialism. Socialism is where all people work for the common good. Obama's plan is where some people work for the rest of the population. This is much worse.
6) The claim that tax cuts go to the wealthiest two percent is a half truth as well. What people don't talk about is the fact that approximately 10% of the population pays 80% of the taxes. But those of us who pay more taxes, use the same roads, get the same service from police officers as those that don't put in at all. I would say that those top 2% deserve our admiration rather than our scorn.
I have much much more to write, but this blog would go on forever. I hope that people find this information as power to see through half truths and lies.
First off, is concerning Obama's following comments: "And that is the responsibility to ensure that we do not pass on to them a debt they cannot pay"....Followed by the partisan line "With the deficit we inherited...."
A half truth is really no truth at all. Lets take a deeper look.
1) Obama is slamming the idea of deficit spending as one that is not sound but crazy. He is ready to point the finger at the Bush administration, but all the while the Obama administration is continuing on with even more deficit spending. To be correct, this is the largest spending ever which will bury our children and grandchildren in debt. He can point the finger at Bush as he deserves it, but don't turn around and do the same thing. That just makes you a hypocrite.
2 ) Obama must remember that the deficit he inherited was with a Congress controlled by Democrats for the last couple of years. The deficit grew with the approval of the $700 billion TARP. It was supported by the Democratic controlled Congress and by Obama himself so this deficit was not only by Bush's design. TARP would have been approved regardless of who was in the White House.
I am not saying that the last two years caused all of this. I am merely giving the other side or view point. When Obama uses the phrase "the last 8 years", he must remember a Republican Congress was there for 6 of those 8.
3) Obama asserts the federal government should be the driver of pulling the U.S. out of the recession. He asserts that we need to grow the federal government, but guess what....the federal government did grow under Bush. In fact, USA today reported that spending on social programs, from education to veterans health care, rose faster under Bush than at any time since the 1960s. Federal spending under Bush's administration doubled the federal spending of the Clinton administration.
If federal government is the answer, then why didn't Bush's spending pull us out of the recession by now? The nearly $1 trillion spending bill was a big payout to Democratic supporters such as big unions, ACORN, Global warming wackos and etc. It had little to do with stimulus.
4) Obama stated that things would have gotten worse if the spending package was not approved. However, the Congressional Budget Office (CBO) contradicts this claim. The CBO actually says that the stimulus package will actually have a negative affect in the long run than if he did nothing at all. The CBO said the stimulus package will help in the short run but in the long run there would be so much government debt that it would crowd out investment in the private sector thereby lowering GDP.
5) The claim during his campaign that 95% of working families will receive a tax cut is slick talk. When more than 40% of Americans that don't pay taxes to begin with receive a tax cut, this is called redistribution of wealth. How can you take out from what you didn't put in to? Is it fair to take from others? There are hard working people who pay taxes but are being robbed of their hard earned money by giving it to others who didn't put in.
Now people may be tired of hearing the word "socialism", but this is not socialism. Socialism is where all people work for the common good. Obama's plan is where some people work for the rest of the population. This is much worse.
6) The claim that tax cuts go to the wealthiest two percent is a half truth as well. What people don't talk about is the fact that approximately 10% of the population pays 80% of the taxes. But those of us who pay more taxes, use the same roads, get the same service from police officers as those that don't put in at all. I would say that those top 2% deserve our admiration rather than our scorn.
I have much much more to write, but this blog would go on forever. I hope that people find this information as power to see through half truths and lies.
Friday, February 20, 2009
Who is to blame?
It is well known that the sub-prime mortgage crisis is the cause of the current economic crisis. The question to ask is who is to blame? Are we to blame it 100% on George Bush solely based on the fact that it happened under his watch? Some people blame the greed of Wall Street. Where should the blame go? Here are a few things to think about.
Real estate used to be a sure and safe way for banks and people to make money for decades. Then in 1977, Jimmy Carter and the Democratic congress passed the Community Reinvestment Act which basically sought to address discrimination in loans made to different areas or neighborhoods. If data showed that a neighborhood with minorities were discriminated against, then those banks would find lawsuits and federal regulators at their doorstep. This however had nothing to do with discrimination but whether the applicants were loan worthy.
This was based on the premise that lawmakers sitting in Washington knew better how and who should be approved by loans rather than the banks. When these laws were more strictly enforced in the 90's institutions were compelled to provide loans to applicants that otherwise wouldn't receive the loan in the first place. Would any of you loan $100,000 to someone who has a bad credit history? The answer is no, but banks were forced to do the opposite of normal rational thinking.
Those who have a myopic view of the economy will definitely blame the recession and housing crisis on Bush, but risky loans were being made before Bush took office. Things got all screwed up once the government tried to get involved with the free market.
While Bush should share in some of the blame(as well as Alan Greenspan, Bill Clinton, greedy bankers, consumers who took on more debt that they could handle) , it is important to remember that during George Bush's tenure that the nation experienced great prosperity and wealth. There was a period of approximately 6 years of uninterrupted growth. Ronald Reagan was right who recognized government as the problem.
Real estate used to be a sure and safe way for banks and people to make money for decades. Then in 1977, Jimmy Carter and the Democratic congress passed the Community Reinvestment Act which basically sought to address discrimination in loans made to different areas or neighborhoods. If data showed that a neighborhood with minorities were discriminated against, then those banks would find lawsuits and federal regulators at their doorstep. This however had nothing to do with discrimination but whether the applicants were loan worthy.
This was based on the premise that lawmakers sitting in Washington knew better how and who should be approved by loans rather than the banks. When these laws were more strictly enforced in the 90's institutions were compelled to provide loans to applicants that otherwise wouldn't receive the loan in the first place. Would any of you loan $100,000 to someone who has a bad credit history? The answer is no, but banks were forced to do the opposite of normal rational thinking.
Those who have a myopic view of the economy will definitely blame the recession and housing crisis on Bush, but risky loans were being made before Bush took office. Things got all screwed up once the government tried to get involved with the free market.
While Bush should share in some of the blame(as well as Alan Greenspan, Bill Clinton, greedy bankers, consumers who took on more debt that they could handle) , it is important to remember that during George Bush's tenure that the nation experienced great prosperity and wealth. There was a period of approximately 6 years of uninterrupted growth. Ronald Reagan was right who recognized government as the problem.
Wednesday, February 18, 2009
Looking past the rhetoric
The definition of insane is as follows:
Doing the same thing again but expecting a different result.
Under George Bush's watch the national debt grew according to some to more than $10 trillion and a federal deficit estimated this year at $438 billion. George Bush claimed to be a conservative like Ronald Reagan but was not in any way shape or form fiscally conservative. We are PARTLY in this mess because of spending.
And Barack Obama's solution to getting us out of this out of control spending is to....well...increase spending. Therefore, by definition this idea is insane. Obama said the following last week in a press conference that "The American people have rendered their judgment, and now is the time to move forward, not back"
So why is Obama moving back and not forward?
My last thought is about Obama's claim that the spending package will save or create 4 million jobs. Think about this logically. How can you verify that a job was saved? If you go to work tomorrow, can you say that your job was saved? Jobs created and jobs lost are figures which can be verified. It's pretty much a slick politician who in four years will be able to say that his stimulus plan worked. If only 1 million jobs are created, he'll then claim then that an additional 3 million jobs were saved. Who can refute something that can't be verified?
There is hope however. The new stimulus package will create government jobs such as road and bridge construction projects. To all the computer programmers, engineers, lawyers or nurses who may lose their job, there is good news. You can always get a job building a bridge or constructing a new highway. I'm being facetious of course.
What the American people need are real jobs not temporary construction projects. More attention needs to be given to small businesses and have the economic stimulus start from them. I'd rather work for the next Bill Gates or Steve Jobs on an innovative new product (i.e. iphone) rather than from a government work project. It is in the private sector where real wealth will come and this is where the recovery needs to start.
Doing the same thing again but expecting a different result.
Under George Bush's watch the national debt grew according to some to more than $10 trillion and a federal deficit estimated this year at $438 billion. George Bush claimed to be a conservative like Ronald Reagan but was not in any way shape or form fiscally conservative. We are PARTLY in this mess because of spending.
And Barack Obama's solution to getting us out of this out of control spending is to....well...increase spending. Therefore, by definition this idea is insane. Obama said the following last week in a press conference that "The American people have rendered their judgment, and now is the time to move forward, not back"
So why is Obama moving back and not forward?
My last thought is about Obama's claim that the spending package will save or create 4 million jobs. Think about this logically. How can you verify that a job was saved? If you go to work tomorrow, can you say that your job was saved? Jobs created and jobs lost are figures which can be verified. It's pretty much a slick politician who in four years will be able to say that his stimulus plan worked. If only 1 million jobs are created, he'll then claim then that an additional 3 million jobs were saved. Who can refute something that can't be verified?
There is hope however. The new stimulus package will create government jobs such as road and bridge construction projects. To all the computer programmers, engineers, lawyers or nurses who may lose their job, there is good news. You can always get a job building a bridge or constructing a new highway. I'm being facetious of course.
What the American people need are real jobs not temporary construction projects. More attention needs to be given to small businesses and have the economic stimulus start from them. I'd rather work for the next Bill Gates or Steve Jobs on an innovative new product (i.e. iphone) rather than from a government work project. It is in the private sector where real wealth will come and this is where the recovery needs to start.
Saturday, February 14, 2009
From Mr. Hope to Dr. Doom
I thought it was a brilliant campaign that Obama ran. He ran on the premise of hope. People were tired of the past 8 years and wanted change. However, recently Obama's been using words like 'catastrophe' and 'Depression'. Obama has stated that this is the worst economic crisis since the Great Depression, but is this statement really true?
Not really. A great speaker once said "America is at its best when it's not fearful. I mean, if you think about our history, our most shameful times have been when we were afraid." This statement was made by Obama. He compares the current recession to the Great Depression but only to scare people into supporting his spending package.
In fact, the 1982 recession was worse. Unemployment was much higher, the economy was shrinking at a faster rate, house sales took a bigger plunge and interest rates were higher. Let me throw a couple of facts out there.
Unemployment is currently at 7.6%. In 1982, unemployment was at 10.8%. In 1932, unemployment was at 25.2%. The Congressional Budget Office (CBO) predicts that GDP will shrink by 2% in 2009. In 1982, GDP contracted by 1.9%. However, in 1931 GDP contracted by 9%.
The facts prove that 1982 was worse and we are nowhere near the crisis of the Great Depression. Obama needs to be honest with the American people and change his rhetoric back to that of hope and change. People can lie. Fortunately, facts and history don't lie.
Not really. A great speaker once said "America is at its best when it's not fearful. I mean, if you think about our history, our most shameful times have been when we were afraid." This statement was made by Obama. He compares the current recession to the Great Depression but only to scare people into supporting his spending package.
In fact, the 1982 recession was worse. Unemployment was much higher, the economy was shrinking at a faster rate, house sales took a bigger plunge and interest rates were higher. Let me throw a couple of facts out there.
Unemployment is currently at 7.6%. In 1982, unemployment was at 10.8%. In 1932, unemployment was at 25.2%. The Congressional Budget Office (CBO) predicts that GDP will shrink by 2% in 2009. In 1982, GDP contracted by 1.9%. However, in 1931 GDP contracted by 9%.
The facts prove that 1982 was worse and we are nowhere near the crisis of the Great Depression. Obama needs to be honest with the American people and change his rhetoric back to that of hope and change. People can lie. Fortunately, facts and history don't lie.
The Cold Hard Facts
I thought I would write a few thoughts about the new stimulus package as well as some comments made by Obama. I will try to make each point short and simple.
1) Smoke and mirrors:
Obama has recently called tax cuts the "failed theories of the past 8 years" yet he has yet to give an example of a time in history when a government spending spree has taken us out of a recession. The truth is the tax cuts were not responsible for the financial crisis. It was the sub-prime mortgage crisis. In fact, every time in US history when tax cuts were enacted it has been shown that it pulled the U.S. out of the recession.
2) Government spending:
Every time government has tried to spur the economic recovery by increasing spending, it only worsened the problem. Japan tried this in the 90's but per capita income fell and during the 1930's while the increased government spending did help a little, it ultimately hindered growth.
Why on earth would people want government in charge of everything like the banks and healthcare? I have no idea. Have you every went to the Social Security office or any other government agency? Imagine that kind of service at your doctor's office.
3) Recessions and Tax Cuts:
* In 1963, JFK cut taxes. He cut the top marginal personal income tax rate from 91% to 70%.
* In 1983, the Reagan tax cuts were implemented. They reduced the top marginal income tax rate from 70% to 50% and also cut the corporate income tax rate.
* In 2003, President George W. Bush cut the top personal rate from 38.1% to 35%, the dividend rate from 38.1% to 15% and the capital gains rate from 20% to 15%.
Every recession mentioned above was met with tax cuts and every single time the tax cuts were implemented, we were pulled out of the recession and GDP grew.
In this particular case, Obama is trying to confuse people who don't really follow history and the economy. A major part of Obama's campaign was that 95% of Americans will receive a tax cut. If it is a failed theory, why make it a central point of your campaign. He's trying to have it both ways. It's smoke and mirrors. He is trying to blame the tax cuts on the recession but history will prove him wrong.
1) Smoke and mirrors:
Obama has recently called tax cuts the "failed theories of the past 8 years" yet he has yet to give an example of a time in history when a government spending spree has taken us out of a recession. The truth is the tax cuts were not responsible for the financial crisis. It was the sub-prime mortgage crisis. In fact, every time in US history when tax cuts were enacted it has been shown that it pulled the U.S. out of the recession.
2) Government spending:
Every time government has tried to spur the economic recovery by increasing spending, it only worsened the problem. Japan tried this in the 90's but per capita income fell and during the 1930's while the increased government spending did help a little, it ultimately hindered growth.
Why on earth would people want government in charge of everything like the banks and healthcare? I have no idea. Have you every went to the Social Security office or any other government agency? Imagine that kind of service at your doctor's office.
3) Recessions and Tax Cuts:
* In 1963, JFK cut taxes. He cut the top marginal personal income tax rate from 91% to 70%.
* In 1983, the Reagan tax cuts were implemented. They reduced the top marginal income tax rate from 70% to 50% and also cut the corporate income tax rate.
* In 2003, President George W. Bush cut the top personal rate from 38.1% to 35%, the dividend rate from 38.1% to 15% and the capital gains rate from 20% to 15%.
Every recession mentioned above was met with tax cuts and every single time the tax cuts were implemented, we were pulled out of the recession and GDP grew.
In this particular case, Obama is trying to confuse people who don't really follow history and the economy. A major part of Obama's campaign was that 95% of Americans will receive a tax cut. If it is a failed theory, why make it a central point of your campaign. He's trying to have it both ways. It's smoke and mirrors. He is trying to blame the tax cuts on the recession but history will prove him wrong.
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