January 10, 2009

Obama's $800 Billion stimulus plan a waste of money

Obama and his team of financial advisers have released a 14 page summary of their $800 billion stimulus plan, you can see it here.

What a waste of money this $800B stimulus plan will be! On page 5 there is a chart that estimates what the unemployment rate will be with or without the plan out through the end of 2013. The difference in peak unemployment is a mere 1%! (8% in 2009 vs 9% in 2010). Is that all that they admit $800 billion will do?

Also in 2013 they have unemployment at about the same rate, 5.5%, after a steep (and optimistic) fall in 2011 & 2012. If the rate is going to be the same with or without the spending, why bother? Just ride the storm out.

The problem is they still don't understand the reasons for the (financial) storm itself, or if they do, still won't admit it in public. Basically, they (the Federal Government) caused it themselves, when they passed banking deregulation that lead to financial over leveraging, and creating a housing market bubble that finally burst when loans couldn't be repaid.

So now we have an exploding budget deficit, a $700 billion undeserved bank bailout (half has been given to the bankers who have hoarded it instead of loaned it as was intended), and a debt to GDP ratio that is approaching an all time high.

This HAS to stop this decade! In 2017 FICA taxes (Social Security & Medicare), currently providing a "surplus" (meaning the total deficit/debt would be WORSE without it!) will also start running a deficit. This combination of wasted spending now and the needed spending in the future will likely result in a debt so high that foreigners will stop financing it, and stop buying our T-bills & Bonds. That's when the bill will finally come due, and with it, the likely death of the USA as we now know it.

1 comment:

Dr.D said...

The "stimulus" was never about unemployment or any of the other stated goals. It was about creating government dependency in ever greater numbers of Americans, and it going to succeed in that objective. The real objective is to cripple America's independent spirit, the idea that we can take care of ourselves, and replace it with an attitude of dependence that says we must be cared for by a paternalistic, all-powerful government. This is a major step towards socialism, the real goal of BO and his backers.