Ever bought something you didn't want?
If so, it usually leaves you with an uneasy, guilty feeling doesn't it?
If you haven't, after President Obama signs the economic stimulus package tomorrow, we/you/I will have bought $787 billion dollars of government debt.
Makes that credit card debt look pretty good now doesn't it?
As the stimulus package looks to socialize healthcare, nationalize banks, create pork-pet projects for Democratic Senators (Harry Reid's railroad and Nancy Pelosi's San Fransico wetlands), and do "more of the same" in education; we/you/I will financially pay for the government to fix what they have helped to destroy for the past 40 years (only now, with the reckless mentality of the Obama Administration).
Numbers to Live By:
Through a recent conversation via e-mail with John Lott, here are some surprising figures for you, me, and the Senate (who haven't even read the 1,000+ page stimulus bill)...
Economic Stimulus Package: $787 billion (which will increase the national debt by 2 trillion dollars)
Current Interest on Current Defecit: $500 billion
Stimulus Interest: 4.5% @ 30 years (estimate)
Projected Stimulus Interest: $716 billion
Total Economic Stimulus Cost w/ Interest: $1.5 trillion
How Will You Pay?:
The average working American will get a $13 tax "credit" for the remainder of the year per work week. That averages out to $676 per year (well, less than that since it is February). However, that number goes to $8 for 2010; therefore, we will receive $416 throughout the year.
However, this tax "credit" does not play into the fact that we will be splitting the bill for the massive stimulus package. The tax brackets and how much we will pay is listed below:
Tax Bracket
$25,000-35,000 (tax bill: $4,697)
$75,000-100,000 (tax bill: $26,250)
$100,000-200,000 (tax bill: $52,500)
$200,000-500,000 (tax bill: $168,750)
Current Deficit + Bank Bailout: 3.7 trillion dollars
Cost per household: $27,000
Cost per household with stimulus expense: $40,000
So, sure, Obama gave 95% of Americans a $676 tax cut for 2009 and a $416 tax cut for 2010 (along with the usual child credit and $500 single tax payer credit), but we are going to be paying off this stimulus debt for decades to come. Also, keep in mind that most of this stimulus spending will take place after almost 18 months.
Instead of looking like a mythical Greek god, Obama has looked more like a Greek tragedy during his first month of office. Hope is not a policy.
1/20/2013: Obama's Last Day
8 comments:
I have my own criticisms of the stim bill (and they are many). You can't want proper oversight and the development of good infrastructure or job-creating programs and expect to start spending your money within a month - it's just not going to happen. The theory behind this is that a recession/depression economy will cost the government huge in tax revenue so a stimulus bill isn't simply throwing money down a black hole. It's purpose is to create jobs, provide an extended safety net to those most hit by recession, relieve the budget burdens of the states, and create some shiny new infrastructure to replace our worn out roads, bridges, and (yes) wilderness trails even. By doing all of this, the government not only hopes to make its citizens happy and content but to increase tax revenue as well because more people are employed earning higher wages.
Does anyone (aside from cynical conservatives) expect Obama to be a Greek god? No. He'll make mistakes, he'll pursue policies even his biggest electoral fans don't like (17,000 more boys to Afghanistan with no real rethinking of our end game or overall strategy reform). Talk about tossing valuable resources down a black hole... I'm not sure you can rate a president that's sat for less than a month as tragic quite yet. He came in with a hell of an economic, domestic, and foreign policy mess on the desk of the Oval Office and now he's got to try to sort this out. The opposition is an extremely important part of democracy, but not when it's self-righteous, obstructionist, and vindictive.
What would John McCain's stimulus have looked like? Massive tax cuts to the top 5-10% of Americans (you know, so they can create millions of jobs for all of us nosepickers in their fancy-pants factories), token tax cuts to the middle class (so we can all go out and finance a television that's too expensive for us), and billions in spending to build 1000 more offshore drilling platforms.
"Generational theft" cracks me up. What's it called when thousands of our men and women in uniform are gunned down or blown up in Iraq, leaving children motherless/fatherless and families broken over a stupid and pointless war based on bad intelligence and even worse foreign policy. How about when other fine souls are gunned down or blown to bits in Afghanistan? (a country we had an actual legitimate right to hold responsible for 9/11 but were too busy pursuing a flawed international agenda to actually provide our military enough boots and support to get the job done.) Let's let them muddle through Afghanistan, so when they die there they were actually dieing so we could hold 150,000+ troops in Iraq.
How about when millions die or are run from their homes abroad? To call a spending bill during a deep recession "generational theft" after blindly supporting our misendeavors and blatant mistakes in the Middle East (which resulted in the deaths of hundreds of thousands at least) is asinine.
Let's temper this recession with a heaping portion of Keynesian economics and then get smart about government spending by trying to get back to the budget situation of the Clinton years. It may be Obama, it may not be. Whoever it is, I hope once this recession is over, they try to whip the deficit with the same passion Obama's trying to whip the recession.
On a related note, let TARP die. Just let it die already. No more money for the wrecked financial system. It can't be rebuilt by government. Let it whine and moan and scream out behind the shed and add the 700 billion to the stimulus bill for something that actually is worthwhile.
P.S. Assuming we start to draw down forces in Iraq by years end or sooner, the Iraq war is going to end up costing $1 trillion. Don't get me wrong, I'm not against any and all military actions just based on their costs. But really? Iraq in 2010. Is that a trillion dollar baby?
Josh,
I am not judging Obama on the stimulus package alone (although I believe it to be an incompetent blunder in terms of governing capabilities), but on numerous misguided acts that deeply question his, and his Administration's, ability to lead. The presidency is not on the job training. There is no time to "practice" and get things ironed out. A person, and Administration, should be extremelly well prepared upon entering the office. That has not happened with this president.
The media is to blame for the "god" concept and declaring him "The One"...(as was portrayed by many of Obama's less than politically savy followers)...thank you Chris Matthews and MSNBC.
From his ill-advised nominations, to signing an executive order to close Gitmo with no clear judicial process in order, to reversing the funds on international abortion groups, to prematurally sending 17,000 troops without an end goal or objective, and FINALLY (all this in 30 days...yikes) to one of the biggest "generational thefts" this country has ever seen (something that lacked research, effective bipartisan debate, citizen review, and alternative options).
I understand, as do most intelligent people, that a stimulus, in some form, is required to "boost" the economy. However, you would have to be mentally inept if you believe and support the passing of this destructive bill. Focusing on job creation, alternative energy, education, TAX CUTS GREATER THAN 35% OF THE BILL...thanks for the $13 dollars a week and $8 next year (the Democrats are completely moronic when it comes to this concept...cut taxes in regards to capital gains and income, the economy naturally moves forward because of increased business growth in both the small and big business sectors), advancements in science, transitioning healthcare to prevention rather than a treating program (this bill removes 10 million people from their own healthcare plans and onto government assisted healthcare plans), etc., etc.
A Republican Senator from SC introduced a plan that would have created double the jobs and cost half as much. Was this alternative even debated? As you, and most of your political allies, complained about Bush's "fear-mongering" tactics...we have a president and a majority of Democratic House and Senate members who have been using words like "catastrophic," "national tragedy," and "economic meltdown" among others. Strictly manipulation in terms of public opinion. If it was so urgent, maybe Obama should have signed it when it passed instead of "vacationing" in Chicago for an extended Valentine's Day weekend. Urgent? Sure, just let me celebrate my love for a few more days. I'm not worried about what John McCain WOULD HAVE done. This entire administration needs to get off the "well, things are so bad because of..." bandwagon and actually grow a pair and get their hands dirty. This isn't the time to point fingers (Obama's first press conference was FILLED with this). You cannot promote change and then stand back like a juvenile and continue the same old ways.
The items included in this bill, and there is no denying that this package is filled with pork and pet projects, is fundamentally, rationally, and morally eroding to the very foundation of what we term a democracy. This bill, although it will create job growth and eventually stimulate the economy, is not the BEST option. For times like this, anything less than the best is moot.
As far as Iraq, I am in support of a war on Islamofacism. You may believe differently, but from my knowledge, evidence, and readings, I believe this to be a true front. So, in my opinion defense is more appealing than the planting of grass in the National Mall and frisbee golf courses in Maryland. Just a thought.
The administration did make a major mistake on the stimulus bill from the start. They drafted it, including compromises to placate Republicans, thinking that the GOP would play ball, bear down, and work to get this stimulus bill passed quickly so relief could start very quickly. They hoped to get 80 senators right off the bat and pass this thing with strong bipartisan support. In a bid to make themselves relevant again, the GOP rejected it outright, paraded around on cable news complaining about $15 million provisions that sounded wasteful but which they really had no idea what was going on (National Mall, which I'm surprised you don't support since it can more normally be found under maintenance of national parks, and the family planning provisions - which c'mon, you want preventive medicine, there you go). They were obstructionist and unwilling to legitimately sit down and work to get a version of this passed that would enjoy broad support. Instead they drafted and "passed" their own GOP bill, with absolutely no semblance of compromise. It was something like 60% tax cuts and was not actually a legitimate attempt at compromise, it was simply the all-GOP version of the bill.
Obama misread the GOP and their desire for a bipartisan stim bill. He should have started at $1 trillion in spending, no tax cuts and worked from there to get what he wanted and make the GOP feel like they actually were doing something. The Dems misread their opponents and yes, that is an administrative failure. Signing the Gitmo order was the right thing to do. He's serious, we're not dilly-dallying. Gitmo costs American lives, is a human rights violation, a stain on American foreign policy, and doesn't keep us safer. We need to kick this in the butt and send the message that the gates are closing for good. The DoJ, State, and Defense now need to get serious about this too. We've got a criminal system to try these people, let's do it. If we can't ring them up with the evidence we should've been able to compile by now - send 'em home to their families or find countries willing to rehabilitate. Send a strong message to the world (especially the Muslim world) and shut down this national shame. If he doesn't move fast and hard on this, nobody will make the hard decisions that need to be made. You make it sound like he signed an order kicking everyone out, putting them back on a plane, and dumping them in Pakistan's border region. Get real.
I can't agree with you more on the 17,000 to Afghanistan. Develop an endgame, figure out what your overall strategic and political goals are in the country and then develop your military strategy. Generals want more troops? They'll get them only if it's in line with our endgame.
Restricting foreign aid for organizations that perform abortions or educate women about the process, risks, and option of abortion is hypocritical and blatantly stupid. They're legal here. It's a political game to restrict funding for good organizations that teach family planning and safe sexual practices. You shouldn't have to be a faith-based organization to get federal funding from the United States government, foreign or domestic.
Graham was the senator to propose his alternative stim bill. Some of its provisions are good (it's still not an actual attempt at compromise, just his own pet project). Why didn't he actually sit down and lead a compromise. Instead of joining a few of his GOP colleagues to work with Dems, he chastized them and threw huge stacks of paper around for some Capitol Hill theatrics. Also, there's no real analysis that the bill would have provided twice the stimulus at half the cost, that's just what Graham asserted. We're both armchair economists. You can't say with any certainty that Graham's plan can do what he claims!
And hey, don't complain about the bill being rushed and not read by congress or the public in one breath and then obama for letting it sit another 24 hours in the next.
It's not a perfect bill. Do I think a better one was possible? Probably. But who knows? Obama was pushing the Dems hard to get something that could start providing relief soon. The Republicans weren't willing to play ball. They wanted to appear relevant. They got hammered in the last elections. Instead of being humbled and taking their rightful place as the vocal opposition, they're vindictive and obstructionist. They want tax cuts and deregulation to fix a budget deficit and financial crisis caused by tax cuts and deregulation.
Planting grass on the national mall, let's look at that. Probably not the BEST example of money being spent from the bill, but the assertion that the entire bill is made up of these little $10 million or so projects is an outright lie. Planting grass, shrubbery, general landscaping, repairing walkways and lighting around national monuments. Hmmmmmm... I wonder if that will take people to do? I wonder if we'll have to pay those people money to do it. I wonder if we'll take bids for that work? C'mon, you put your time in at Parks & Rec. You know how it's done.
Also, Islamofascism. $1 trillion dollars in Iraq (yes, just Iraq - not Afghanistan). That was the best spending of $1 trillion to make us the safest we possibly could have been made? Billions unaccounted for or demonstrably wasted. WE ARE PAYING PEOPLE NOT TO KILL US! It was massively mishandled and tons of lives and dollars were wasted, and hardly a Republican (or a Democrat for that matter) stopped to ask for the administration to define victory, determine an endgame, and exercise some real accountability on what's going on over there. No questions are asked about what men and women in uniform spend money on, but try to spend some money to educate kids on safe sex and half of Congress is up in arms about wasteful spending and pet projects. Remember Paul Bremer, that incompetent goober of a human being? He STILL owes us a bunch of money that he somehow lost while it was sitting on pallets, neatly stacked after coming off a C-130. Where's your GOP heroes on that one? The Iraq War didn't make us safer. The hijackers weren't from Iraq and Iraqis weren't blowing us up before we invaded their country. And it certainly hasn't deterred other Islamic militant groups. Hamas still fires rockets, Hezbollah is extremely popular, the Taliban is kicking NATO's butt all over Afghanistan. We're not safer. The Iraq war did not increase our deterrent profile, it didn't dismantle $1 trillion worth of terrorist infrastructure (the Taliban in the new al-Qaeda, we're right back where we started in the early 90s), and it didn't encourage moderate Muslims to join our side. The Iraqis have a fragile, shaky democracy now. Wonderful (if it lasts and I hope it does). But it just wasn't enough bang for the buck. Sure, they didn't kill us over here, but they certainly became good at killing us over there. For some reason we just dismiss our combat deaths as "heroic and tragic" but don't really ask if it's worth it (for that might render some painful conclusions). And we don't even begin to care to count Iraqi civilian casualties.
Islamofascism? I still think that word is a tragedy of misunderstanding but I'll excuse you and just pretend you mean to say you fear for your family's safety, given the violent capabilities of Islamic terrorists.
Smart, nuanced, just foreign policy is the way to go. Aggressively pursue them where they exist and get smart about working with countries and peoples that can provide us with serious help. We should've gone into Afghanistan with a clear military and political plan, put in the necessary time, troops, and cash and then got out when it became politically feasible. Instead we missed a perfect opportunity to do real good when the administration became obsessed with the Iraq connection.
$1 trillion was too much for the damaged goods we bought in Iraq. That could have been much better spent to make Americans safer. Here's a way we could have spent a trillion dollars to make ourselves safer from Islamic terrorism:
$200 billion to the Lebanese government and civil society institutions (non-Hezbollah affiliated) for economic and social development projects in Beirut and southern Lebanon to undermine Hezbollah's base.
$200 billion for reconstruction and development projects in Afghanistan aimed at bolstering democracy and creating a viable post-Taliban state.
$100 billion to Egyptian civil society organizations (not affiliated with organizations tied to terror). Stipulation that the goverment can get half of that cash if they liberalize and hold fair and open elections (allowing all parties to run) in the next four years.
$300 billion to an Israel/Palestine "peace fund."
$80 billion of that goes to resettling Palestinian refugees in the West Bank or compensating them abroad.
$40 billion goes to relocating half a million Jewish settlers from the West Bank into Israel proper.
$100 billion goes to development of the Occupied Territories (elections monitoring, economic programs, social programs)
$60 billion goes to water and infrastructure development projects used by both Israelis and Palestinians.
Boom, you're left with $200 billion of the trillion you had. Let the military use it to contain Saddam.
Whatever pennies you find leftover, use it to hire competent foreign service employees that know the language of these countries so we can actually start engaging them in a way that doesn't involve jet fighters and tanks.
A trillion dollars in Iraq alone. That was really the best way to protect us from "Islamofascism" (oh dear, it hurts to even type that!)
Josh,
I'm debating...should I laugh or cry in regards to your logic when interpreting the stimulus bill?
Are your views really that skewed and bais? First, you admit fault in the party you support. But, then, in the same breath you lambast GOP House and Senate members who, as a minority, were thrown a political bone with no meat to work with. Obama or the Dems didn't misread the GOP, they simply bullied them into provisions and appeasements to save a "national crisis, catastrophe, and economic meltdown." President Obama, in what was supposed to be a pitch for the stimulus package on national television, couldn't even answer simple questions with straight logic.
There has been no effort for bipartisanship because of a lack in willingness from the GOP, there has been a lack in bipartisanship because it is the same ol' Washington. If you honestly believe that agents of change are nesting in Washington, then you've been stooped by Obama Nation. A majority of those in "leadership" positions who govern us in Washington are the same people who have been "laying down the law" for years. Like I've said a million times, hope and change is not a policy. Obama has nothing new to offer besides a leftist agenda that cyclically repeats itself in the nation's capital.
Graham was not the Senator making the pitch for a new stimulus. It was Senator DeMint and SC Governor Sanford. This provision was sent to the Appropriations Committee, but never reviewed as a viable alternative. One stimulus package was debated on the floor.
One.
What happened to the promise Obama made in 2007 of allowing the American citizen to view the tabled legislation for at least 5 business days? This was a manipulation of a Democratic majority with a reckless mentality that childishly wanted it all, and they wanted it all now. No regard for the implications. No regard for the future. No regard for the economic stability. No regard for anyone but his or her party. That's politics in the Obama White House. If anywone was vindictive and an obstructionist, it was the very people who pushed this bill down the throats of the American people...even if it makes us choke.
"Planting grass on the national mall, let's look at that. Probably not the BEST example of money being spent from the bill, but the assertion that the entire bill is made up of these little $10 million or so projects is an outright lie"
Oh really? An outright lie? Who can prove that? It sure isn't Congress. They do not even know themselves what the bill includes. Some of the stimulus items are so vague that one has to wonder what this money will be used for. Was it put in just to cover a sector? Was it put in to appease a certain agenda? So, yes Josh, a few million here...a few million there. It's questionable and, frankly, irresponsible and pointless. Maybe you will not feel the immediate tax increases because you are a college student...but when you live paycheck to paycheck as a teacher...this is highway robbery.
And yes, great example of the parks. Because we all know how well Jackson has managed its money.
In response to the Iraq issue:
Not sure where you get your figures (or how much accountability it has), but it sounds a lot like the Congress and the President you elected.
Throw money here. Throw money there. Spend! Spend! Spend! It looks great on paper. And by great I mean is there a genie with that bottle? It makes us look like we have a clue. But, does it really? Every single one of those figures is filled with so many generalizations it's incomprehensible.
From your rationale, you seem very inclined to an utopian society. Very pacifist. But, I think you lack a common understanding of realism. Aide, discussions, and money do not solve all problems. Sure, let's try it. But, also understand that everyone doesn't have the same agenda. No one comes to the table to appease an entity for the good of the world. Man is power inclined. And when you have leaders in the Middle East who believe that the "End of Times" theology manifested in a skewed view of a law imposing religion, then rational outcomes might pose to be an obstacle. In fact, many of the problems you and I see today, we will see on the day we die.
Rome wasn't built in a day, but it wasn't destroyed in a day either.
A great quote: "A great civilization is not conquered from without until it has destroyed itself from within." ~William Durant~ Never has this been more true in our eroded society. We are literally watching the self destruction of the United States of America.
I understand that we made some tacticle errors in Iraq and blah, blah, blah, blah, blah. Beat the dead horse already. Terrorism is an inevitable outcome of society. We can either talk about the terrorists feelings and throw money at others to correct the problem. Or, we can realize the struggle. Counter it. And be on the defensive in places that birth this ideology.
It may be a struggle. There may be mistakes. But history doesn't happen in a day. Until people start recognizing the problem...instead of sympathizing with it...we mine as well throw in the white flag of surrender. If we aren't going to fight for freedom, freedom becomes irrelevant.
Some good facts from the Americans For Prosperity Project:
The final bill included billions in outright pork and wasteful spending:
$300 million for buying cars for federal bureaucrats;
$3.7 billion for something called “green research” on military bases;
$50 million for the National Endowment for the Arts;
$2 billion for “neighborhood stabilization” to radical groups like ACORN;
$1.3 billion for Amtrak;
$10 million for"urban canals"
The Road to Government-Run Health Care
$1.1 billion for “comparative effectiveness research” that will establish a federal government board to begin rationing health care by having bureaucrats deciding which medical treatments will be appropriate for which Americans. More info here.
Overturning the Historic Welfare Reform of 1996
$264 billion for direct welfare payments while overturning the historic welfare reform of 1996. The Pelosi-Reid-Obama bill will reward states with federal welfare funds based on the number of people they put on their welfare rolls – a perverse incentive that will in effect give states “bonuses” for adding more people to welfare rolls and work requirements are ignored in this legislation.
$53.6 billion for a "state stabilization fund" otherwise known as a slush fund
This massive infusion of our tax dollars is designed to alleviate the need for genuine budget reform and cutting at the state level.
So, when you hear folks saying this Pelosi-Reid-Obama "stimulus" bill was a "compromise" that cut waste to the bone while focusing only on "shovel ready" priorities, call them on it!
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Spending Stimulus Can't Work
1. Every dollar the government spends comes from the private sector.
Nobel Prize winner Milton Friedman famously said: "there ain't no such thing as a free lunch." Government spending is either financed through higher taxes, higher federal borrowing, or by printing money. Those are the only possibilities. They all create greater economic damage than any stimulus effect of new spending.
● Tax increases lower the incentive to work, save, and invest. There is a strong association between tax increases and reduced economic growth. In an economic crisis, tax hikes should be unthinkable. The Revenue Act of 1932 was one of the major reasons an economic crisis deepened into the Great Depression.
● Government borrowing also takes money out of the private economy—the money that bond purchasers hand over to the government in exchange for the bonds. That money could otherwise be used for business investment that would expand the economy’s productive capacity. If the funds are borrowed from abroad, our exports are lowered because U.S. dollars are being used to buy bonds instead of goods. Borrowed funds also have to be paid back, placing a burden on future taxpayers. Excessive borrowing also may increase interest rates, deepening the credit crisis.
● Inflation may be most damaging financing mechanism of all. If government spends money that it hasn’t taxed or borrowed, then it is literally creating money out of thin air. More dollars being created means that the dollars in our pockets and bank accounts are worth less than they were before. Inflation is a stealth tax that erodes the value of everything and destroys real economic growth.
2. History shows spending stimulus fails.
America experimented with large-scale expansions of government spending in the 1930s with the New Deal and again in the 1960s and 70s with the Great Society. These dramatic expansions of government spending coincided with economic failure. The long-boom that started under Reagan and continued until now with only a couple of brief, mild recessions coincided with a significant decline in federal spending as a percentage of the economy.
3. Infrastructure projects should be judged on their merits, but not as stimulus.
There is a role for government in providing certain public goods that the market cannot efficiently provide. If financing is available at favorable rates it may make sense to take a long-term view and begin projects that are legitimately justified on their merits. We should be under no misconception, however, that public works spending is stimulative, because borrowed dollars are taken out of the private sector.
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