“Two trillion bucks, and what do you get?”

A golden oldie updated and more relevant than ever.  :)

(HT: Mises Economic Blog)

Mish: “With all due respect, Mr. President…

Here is a fantastic post that is truly a must read, from Mike “Mish” Shedlock of SitkaPacific Capital Management at his Global Economic Trend Analysis blog:

Dear Mr. President, With All Due Respect ….

Dear Mr. President, I read your New Era $3.6 Trillion Budget Proposal. I also listened to your speech Tuesday night. You made a great campaign speech. However, the campaign is over. You won. And the reason you won is you offered hope as well as a promise of change.

With all due respect Mr. President, Tim Geithner and Ben Bernanke are offering the same policies as President Bush and Secretary Paulson. Those policies are to bail out banks regardless of cost to taxpayers. Mr. President, it’s hard enough to overlook Geithner’s tax indiscretions. Mr. President, it is harder still. if not impossible, to ignore the fact that neither Geithner nor Bernanke saw this coming. Yet amazingly they are both cock sure of the solution. Even more amazing is the fact that solution changes every day.

With all due respect Mr. President, Geithner and Bernanke are a huge part of the problem, and no part of the solution and the sooner you realize that the better off this nation will be.

With all due respect Mr. President, your budget proposal is the same big government spending as we saw under President Bush. The only difference is you promised more spending and bigger government, while President Bush promised less government and less spending and failed to deliver on either count.

With all due respect Mr. President, it is impossible to spend one’s way out of a problem, when the problem is reckless spending.

With all due respect Mr. President, you and Congress want to force banks to lend when banks (by not lending) are acting responsibly for the first time in a decade. Mr, President can you please tell us who banks are supposed to lend to? Do we need any more Home Depots? Pizza Huts? Strip malls? Nail salons? Auto dealerships? What Mr. President? What? And why should banks be lending when unemployment is rising and lending risks right along with it?

With all due respect Mr. President, we were hoping your administration would not carry on the war mongering policies of your predecessor. Instead we see amazingly that you Seek $75.5 Billion More for Wars in 2009. Mr. President, do we really need another $75 billion for wars? Was there nothing in the military budget that could be cut?

With all due respect Mr. President, The United States spends more on its military budget than the next 45 highest spending countries in the world combined; The United States accounts for 48 percent of the world’s total military spending; The United States spends on its military 5.8 times more than China, 10.2 times more than Russia, and 98.6 times more than Iran. Isn’t that enough Mr. President?

With all due respect Mr. President, the downfall of every great nation in history has been unsustainable military expansion. Mr. President, the US can no longer afford to be the world’s policeman. You act as if we can. Mr. President, can you please tell us how we can afford this spending?

With all due respect Mr. President, Fannie Mae Reported A Fourth Quarter Loss Of $25.2 Billion. Can you please tell us where you draw the line on taxpayer bailouts of Fannie Mae? Freddie Mac? AIG? Mr. President is there a line anywhere, on anything? If there is, we would appreciate knowing where it is.

With all due respect Mr. President, how can you talk about reducing the budget deficit while proposing the biggest budget in history?

With all due respect Mr. President, how is it possible to talk about reducing health care costs while proposing to increase the health care budget?

With all due respect Mr. President, you have talked about “hard choices”. Can you please tell us what hard choices you have made other than to throw money at every problem? Sure a few programs have changed but Bush orchestrated the biggest Medicaid/Medicare package in history and you upped it. You upped military spending. You criticized McCain for cutting programs that amount to peanuts, and all you can find to cut out of the budget is peanuts.

With all due respect Mr. President, your “Era of New Responsibility” is nothing more than a continuation of the Bush administration Era of Irresponsibility. Mr. President, we hoped for more and deserved more. Yet, behind the charade of campaign messages of hope and change, we essentially see the same fiscal irresponsibility and misguided policies as before. Oh sure Mr. President, your budget priorities have shifted a bit, sadly the irresponsible spending did not.

Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com

Obama: The Sweet-talking Socialist

President Barrack Obama’s speech was masterful last night. Really awe inspiring, and I’m not being sarcastic.  I am conceding a fact, b/c it is Obama’s ability to speak like that that makes him so dangerous.  And what was best about his speech were the few seemingly off-script joking comments he made, that elicited genuine laughs in a place where very little is genuine, but all carefully calibrated show.  (Plus, his “nobody messes with Joe” line was a good one — though also more honest about the frightening truth of state power than anyone wants to admit.)

Two things esp. stood out to me besides his delivery:  First, his many threats of coercion by the State — “I intend to hold … fully accountable”, “we will act with the full force of the federal government”, “I refuse to let that happen”, “[health care reform] will not wait another year” — all meant to indicate resolve but actually betraying the fact that the State governs at the end of a gun, and you will comply or else.  My favorite: “dropping out of high school is no longer an option.”  Really?  Mr. President, exactly what sanctions are you going to throw at those who refuse to go along with your re-education schemes?  What forceful measures are you going to employ against those who would rather not follow your dictate that everyone now MUST “get more than a high school diploma”?

Second, Obama’s promises suffer from that of most politicians, just exponentially more so:  he really wants to eat our cake and have it too.  He “pledged to cut the deficit in half by the end of my first term in office.”  And yet, look where we are and where he wants to take us.  As I write this comment, the “official” U.S. national debt is $10,845,641,002,949.41.  That’s almost 11 trillion dollars.  In Fiscal Year 2008, the U. S. Government spent $412 billion of our money just on interest payments to holders of the national debt.  So, that’s the baseline, which could get dramatically worse if and when interest rates rise.  Further, under Bush the federal budget increased from ~$1 trillion all the way to $3 trillion.  He took us from a $236 billion budget surplus to a current deficit of over $455 billion. So, that’s what we have inherited from the Bush years.

On top of this, Obama-Reid-Pelosi have just passed into law a $790 billion “stimulus” plan that is “not enough.”  And that is outside and above the coming budget, which will surely not decrease one iota. Obama says another bank bailout is on the way.  His remarks strongly suggest another auto bailout is in the works. “[O]ur schools … need more resources.”  He vows to pick winners in the energy market and heavily subsidize them.  Socialized medicine is threatened, er, promised.  Obama vows to continue to conduct costly wars and nation-build, just not so much in Iraq (he suggests an interminable 18 months for withdrawal) but much more so in Afghanistan, where he just sent an additional 17,000 troops to augment the 34,000 already there and sure to double by this summer in his own “surge”.  And his “tax cut for 95% of Americans” is really a handout to a ton of people who don’t pay federal income tax, forcefully redistributed through the tax code from those that do pay.  And he didn’t even address the massive dollars that will be needed to save an insolvent Social Security system.

Obama boasts that he will cut programs that aren’t working, as well as the “waste” that politicians always find a good target in one area while they create more in another.  ”Already,” he says, his administration has “identified two trillion dollars in savings over the next decade.”  Sounds impressive – yet that works to only $200 billion a year – just a fourth the cost of the recent “stimulus” bill that was added on top of our huge mountain of debt.  His promise to “cut the deficit in half” by 2012 is empty.

And then on top of that he makes this promise:  ”we will act with the full force of the federal government to ensure that the major banks that Americans depend on have  … enough money to lend …”  In other words, the Fed and Treasury will be instructed to continue to manufacture huge gobs of money out of thin air, thus continuing that most insidious tax of all: inflation, the devaluing of our dollars and undermining of our purchasing power in the long run. So much for his promise to “save our children from a future of debt.”

Finally, Obama last night repeated the refrain of crisis-mongers everywhere, saying :  “But while the cost of action will be great, I can assure you that the cost of inaction will be far greater.”  When will Americans start holding their leaders accountable for such unsubstantiated, economically-ignorant b.s.?  The more dire the situation, the greater care and deliberation should go into addressing it.  At the very least, we should take great care to not just throw more money after bad and perpetuate the very policies that got us in the mess to begin with, and that have proven abject failures in addressing similar past crises.

Obama is amazingly eloquent. Which means he has a great gift for sweet-talking our country down the road to hell.

The world turned upside down: Good advice from former USSR for USA

Meet Vladimir Putin, defender of free enterprise (at least rhetorically) and spot-on critic of Bush-Obama socialism:

Russian Prime Minister Vladamir Putin has said the US should take a lesson from the pages of Russian history and not exercise “excessive intervention in economic activity and blind faith in the state’s omnipotence”.

“In the 20th century, the Soviet Union made the state’s role absolute,” Putin said during a speech at the opening ceremony of the World Economic Forum in Davos, Switzerland. “In the long run, this made the Soviet economy totally uncompetitive. This lesson cost us dearly. I am sure nobody wants to see it repeated.”[Snip.]

Sounding more like Barry Goldwater than the former head of the KGB, Putin said, “Nor should we turn a blind eye to the fact that the spirit of free enterprise, including the principle of personal responsibility of businesspeople, investors, and shareholders for their decisions, is being eroded in the last few months. There is no reason to believe that we can achieve better results by shifting responsibility onto the state.”

Putin also echoed the words of conservative maverick Ron Paul when he said, “we must assess the real situation and write off all hopeless debts and ‘bad’ assets. True, this will be an extremely painful and unpleasant process. Far from everyone can accept such measures, fearing for their capitalization, bonuses, or reputation. However, we would ‘conserve’ and prolong the crisis, unless we clean up our balance sheets.”

Find rest of story here.  (H/t: Liberty & Power blog)

A new Tea Party – Chicago Trade revolts against Obama stimulus!

This … is … INSPIRING!  And full of great common sense and abundant truth, too. Just 4+ minutes and well worth your watch.

“Screwing the Country”

Generational theft is a bipartisan phenomenon.

As I’ve been telling anyone who will listen throughout the course of the “stimulus” debate, I’m delighted the Republican congressmen are standing united against this economic depression-inducing bill. But they will only regain credibility for fiscal conservatism after they finally repudiate President George W. Bush — and, in most cases, their own past huge spending ways.

What a Solution!

(from the Economist)

Are You Are An Economy With Performance Issues?

Nothing about “oily discharge” here, but the side-effects can be much worse:  ;)

“We’re moving close to ‘a savior-based economy’”

I like SC Gov. Mark Sanford more every day:

SC Governor: We’re moving close to ‘a savior-based economy’

Posted: 11:04 AM ET

Watch John King’s interview with South Carolina Gov. Mark Sanford.

WASHINGTON (CNN) – As many state and local officials clamor for their share of the billions of dollars in federal aid in the stimulus bill under consideration in Washington, South Carolina’s Republican governor is sounding a note of dissent about federal efforts to help the economy.

“A problem that was created by building up of too much debt will not be solved with yet more debt,” Gov. Mark Sanford said Sunday, making a reference to the federal deficit spending that will likely finance the federal stimulus package.

“We’re moving precipitously close to what I would call a savior-based economy,” Sanford also said Sunday on CNN’s State of the Union.

The South Carolina Republican said such an economy is “what you see in Russia or Venezuela or Zimbabwe or places like that where it matters not how good your product is to the consumer but what your political connection is to those in power.”

“That is quite different than a market-based economy where some rise and some fall but there’s a consequence to making a stupid decision,” Sanford said after pointing to the powers granted to the Treasury Department and the Federal Reserve to help deal with the current economic crisis.

“A lot of people who’ve made some very stupid decisions are being bailed out by the population at large,” he added.

Instead of bailing out failing companies, Sanford told CNN’s John King that the government should let the economy work through the current challenges without intervention.

“We’re going to go through a process of deleveraging,” Sanford said. “And it will be painful. The question is: Do we apply a bunch of different band aids that lengthen and prolong this pain or do we take the band aid off? I believe very strongly: let’s get this thing over with, let’s not drag it on.”

Although Sanford was critical of the federal government’s efforts to get the economy back on track, he equivocated when asked whether he would turn down money in the stimulus package intended for South Carolina which he would control.”

“I think that ultimately we’ll decide that question when we get to it,” the governor said.

The (Even) Great(er) Train Robbery

Dan Flynn is onto something very important about the fatal conceit of Leftist planners of the economy — and particularly their penchant to outguess the market on what constitutes a “just wage” —  in his nice post today, “Other People’s Money”.

But on the larger question of economic interventionism and exploding government spending, the ideological explanation only goes so far.  Especially when you consider that Dubya and the supposedly non-socialist GOP just last fall did what Obama and the gang are trying to do now. 

Many spineless Republicans are going right along with Obama’s plan to “stimulate” the government, er, economy.  Others call “opposition” their alternative plans to do exactly what Obama is doing, just less so and with emphasis on different particulars.  As if indulging in just half the amount of crack cocaine was somehow a better idea.

No, the greater, more full explanation is this: grand theft robbery.  (But does “grand” even apply when we are talking near a TRILLION dollars? What term could apply?)  Whether the Dubyaites or Obamacons, the Democans or Republicrats, their aims are near identical: maintain and build upon the status-Statist quo, and steal as much as possible for their respective friends.

It reminds one of the old cartoons, where one set of train robbers attempts to one-up another set of train robbers.  The irony here is they all say they are doing it to help the train; to get it “back on track” as they say.

No one makes this point better than the esteemed economic historian Robert Higgs at the Liberty and Power blog.  Just wait until you read what loot Obama’s train-robbers are hoping to pilfer this time. 

As Higgs puts it: “Call me old-fashioned, but when I gaze upon all of this booty, I don’t see stimulus; I see rip-off. The Democrats are using the alleged crisis as the pretext for a monumental looting of the taxpayers (present and future) in the service of rewarding – whuda thunk? — the interest groups that put them in power.”