People are just now learning the details of the stimilus bill (aka socialist wish list). Actually, no one had had time to read any of the details when the bill was passed, but then again, it was only 800 billion dollars (unless the Heritage Foundation is correct that the 10 year cost is over 3 trillion). Details have emerged, and as expected, the closer you look the scarier it gets.
Keynesian economics says that massive government spending on infrastructure etc. can prime the pump of an economy. Never mind the fact that it has been tried all over the world and never worked. In reality, this disproved theory has become an excuse for politicians to do what they do best, spend money. Keynes claimed that for every dollar the government spent, there was a "multiplier effect," meaning that each dollar spent produces an increase in national income. If this were true, all we would need is continually increase government spending and thereby create wealth like the world has never known. Actually, a few communist countries did try it. You be the judge of their success.
Even if it did work, only 10% of the stimulus money is being spent on projects Keynes would call stimulative. The other 90% is being spent on social programs and other projects (aka earmarks- but not called that for proganda purposes) which would do nothing for the economy even if the theory they subscribe to were sound. Obama claims it has tax cuts. The biggest reciepients of these imaginary "tax cuts" (aka welfare payments) are people who pay no taxes.
Obama says he will save trillions in government spending. First he plans the largest downsizing of the military since Jimmy- Israel is a terrorist state- Carter. Then he gets creative. He says that his "honest" budget will include the cost of the war, unlike Bush's which did not. He starts off assuming we will spend 180 billion per year for 10 years in Iraq. He further assumes we will leave Iraq in 18 months..Voila..He just saved 1.53 trillion dollars (180 billion per year X 8 1/2 years), and he faced up to the "tough choices." The balance of Obama's "savings," are tax increases. You heard me. In the same way welfare payments are "tax cuts," a social spending bill is a "stimulus" bill," tax increases are now "savings."
Obama says we will halve the defecit by 2013. Of course to do this, he also assumes that the economy will grow 1% this year, 3% next year, and 4% the following 3 years. This is not optimism, it is delusional. It would be hard to achieve in good times, but with the world banking and financial systems in a free fall, anyone believing that type of growth will occur should be instutionalized. We are facing the greatest financial crisis in 70 years, possible including the Depression. The President said we had to pass the stimulus package in a matter of days or make the "crisis into a catastrophe." Yet somehow, miraculously, we will come out of it in a few months and transform into an economy on steroids.
Much of the stimulus money going to the states comes with strings attached. Unemployment extension money is one example. Any state accepting the money is required to make the extension permanent, meaning in a couple of years when the federal money runs out, they will have to fund the program themselves. A few Republican governors said they would consider turning down this part of the money for that reason. Why should they take two years of money when they will be obligated to pay forever? The first liberal reaction was to accuse them of racism, under the theory that many blacks will be affected. That is until some Democratic governers started coming out and saying they would probably do the same thing.
Obama set aside over 600 billion dollars to begin nationalizing healthcare. I can't even imagine how he will try to sell it to us. After all, his creativity with words thus far is beyond my imagination. The insanity of nationalization will be discussed in a future blog, but for now, just remember that he is selling a program that has never worked in any western nation in the world. Every one where the government took over health care had costs go up and quality and service go down.
Another "project" Obama is working is cap and trade. It is a system of taxes on industries that produce carbon dioxide, the major one being energy. In reality it is a simple energy tax, and it will clearly bankrupt the coal industry (he said he intended to do exactly that during the campaign.) The President claims thousands of new green jobs will be created (aka new government workers and academic research grants producing nothing of value but plenty of Democratic voters), energy costs will go down, and all will be at peace in the world. Such a fantasy would make Walt Disney proud. Early estimates indicate it will cost an average family of four about $1,400 per year, but of course we know the total costs will go way beyond that.
Do any of you out there who voted for Obama have buyers remorse yet? You shouldn't be surprised at what he has done. Our President is the child of two communists (his mother being a registered member of the communist party, and his father promoting communist ideology in his home country of Keyna), his most important mentor (Sol Olinsky) was head of the Communist Party in America, his spiritual mentor (Reverend Jeramiah Wright) is a radical, America hating racist, and his political mentor (William Ayers) is an America hating terrorist.