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Obamas Stimulus Bill -
The Fine Print

By Joel Skousen
Editor - World Affairs Brief 
1-30-9
 
With news this week that Boeing, Home Depot, Caterpillar, Sprint, and several other major corporations were laying off thousands (the totals for January will top 150,000), it is easy, if not seemingly imperative, for populist politicians to jump on the bailout bandwagon. So, far the bailouts aren't working--unless you consider bailing out the nation's wealthiest and best connected insiders as the actual purpose of these programs. Each new bailout simply begets another round of bailouts as every sector of the economy takes its turn at the government trough. The adjusted monetary base, according to the St. Louis Federal Reserve Bank has DOUBLED since the bailouts began. That means the value of every dollar in your pocket has essentially been cut in half even if that hasn't yet been reflected in retail prices. It will in time. This is the insidious and hidden inflation tax that always accompanies government deficit spending. Jobless claims have hit a 26-year high and states like Nevada have begun using deliberate delaying tactics to save money by making it hard, if not impossible, for the unemployed to file for unemployment benefits. This is a national scandal in the making.
 
The unemployed in Las Vegas complain that they can't get through on jammed telephone lines to the unemployment office--which, ironically, refuses to deal with anyone in person. Now THAT is a very suspicious policy position, leaving people absolutely no options other than going back to the overloaded phone application system. They must file by phone, and the state has obviously refused to increase either the number of lines available or the number of operators to properly service this avalanche of calls. Nobody knows why and officials are virtually silent. When people finally do get through (typically 5 hours of constant dialing and redialing-- only to discover they must hold for a few more hours), they find they don't get benefits for lost weeks trying to get into the system. Tough luck!
 
Over a week ago, I emailed the director of the Nevada Workman's Compensation system in Southern Nevada to find out why the state has failed to allow timely application, failed to expand the automated system, and refused to allow people to appear in person. I got no reply at all. At least I can surmise that they treat everyone equally bad, even journalists. This kind of bureaucratic arrogance is reminiscent of the old Soviet system. This also looks like grounds for a class action lawsuit.
 
As unemployment rises and the negative spending multiplier continues to shrink the economy, all government wants to do is inflate the currency and/or try to spend its way out of recession. Take a look at the vertical rise in the adjusted monetary base figures put out by the St. Louis Federal Reserve bank: http://research.stlouisfed.org/fred2/fredgraph?chart_type=line&w'=
idth=1000&height=600&preserve_ratio=true&s[1][id]=AMBNS
 
As we are seeing, even that is too little, too late. No matter how many billions the PTB throw at the problem, each month the worsening figures accelerate. Even the appointment of Timothy Geithner to be Treasury Secretary is an affirmation of more of the same rather than change. As World Net Daily pointed out, Geithner, as head of the NY Federal Reserve bank, presided over all of the worst financial debacles of the last year. He was part of the problem.
 
Only Ron Paul of Texas has taken on the evils of Obama's stimulus package head on. He not only decries the entire bailout concept, but points out how the actual bill is full of bad provisions trying to hitch a ride on the stimulus wagon.
 
"This bill is just an escalation of a government-created economic mess. As before, a sense of urgency and impending doom is being used to extract mountains of money from Congress with minimal debate. So much for change. We are again being promised that its passage will help employment, help homeowners, help the environment, etc. These promises are worthless. This time around especially, Congress should know better than to pass anything of this magnitude without first reading the fine print."
 
Congressman Paul presented an abbreviated list of the additions to this bill, to which I have added a more complete list courtesy of one of my subscribers. It all adds up to a lot of "pork."
 
$30 billion to subsidize health insurance for those who lose their jobs
 
$15 billion to increase college Pell Grants
 
$500 tax credits for people who earn less than $75,000
 
$1 billion for Amtrak, the federal railroad that hasn't turned a profit in 40 years
 
$2 billion for child-care subsidies
 
$50 million for that great engine of job creation, the National Endowment for the Arts;
 
$400 million for global-warming research
 
$2.4 billion for carbon-capture demonstration projects.
 
$650 million on top of the billions already doled out to pay for digital TV conversion coupons
 
$30 billion, or less than 5% of the spending in the bill, is for fixing bridges or other highway projects
 
$40 billion for broadband and electric grid development, airports and clean water projects
 
$20 billion for business tax cuts
 
$252 billion is for income-transfer payments -- that is, cash or benefits to individuals for doing nothing at all.
 
$81 billion for Medicaid
 
$36 billion for expanded unemployment benefits
 
$20 billion for food stamps
 
$83 billion for the earned income credit for people who don't pay income tax
 
$54 billion will go to federal programs that the Office of Management and Budget or the Government Accountability Office have already criticized as 'ineffective' or unable to pass basic financial audits (includes Economic Development Administration, the Small Business Administration, the 10 federal job training programs, and many more.)
 
$66 billion more for education (including $335 million for education related to sexually transmitted diseases)
 
$4 billion is allocated to expanding the police state and the war on through Byrne grants and the COPS program, both of which are corrupt and largely ineffective programs.
 
$20 billion would go towards health information technology, which would create a national system of electronic medical records without adequate privacy protection (These records would instead be subject to the misnamed federal 'medical privacy' rule, which allows government and state-favored special interests to see medical records at will)
 
$250 million is allocated for states to nationalize individual student data, expanding Federal control of education and eroding privacy
 
$79 billion bails out states that haphazardly expanded their budgets during the bubble years, but refuse to retrench and cut back, as their taxpayers have had to, during recession years.
 
$200 million expands Americorps
 
$100 million goes to 'faith-and-community' based organizations for social services, which will further insinuate the government into charity and community service.
 
$4 billion for job training
 
$200 million to 'encourage' electric cars
 
$2 billion to support US manufacturers of advanced batteries and battery systems
 
$500 million for energy efficient manufacturing demonstration projects
 
$50 million for the National Cemetery Administration's monument and memorial repairs
 
$2 billion for child-care subsidies
 
$100 million for reducing the danger of lead paint in homes
 
$50 million for NASA facilities that may have been harmed by natural disaster
 
$200 million for the U.S. Geological Survey to monitor earthquakes and volcanoes
 
$70 million for a Technology Innovation Program for 'research in potentially revolutionary technologies' -- government will pick winners and losers
 
$746 million for after school snacks
 
$6.75 billion for the Department of Commerce, including $1 billion for a census.
 
"This bill delivers an additional debt burden of $6,700 to every American man, woman and child. There is a lot of stimulus and growth in this bill - that is, of government. Nothing in this bill stimulates the freedom and prosperity of the American people. Politician-directed spending is never as successful as market-driven investment. Instead of passing this bill, Congress should get out of the way by cutting taxes, cutting spending, and reining in the reckless monetary policy of the Federal Reserve."
 
THE RON PAUL SOLUTION:
 
"Here's what we HAVE to do to solve the problem," says Paul: "1) Let banks and companies fail if they cannot survive on their own 2) Stop inflating asset prices with government purchases and bailouts 3) End the Trillion dollar annual spending to maintain the US Global Empire 4) Bring all our troops and assets home from around the world 5) End the fractional Federal Reserve banking system that caused the hyper asset inflation through pyramid debt 6) Have the US Treasury take charge of our monetary system and create a non debt based system.
 
Former Asst. Sec. of the Treasury Paul Craig Roberts (one of the few who has bucked the system) agrees with this in general when he writes, "The trillions of dollars in credit default swaps (CDS) should be declared null and void. These 'swaps' are simply bets that financial instruments and companies will fail, and the bulk of the bets are made by people and institutions that do not hold the financial instruments or shares in the companies... There is no reason under the sun for taxpayers to bail out gamblers...
 
"To preserve the dollar's status as reserve currency, a credible policy of reducing both budget and trade deficits must be announced. In the near term the budget deficit can be reduced by $500 billion by withdrawing from Iraq and Afghanistan and by cutting a bloated defense budget that represents the now unattainable goal of US world hegemony. The trade deficit can be significantly reduced by bringing off shored jobs back to America [can't be done without a wholesale changing of the labor, environment and tax regulations that drive companies overseas (as much as lower labor costs].
 
"This approach to the economic crisis stands in marked contrast with the approach of the gangsters running US economic policy. The gangsters are using the crisis as an opportunity to steal from taxpayers and to finance their misdeeds and exorbitant salaries with Federal Reserve loans. Their shills among economists and the financial press tell the people that the solution is to fatten up the banks with funds so they will resume lending to an over-indebted public that will then return to the shopping malls. This unrealistic approach to a serious crisis indicates a leadership crisis on top of an economic crisis." It's not a leadership crisis in terms of lack of understanding or lack of competence. This is a conspiracy of greed and power. A little review of the nature of this conspiracy is in order.
 
 
World Affairs Brief = Commentary and Insights on a Troubled World
 
Copyright Joel Skousen. Partial quotations with attribution permitted.
 
Cite source as Joel Skousen's World Affairs Brief http://www.worldaffairsbrief.com
 
World Affairs Brief, 290 West 580 South, Orem, Ut 84058, USA
 

 
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