The View From 1776

Stimulus, Or Squealing Pork?

Only about 12% of the proposed $825 billion stimulus bill will go for purposes that arguably may stimulate job creation.  The rest is additions to standard welfare-state handouts.  More than $265 billion, 32% of the total, is transfer payments, i.e., the government takes $265 billion of your taxes and gives the money to someone else, for a net effect of zero in economic stimulation.

Read the Wall Street Journal’s editorial analysis of the proposed stimulus plan.

Posted by .(JavaScript must be enabled to view this email address) on 01/28 at 02:16 AM
  1. Kissinger and others have said that this crisis is an opportunity that President Obama has to take advantage of. "Take advantage of?" How about reform government to prevent crisis?

    However, to get votes, you need to hand out pork. That, unfortunately, is how business and voting is done in Congress. Joe Scarborough, ex-Congressman spells out in his book, "Rome wasn't burnt in a day," how all the deals are made by the two parties behind closed doors and then they go out and "buy the votes" with pork and appointments and moving a congressman's bill through committee.

    Many congressmen vote for things they don't like or don't want because if they didn't, they couldn't get their own bills out of committee or get a project their state needs or they think their state needs or that rewards the people that funded their campaign.
    Posted by JanPBurr  on  01/28  at  11:29 AM
  2. Joe Scarborough's book that Jan mentions is a good insight into the problem we face--the present legislative system just doesn't work. The best new Congressmen are made relatively ineffective by the established power interersts in D.C.

    Is that the book where Joe talks about the fat white pink boys ? All the hangers-on that man the staffs and committees--whose only goal is to stay in position and milk the government ? As if the lobbyists weren't problem enough !
    Posted by bill greene  on  01/28  at  12:04 PM
  3. One man's "pork" is another man's "job stimulus." If a government bill results in the increased sale of widgets, the owner of the widget factory will be delighted and presumably hire more widget technicians and buy more raw material to make the widgets.

    So, for the Journal to opine that 12% of this bill will stimulate job creation, and the remainder will just disappear into thin air seems like a highly questionable assumption.

    When money ends up in somebody's pocket, it does him no good (unless he is a Silas Marner who enjoys caressing his stacks of coins) until he spends it on something. Now, you can certainly argue that spending should be on substantial things (read "infrastructure") rather than frivolous fluff.
    Posted by .(JavaScript must be enabled to view this email address)  on  01/28  at  12:14 PM
  4. The spending, for the most part, will go to other nations we import from.

    Even the steel used in infrastructure will come in a great part from overseas they said if they don't include a "made in America" requirement and yet, we don't have some types of steel anymore. I don't know if it is the kind we need for this or not, but, we already are forced to import some kinds of steel.

    On other things, even food, we are importing huge quantities and when we stimulate, the money passes to other nations way too much to help us.

    However, they just debated the spending on this stimulus and how much is going to things other than infrastructure and it is huge and much is not beneficial to the economoy.

    Remember that we are increasing not just debt but, interest. We are growing our liabilities faster than assets with these stimulus bills and we can't get rid of them after they are in place without causing a recession.

    We have seen now for decades that each stimulus package does more damage than good because trying end the programs used, causes layoffs, lost profits and lost state and city tax revenues because they used the stimulus to keep spending.

    They find there is noway to transfer from "stimulus economy" to "stable economy" without pain and as soon as the pain appears, voters demand Congress end it.

    Even spending on things that are needed in a stimulus package does damage. Infrastructure has to follow the benefits of productivity, not lead it. Yes, debt does play a role in infrastructure but, it has to be debt that is based on producing things that then can be sold and/or exported to pay for the debt servicing.

    What we are doing can't create enough growth to repay what we are having to put out.

    We can have the most magnificent infrastructure in the world but, if there are not enough companies making things to pay for it, we still lose. We have to have the jobs growing first by bringing back jobs that went overseas and doing what we are doing won't do it. That will take almost total reform of our government and most policies, including tax policies so that we can have higher tax revenues but lower costs of complying with taxes and other reforms.

    Our consumers simply will not support "made in America" as long as they can buy imports cheaper. This is not a stimulus package in reality but a new "debt package" because it increases debt faster than we can grow GDP.

    We have not had a positive GDP year for 8 years and we have been borrowing $5 for each dollar (using manipulated GDP data). So, now we are going to spend what? $8 or $10 to grow GDP only it won't grow. We are negative in GDP now, even in their manipulated reports.

    You can't grow when you consume more than you produce and now, we are rapidly producing even less but going to put infrastructure in place as if there was "increased demand" for infrastructure by business.

    We need goods producing businesses that export to the world.
    Posted by JanPBurr  on  01/28  at  12:47 PM
  5. Bill Greene, been a while since I read it and I don't recall.
    Posted by JanPBurr  on  01/28  at  12:49 PM
  6. Uhmmm..Think maybe there is too much power in washington? Tax, tax, spend, spend, elect, elect. The 'stimulus' going to ACORN seems prudent, wise and perfectly fraudulant. Taxpayer money for abortions is nice too. The bums are having a resurgence. It's a new day!
    Posted by .(JavaScript must be enabled to view this email address)  on  01/28  at  12:57 PM
  7. I wish The View would acknowledge the mess the previous administration left, leaving this one between 'a rock and a hard place'. And look all the 'pork' the last administration administered, especially when is comes to the Iraq war and it outsourcing.
    Posted by .(JavaScript must be enabled to view this email address)  on  01/28  at  01:03 PM
  8. I think the majority of people do, whether or not others do.

    The problem, David, isn't that we recognize what the Bush Administration did but, the we recognize this has been going on for decades with the problem getting more and more difficult to contain.

    Now, we have a new administration doing the same things Bush was doing only to a higher level.

    There is the same organizations behind both parties advising them to continue with the same policies and principles that got us into this mess.
    Posted by JanPBurr  on  01/28  at  02:12 PM
  9. Sure, these things, as you say, have been in the works for years and perhaps the economy could have sustained them longer. But it is the incompetent mismanagement of Bush&Co;. that finally broke the camels back. To fix the mess is going to be a Herculean task. The cure, as they say, always costs more than the prevention, a prevention that was quite possible if Bush&Co;. had been better custodians. But, then, as you imply, America was cruising for a bruising, because of its cultural determinism.

    Listen to what Greenspan said about his never believing that such a debacle could have occurred due to his libertarian,free market ideology of unfettered capitalism. What he admitted tells you it could have been prevented, under his watch, as chief financial officer of Bush&Co;.

    Car 64, where are you?
    Posted by .(JavaScript must be enabled to view this email address)  on  01/28  at  03:12 PM
  10. So, it wouldn't have mattered who was President. Remember Kerry and Gore are both globalists as well and support the policies that Bush used.

    Don't you understand there hasn't been a "cure" for at least 2 decades?

    Greenspan was lying through his teeth. He even authored articles before he became Fed. Chairman that the opposite of what he did was needed. You can't be appointed to these positions in either party if you won't support the Central Bankers.

    Presidents don't run the country. In both parties they are only allowed to become a leading primary candidate if the are supporting or a member of the CFR and will appoint the CFR to cabinet and advisory positions.

    Life Membership

    Quality, diversity, and balance are the key objectives sought by the Council in the composition of its membership. New members are named twice a year by the Board of Directors, which invites individuals to join based on recommendations by the Membership Committee. To be considered by the Membership Committee, candidates must be nominated for membership by a Council member.

    That is how life members in the CFR are selected. You have to be nominated and then, once in and proven trustworthy and loyal to the goals of the CFR you get the funding you need to run for office.

    Here is the membership list site.

    Do a search for "news" and you will find the major media names over and over. Tom Brokow is a director.

    Then do a search for "CEO" and look at all the big company names represented who fund the candidates in both parties at the same time if they are the candidates they want voters to choose between.

    There is decades of this history of the link between the central banks and both parties through the organizations the central bankers created from 1913 on.
    Posted by JanPBurr  on  01/28  at  03:44 PM
  11. David, I do like that the new President is communicating better than the past one. I even wrote to Washington complaining about that lack of communication. But, now, we are getting more news but most won't want to hear it.

    Inside The Obama Huddle: Housing, Banking, Life and Crisis

    The Inauguration is over. It
    Posted by JanPBurr  on  01/28  at  04:11 PM
  12. YES IT WOULD MATTER WHO WAS PRESIDENT! And it did. (You must be joking because if it happened under a Democratic president you would be all, all over him.) The Democrats are of a different mind and would have applied more oversight to the financial markets, perhaps even stopping a Madoff or two before they got beyond the point of no return.

    It is the ideology and model behind it, basically that of Bush&Co;, that finally brought the economy to the brink. Bush&Co;. set the tone and Greenspan was happy to oblige. Greenspan under Bush was in his element. And he obliged Bush to get the economy going at every turn, at almost any price. They were a team, a phenomenon, in bring the economy to its knees

    In a way it is good Bush got two terms so he could really screw things up, so Americans would truly be convinced that his type of hands-off, no nuance approach was disastrous for the economy and society.

    It was America's complacency and belief that government and the economy was on autopilot that allowed an incompetent like Bush to squeak through and become president. Perhaps now America has learned its lesson, that it does matter who and what is president.
    Posted by .(JavaScript must be enabled to view this email address)  on  01/28  at  04:19 PM
  13. I was all over Bush as you recall. I am not a Republican. I am a realist.

    Don't you realize the Democratic party is run by the CFR, Trilateral Commission and Bilderbergs just like the Republicans.

    There only difference is domestic policy and what the "say" in campaigns.

    The voters are ignorant and have been for many decades.

    They will be calling President Obama incompetent when people are rioting and starving because he continued to use the Bush policies only faster and more of them.

    Bush was already "stimulating" and propping up banks and moving to a new global financial system. Where is the "change?"

    It doesn't matter who is President. You can't be President if you aren't supporting the people who fund the campaigns and the same people fund both parties.
    Posted by JanPBurr  on  01/28  at  04:47 PM
  14. Also, if Bush had thought more about the science of economics rather than rely on faith the financial mess as it is today would not be with us. I mean, the shunning of science was strictly and inherently a Bush thing. A Democrat would never have behaved like that.

    Bush's schism -aberration- of faith trumping science helped insure that the economy got to the abyss that it's at. Bush's faith thing is a pillar, a PILLAR, of the financial debacle we face today. Now I understand what Obama meant in his inaugural address when he said it was now time to put away childish things. He was referring to Bush's reliance on faith, that things would correct themselves naturally and biblically. And that is where conservatives get it wrong.

    Bush also risked the economy to fulfill his pet project of a full blown 'ownership society'. In doing so he threw caution to the wind.
    Posted by .(JavaScript must be enabled to view this email address)  on  01/28  at  05:16 PM
  15. Bush was just doing what he was told to do. Just as the current President is just doing what he is told to do.

    Bush didn't run things and President Obama doesn't run things any more than Clinton ran things.

    Wake up David and start thinking for yourself and prepare for what is coming.

    They just interviewed a Democratic Congressman on the news.

    He said the $850 billion stimulus is just a "minimum" and that even with it, we won't recover until the end of 2010 and without it not until 2014.

    There saying Bush didn't do enough, not that he was wrong to try and stimulate. They are carrying forth with the same policies Bush had only more of them.

    There is no disagreement in either party's leadership that you "spend out of problems." That is what got us in this mess over the decades. There is nothing new going on and wasn't under Bush, or Clinton or the previous Bush. There is nothing new when it is a democratically controlled Congress or a republican. Spend, spend, spend. The targets vary a little and the domestic programs differ a little but, it is the same formula and same advisers in both party.

    Neither party is good for America. Stop trying to say one is worse than the other and start working on getting both out of office and a reform party in office.
    Posted by JanPBurr  on  01/28  at  05:31 PM
  16. Ian,

    I think you're too conspiratorial about how things work.

    Bush was unique to this economic crisis. As a neocon he was an economic peculiar. His economic policy stood on its own, completely from another playbook.
    Posted by .(JavaScript must be enabled to view this email address)  on  01/28  at  07:09 PM
  17. Mr. Jay:

    I would like to disagree with one of your statements, because it touches a fundamental economic principle. You wrote:

    "When money ends up in somebody
    Posted by .(JavaScript must be enabled to view this email address)  on  01/28  at  09:57 PM
  18. David, I am not conspiratorial as much as realist. I study history and human nature and understand how easy it is for "group think" to happen when you have organizations like the CFR supplying candidates for President in both parties and their cabinets and advisers.

    All you have to do is search the membership ranks for the people you see in the news from both parties and who have served in both parties. Unlike others, I don't stick my head in the sand and ignore what is right in front of me when I study history.
    Posted by JanPBurr  on  01/28  at  10:15 PM
  19. Ian,

    Nevertheless, I hear conspiracy thinking.
    Posted by .(JavaScript must be enabled to view this email address)  on  01/28  at  11:50 PM
  20. That is probably because you don't study enough history and human nature.

    We have all the public speeches to draw from, all the Congressmen that warned us from 1913 on, all the economists that teach the different theories in economics and monetary policy, etc.

    On and on and on there is the history to draw from if one just looks.

    Remember David that if you only believe what the politicians in one party or some segment of society tell you, you are likely going to be mislead. Because there is different sides to what we have done and need to do and what is going to work and won't work, you need to study as far back in history as possible to see what worked and didn't work before.

    We can go back thousands of years to study what causes societies to rise, peak and fall and the human nature and political decisions involved. History is one of the most fascinating subjects in the world because it reveals the cycles and patterns in human nature that repeat and repeat and repeat.

    They say it will be "different" this time and often the details are but not the human nature behind it. One time it is a bubble in high tech and another time one in housing. At one time it was a bubble in "tulip bulbs" a few hundred years ago or so.

    One of the most famous market bubbles of all time, which occurred in Holland during the early 1600s when speculation drove the value of tulip bulbs to extremes. At the height of the market, the rarest tulip bulbs traded for as much as six times the average person's annual salary.

    Different bubble, same problem, human nature. We just saw what was probably a bubble in oil. Different bubble, same problem, human nature.

    "Group think" happens because of human nature more often than not.
    Posted by JanPBurr  on  01/29  at  12:30 AM
  21. Here is another bubble from history, different bubble same problem, human nature

    The British government of 1711 had spent itself into debt totaling over ten million pounds. For those of you familiar with inflation and the power of the pound, that's not exactly chump change. In a move that still befuddles experts today, a large group of merchants joined together and bought some
    Posted by JanPBurr  on  01/29  at  12:36 AM
  22. You forgot to mention MADOFF in your rambling.
    Posted by .(JavaScript must be enabled to view this email address)  on  01/29  at  12:52 AM
  23. That is a "Ponzi Scheme" similar to how we have tried to fund some of the programs in the U.S. But, human nature is definitely involved.
    Posted by JanPBurr  on  01/29  at  10:27 AM
  24. Mr. Brewton,

    You are correct that savings does have its virtues in that it provides capital for banks to lend to industry.

    My late friend, Mr. Keynes, would argue, however, that direct government spending, AT CERTAIN CRISIS TIMES, will do more to stimulate the economy than "savings," principally because of the famous "multiplier effect" that we are all familiar with. With an increase in savings, there is little or no immediate effect on the economy.

    This is not to say that savings is a bad thing, far from it!

    But does point to the great current philosophical divide between the conservatives -- whose dreamed-for tax cuts for the well-off often end up in a bank account, and the Keynesian concept of spending to prime the economic pump.

    P.S. David -- "It is Car 54 (not 64) Where Are You."
    Posted by .(JavaScript must be enabled to view this email address)  on  01/29  at  02:18 PM
  25. Ian,

    You say human nature never changes and its negative aspects keep repeating themselves, like the behavior of speculating unwisely, behavior that taking advantage of the less astute and behavior that creates financial bubbles.

    Well, to offset this negative nature that keeps repeating itself humans have organized themselves and developed systems, like the rule of law, oversight and a raft of common sense, to temper and modify that nature. Experience has shown us that we should remain vigilant about this behavior because of its likely reoccurrence. But during the Bush years his administration, especially, ignored many of the things learned about how humans will still abuse the system and continue to act irrational, threatening the whole order of things. Bush&Co;., instead of overseeing and watching the henhouse, gave those people a blank check and naturally they took advantage, the likes of which has not been seen in a long time.

    Can't The View do something about whatever is screwing up our postings?
    Posted by .(JavaScript must be enabled to view this email address)  on  01/29  at  02:19 PM
  26. Mr. Airth:

    Sorry about the commenting frustrations. As I've written twice to you, I am not a techie; I'm using a canned program. I've spent several hours already exchanging emails with the tech people and poring over the user forums, so far to no avail.

    Please bear with me.
    Posted by .(JavaScript must be enabled to view this email address)  on  01/29  at  02:36 PM
  27. Mr. Jay:

    With regard to Keynes's multiplier effect, it appears that he guestimated or estimated it. There is no empirical evidence to support it. Most economic research in the last decade or so, by liberal-socialist organizations such as the National Bureau of Economic Research and the Brookings Institute, as well as by conservative economists, suggests that the multiplier effect is much lower than Keynes expected.

    In fact, the multiplier effect for government spending appears to be a negative number, or at best a one-to-one transfer payment effect.

    The reason is that government spending doesn't come from savings; it must come from tax revenues or from borrowing.

    Tax revenues come from money that the income earners would themselves have invested or spent, with a diminution of the sum to cover bureaucratic administrative costs.

    Government borrowing crowds out individuals and corporations who might have borrowed, and it raises the level of interest rates, cutting into individuals' spendable income and lowering the potential return on investment for investors and corporations, thereby discouraging productive investment that creates new jobs.
    Posted by .(JavaScript must be enabled to view this email address)  on  01/29  at  02:48 PM
  28. No problem so far with my computer on this system. I just type in the word and off it goes.

    David, regulation is an integral part of any society. That is the core of society. It is where agreed upon restraints allow people to live together but, at the same time, human nature is always at play in the background.

    I don't know why you keep harping on Bush since he was just one in a long line of Presidents and Congresses that made decisions based on the advice of those from the international organizations the banking people created after they came to power in 1913.

    Bush accelerated and made more visible, the flaws in the system but they were always there. Now you have a new administration talking about more troops in Afghanistan (more military spending) more tax cuts, more stimulus, more spending on pork, etc. Why?

    Because the people giving this president advice come from the same organizations Bush got his advice from.

    The "theory" is that you spend out of recession and use tax cuts and use stimulus and all kinds of things to end a recession instead of let it play out.

    That is a flawed theory that is now coming home to roost. Each minimized recession has now built up until it may burst while this President is trying to blow it up even bigger. Remember Clinton kept Greenspan. Why? Because his advisers told him Greenspan was a "genius." Obama is keeping Bernanke (at least for now), why?

    Because they tell him Bernanke is an expert on depressions. But, he isn't so why is the President keeping him. Bernanke is using an untested theory that "wasn't used" during the depression but, just because you use a new theory doesn't mean it will work because he isn't basing it on what causes depressions, human nature and the time it takes to return things to a mean average after excesses have been built up, especially with debt.

    Regarding spending by the government, if it comes from a positive account balance, then that is what should be done. That is the whole purpose of saving, whether by a person or a nation.

    The problem with a "nation" doing it is that if they create jobs tied to the spending then removing the spending causes layoffs. "Spending" should be done in a way that it can be pulled later and the surplus restored without destroying the economy. However, we left the ability to do that many decades ago.

    The problem with Keynes is not that his theory doesn't have merit but, that in the hands of politicians who don't understand economics and monetary theory and human nature's affect on things, they totally are irresponsible in how they "stimulate."

    The problem is that we keep putting the cart before the horse and that is why debt never goes down. Even under Clinton's best year, Federal Debt went up about $18-20 billion and the next best year was $98 billion and the rest were all over $100 billion. But, just trying to balance the budget saw all mfg. job growth rates peak from 1995 to 2000 and led us into a recession.

    We have to build the basis for a sound economy up first. That is goods production and productive labor that can be consumed here as well as exported in enough quantity to offset what we import.

    Money is "stored productive labor" when it done right. When monetary policy is done wrong, much of people's productive labor is wasted and/or diverted to the financial sector who lives off of other people's labor.

    We have to correct the 95 years of abuses that have gone on to the benefit of a few and destruction of millions of workers and citizens but, that will require a very deep and long recession or depression and total reform of our government and its policies.
    Posted by JanPBurr  on  01/29  at  03:01 PM
  29. I keep harping about Bush because he is the worse administrator, the worse manager the United States ever had. If he had been just competent and picked a worthy team to run things, instead of yes-men and cronies, America would not be in the disastrous mess it is in. It is just that simple.

    You have your harps and I'll have mine.

    Posted by .(JavaScript must be enabled to view this email address)  on  01/29  at  04:45 PM
  30. No, you would still have the mess. Don't you understand that this is a 95 year trend catching up with itself. Bush only made it more visible and President Obama will make it worse by doing what Bush did only more of it.

    Bush succeeded in blowing a bubble after the Clinton created recession. That is all Presidents and Congress can do anymore. There is no longer any "solution" except "delay" the inevitable. If Gore or Kerry had been in office they would have appointed people from the CFR and Trialteral Commission like both parties always do and that is where Presidents get their economic and monetary advice from, just like Clinton did as he was blowing up the tech bubble.

    I have no problem with your harping on Bush as long as you realize that both parties for 95 years are to blame. Congress was held for 40 years by democrats under both party's presidents and continued to do the same thing wrong decade after decade.

    They are just as guilty of not keeping the banking elite from doing the damage they have for the last 95 years as the republicans.

    Both parties have destroyed America's chance of avoiding what is coming sooner or later because they kept using the same source (international banking organizations) for their cabinets and advisers in both parties.

    Instead of focusing on the "party," focus on the flawed policies both parties use.
    Posted by JanPBurr  on  01/29  at  07:08 PM
  31. "Bush&Co;., instead of overseeing and watching the henhouse, gave those people a blank check and naturally they took advantage,"

    David--you just will not accept the fact that the Democrats took control of Congress in 2006. All budgets and spending bills since then were theirs. The House Banking Committee watched for two years as Fannie Mae and Freddie Mac spun out of control.

    "Your" Barney Frank on that committee refused efforts to rein in the demented lending practices whereby the government agencies encouraged and bought up worthless mortgages. And those federal agencies were among the biggest donors to Obama's campaign! And the executives, after pocketing huge bonuses (based on volume of activity) went to work on Obama's campaign. There are plenty of people to blame, but your fixation on Bush and "his cronies" is incredibly irrational.
    Posted by bill greene  on  01/29  at  11:19 PM
  32. Ian,

    In other words America is finished, in your words.
    Posted by .(JavaScript must be enabled to view this email address)  on  01/29  at  11:21 PM
  33. Oh, good heavens no!

    We are going through something that happens to nations that over consume and over expand and over spend.

    We will hit bottom and rebuild and if we choose the right principles and return to a sound monetary policy and economy, we will boom again for about 200 years and then repeat the mistakes again.

    We still have a good, but decaying infrastructure that gives us a head start. If we return the goods production here, which we can if we reform our government, we still have the hard working and educated people needed for those industries.

    I am very optimistic that this will wake millions up and get them involved in their government in a much more meaningful and educated way. Sadly, it will take the hard times instead of just studying history to "educate" them but, they can do a lot once they have seen the need for reform.
    Posted by JanPBurr  on  01/29  at  11:30 PM
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