Stimulus
Let's step back one second and add up just SOME of our tax dollars (and our kids, and their kids) and how it has been allocated:
- 140 billion in stimulus checks
- 700 billion in TARPoilet paper.
- 1 trillion in Obama Stimulus
Now, scribble down on a piece of toilet paper exactly how much of this money you think will be positive contributors to our GDP for years to come. Next, jot down the total number of jobs that will be created. Lastly, subtract approximately 2 million jobs from that figure because that BS will come from temporary census workers. Now take that and flush it down the toilet.
We've pulled demand forward for many years to come and most of our manufacturing is thousands of miles away. Peak credit means there is no more demand to be pulled forward [1][2]. What's left is a huge hole in our economy and nothing to fill it with except shovel ready projects. Wages and hours worked per week are going down as deflation puts a kung fu grip on the economy. We want to expand in every form BUT productivity. You put people to work making something, not filling potholes with asphalt or building bridges to nowhere. Just for the money Fauxbama gave to ACORN, as part of the stimulus, we could have built one nuclear power plant, or installed 1.25 gigawatts of solar products that could be manufactured in the defunct GM plants. This is only $5B out of the $1T in wasteful spending.
Speaking of GM, how about the $75b (loan + DIP)??? Those "taxpayer protected" dollars are gone bye-bye. Could have bought 10 million residential wind turbines that are ready to plug in. These guys have already adapted their automotive facilities to make those. Every automotive plant that has been shut down should be converted into Wind and Solar manufacturing facilities, rtfn. Instead of pissing away my money paying off someone else's debts and making bondholders whole, how about redirecting those dollars to something PRODUCTIVE that will continue to pay dividends (unlike some of the TARP recipients) for generations to come. It's just a start though. There are much better public/private partnerships than buying up garbage MBS/CMBS paper.
Don't bother telling me about monetary expansion and how that first dollar deposited expands into 9 (or whatever). I've seen exactly how this has worked and what it has produced over the last 20 years. Put and end to the sweeps on checking accounts and watch that expansion multiple crater [1][2]. In fact, this is exactly what we need to do but you will not see this anytime soon because it would crush the banks TCE. I would argue that this, in and of itself, would help to permanently lower leverage throughout the system and encourage only investment capital to be extended as credit instead of every dollar sitting in a checking account being swept nightly into a savings acct that is lent out (or to fill supertankers with oil, no worries, it's FDIC insured!). But I'm sure they'll find other 'creative' means to service their greed.
Banking
Banking has become a modern day mafia resulting in an uber-concentration of money and power. We've somehow come to depend on them to function as a society. Banking is supposed to be a sidebar, not some exotic financial laboratory used to build weapons of mass illusion driven by greed and fueled by fraud. Instead of a tool, banks once again became the epicenter of society led by none other than our own Federal Reserve Bank. By placing finance at the very center this enables for the micro-mismanagement of the economy through the expansion and contraction of credit. Interests rates should be determined by the markets, not a central bank. Unfortunately the wheels are flat (consumer) and the engine (finance) is fubar. This car is headed for the junkyard.
Some banks have repaid TARP, or have they? More like a sleight of hand if you ask me as the magical AIG conduit poops the cash out of the other end. They are still zombie Banks. Uncle Fed has tied up 100% of our current GDP in various programs, commitments and guarantees. An untold amount of that are direct purchases of securities that do not carry the full faith and credit of the United States (unconstitutional)[1]. All in the name of restoring "credit". Of course this assumes banks are lending, which they are not and for good reasons. Most of the money has been used as loan loss reserves (the step right before it's used for THE loss). The rest is split between the SPY and oil supertankers.
For what it's worth, there were over $600T in derivatives worldwide with ~$60T notional (10%) in cds written against it to protect against default. World GDP: $56T
No-growth/Low-growth is the best we can hope for ...
Expecting lasting growth anytime in the foreseeable future is not realistic after the damage that will ultimately be inflicted. The lopsided consumption/credit-driven economy apparently has a shelf life of 20 years. Only a perfectly executed plan to reshape the fundamentals of our economy would allow for a for a protracted period of no growth/low growth during the transition period and it would take many, many years to accomplish this. Misguided policy would send us in a deflationary spiral (Smoot-Hawley?). Considering there has been no real growth for over a decade, just blown bubbles and pulled forward demand, this will be a daunting task. Its time to pay the piper as this can has been kicked uphill to this point and gravity is starting to work it's magic. No pain, no gain brother.
True green shoots are sown well in advance
They also have a lengthy germination period. When properly sown and cared for growth will be both vigorous and healthy. Right now we need a good dose of Preen/Weed-B-Gone to take care of the Kudzu and the sown seeds of destruction. Unfortunately the powers that be are wielding an unlimited supply of MiracleGro, spraying anything and everything in site. When top economist started calling for massive stimulus packages our current administration's eyes lit up like a kid in a candy store. The bad news is there appears to be 1100 pages of handouts in that bill. I think it's saved 4 deputies jobs in Fargo, which is a plus. Also some contractor's small business was saved when he came with a shovel-ready project to dig that duck pond in the bill. Unfortunately the hired hands (paid in cash) were herded up at a local Home Depot (and subsequently released back into the wild upon completion).
The best way to create a dollar and grow the economy is through farming, manufacturing and mining. Not just by expanding one dollar to nine (or 40) to buy McMansions, Condos, high rises, shopping malls, hummers, casinos and politicians. Or as I like to call it, Money Bad. The infrastructure output from those served only one purpose - consumption. Now that the well has ran dry we have nothing much to fall back on. Just left with rampant overcapacity in every sector but energy which is why I suggest this area for economic development.
United We Stand; Separated by Party
Stop the insanity. You have a non-partisan democracy or a partisan democracy. Not both. There should be 535 different views being shared, not two. These no talent assclowns are trading action figures around to get what they want. Do away with parties. Institute term limits now to stop the uber-concentration of power and corruption. Go back to being a Government for the People you greedy bastards.
Health Care
I know I didn't hear someone in congress suggest we pay for the plan out of surplus? Or did I hear the middle class will in fact be taxed for this? I have an idea for affordable health care (aside from the 2m illegal aliens who's shovel-ready-employer paid them in cash to dig a duck pond, which is mailed back home all the while getting free health care...) Do away with corporate income tax and fill some of that gap with a health-care tax equaling no more than a 5% equivalent tax rate. There are hundreds of billions of dollars sitting in offshore havens (even by some of our own bailout recipients) used specifically for the purpose of avoiding our corporate income tax. Give some incentive for these corporations to bring those dollars and workforce back home and at the same time prevent offshore tax havens.
Budgets
Cut the military budget. It is too big to be sustained. If history has taught us one thing on the subject is that an unsustainable military has been the downfall of every great country [2]. Unfortunately now that we've pissed off (and on?) just about country on the globe, and might give the one-finger salute to some of our creditors, you might want to hang on to some of those anti-missile defense systems.
Cut your budget to nil, then stimulate a future economy (not the consumer) with that money. You are a service we afford and the bigger you've gotten the worse you screw up. The Government is too bloated and too costly to be managed (like Citi). Your endless calls for reform and oversight are akin to corporation's endless quest to do another re-org. I suggest after you finish going after bank bonuses you turn your attention to the monster-sized pension benefits of all government employees [2]. The only thing shrinking around here is wealth, and mostly from the middle class.
Cailifornia
Literally a sad state of affairs. If a state's problem becomes my problem by way of a Federal bailout I will have a real problem with that. Furthermore, if Barney Frank dare spew "taxpayer protections" ever again that will be the last straw.
Yes, states have been bailed out in the past and I know how large of a GDP contributor cali is (probably all consumption anyway), but sorry, fix your own problems. I suggest cutting spending and other bloated government sponsered programs.
