Archive for September, 2011
I’m not going to lie.
You will be shocked to hear this, but a lot of what Obama said during his speech to Congress last Thursday night regarding his new economic stimulus plan was music to my ears. It was refreshing to hear a Democrat recognize the dire economic straits we’re in right now, and lobby hard for hundreds of billions of dollars in tax cuts to revitalize the economy. Under Obama’s new plan, nearly $240 billion in tax revenue will be kept in the American people’s pockets with the reduction of Social Security and payroll taxes, and tax incentives for businesses to hire new workers. It’s shocking to hear the #1 Democrat in the country call for cut-backs in Medicaid and Medicare, but Obama is for that too. I’m not quite sure how Social Security, which is already bleeding out money and on the road to insolvency, can handle such a reduction in revenue, but who cares. I’ve said before Social Security is a huge Ponzi scheme, and the more we can do to cripple, destabilize, and de-fund it, the faster we can move towards a retirement program that actually works (private savings accounts?).
I haven’t read the bill extensively or heard too much analysis about it, so I don’t know what kind of pork barrel legislation is stuffed in there. What I do disagree with is Obama’s (and the federal government’s) fascination with dumping billions of dollars into government jobs in construction. These jobs are merely temporary, as once the stimulus money runs out, those hired will be right back to unemployment status. And while I do recognize the need to modernize our decaying transportation and communication network, too many dollars are wasted by inefficient government bureaucracies for actual progress to be made. You need only look at Republican candidate Rick Perry to see the fallacy of job creation through stimulus spending. If government is serious about improving the infrastructure, it will allow private companies to operate and maintain toll roads, or at the very least out-source construction jobs to the most competitive companies, instead of being buddy-buddy with the same contractors who fleece the taxpayer’s pocket.
I also disagreed with Obama’s proposal to help Americans refinance their loans with Fannie Mae and Freddie Mac to prevent defaults and help restore the housing market. If anything, this will create a positive incentive for millions of more Americans to default on their mortgages and look towards the federal government for bail-outs. We need to allow the foreclosures to happen, and just bulldoze the empty homes. Only then will the housing market recover, and true economic recovery can begin. It’s just a simple matter of supply and demand. No matter how hard you lean on banks to refinance mortgages, the housing market will never adjust with such a cheap supply of foreclosed homes on the market.
All in all, it was refreshing to hear a Democrat finally recognize that we need to haul back Social Security, Medicaid, and Medicare and provide more tax breaks/benefits to businesses, but Obama’s other proposals were party rhetoric. We need to let the free market run its course, whether that means the housing market undergoes this serious market correction, or we allow real jobs, not temporary government construction ones, to be created. Doing anything less just puts a band-aid on a canker sore.