Friday, December 3, 2010
First of all Happy Hanukkah to all of the Jewish folks out there. Now let's get down to business.
Spending vs. Investing
Do you know the difference? Unfortunately, far too many people, (especially in Washington D.C.), don't. Unemployment rose in November to 9.8% despite increased retail sales. That's another thing that always bothers me when I hear it.
We're all supposed to act surprised when the retail sales increase in November and December. This is just a guess but it might have something to do with Thanksgiving and Christmas. It's not recovery, it's called the holidays and retail sales always jump for the holidays.
I find the so-called economists fascinating that talk about government spending as if it's all an investment. That's not to say that it can't be done to a certain degree. Some government spending is necessary and could be seen as an investment, such as the military and national defense. The problem with far too many in Washington, (mostly on the Democrats side but that's by no means exonerating the Republicans), is that they see all government spending as an investment regardless of what the money is spent on.
You see this mentality routinely from those who say that the problem with the stimulus is that it didn't spend enough. If trillions of dollars aren't enough, do you honestly believe that there is a figure high enough to be enough in the eyes of the fools with that opinion?
Let's look at that stimulus spending for a moment. Did it help you? Did your rent or mortgage get paid off? Did your car payment go away? Did it save your job or do you believe it had anything to do with why you still have one? (If you still do).
Then we have the president's deficit commission. When President Obama issued an executive order to create the deficit commission he made a majority of 14 out of 18 needed in order for the proposals to make it into the Congress for debate. Obama knows that's unlikely given who the members are and what truly needs to be done in order to address our deficit problems.
Now, if President Obama knows that the deficit is unlikely to accomplish anything then why would he appoint one in the first place? The answer is simple, he has to make it look like he's actually trying to address the deficit. His propaganda blog Huffing and Puffington Post is on board.
Take this story for example.
"Sen. Bernie Sanders (I-Vt.) met with labor unions, seniors organizations, and liberal members of Congress Thursday afternoon to develop an alternative proposal to the deficit commission's draft report released last week"
So, labor unions: (whose pensions are collapsing several states and who Obama has been bailing out with our money), seniors organizations: (I'll bet that means AARP who recently announced that Obamacare will make health care more expensive for it's employees), and liberal members of Congress, (keyword liberal, so much for bipartisanship) to develop an alternative.
If Obama believes in his own deficit commission then why would his strongest supporters, labor unions and liberal members of congress, be so against the deficit commissions proposals when we haven't even really had time to pick apart their suggestions?
This also brings into play more Social Security propaganda. This is along the same line as MoveOn.org's propaganda that I showed you awhile back. Read this for a refresher of what I'm talking about. I showed you the propaganda on social security back in June and this recent Huffington Post story I've been talking about shows it again.
"Sanders said the Simpson-Bowles proposal to raise the retirement age for Social Security, when the entitlement program is solvent until 2037 and contributes nothing to the national debt, seems to be something of a non sequitur."
This is a lie, Social Security is not solvent and will not last until 2037. It's full of IOU's thanks to Lyndon Johnson, need proof? Here.
"Q: Which political party took Social Security from the independent "Trust" fund and put it into the General fund so that Congress could spend it?
A: It was Lyndon Johnson and the Democratically controlled House and Senate."
So the Democrats are the ones who started filling the Social Security Trust Fund with IOU's in the first place, I knew that but did you? Do you think Bernie Sanders or the labor unions know that? I'm not saying Republicans are innocent here but the left should stop trying to act like Social Security saints.
Think about this, they claim that Social Security is solvent until 2037. What about lost jobs? Every worker has money taken out of their paychecks to go toward Social Security. However, there have been millions of people in the last few years who've lost their jobs. No job means no Social Security tax, millions of people no longer paying that tax means less revenue for Social Security. Less revenue for Social Security means less time that it remains what they call "solvent".
The positions of those like MoveOn.org and others who agree are truly ignorant positions on this issue and prove the unwillingness to address this very real crisis.
Government Regulation Continues To Grow
Banks, health care, car companies, Wall Street, big business, small business, and now even more regulation for food. There are some misconceptions about the recently passed S. 510 bill regarding regulations for farming. Red Mass Group put out an article that eases some of the panic regarding the government getting too involved with our food supply. Here's the article. I worry about what else there will be that we find out about in time, like health care.
Here's what I worry about with the increased food regulations by the government. The problem I see with this is the fact that it's another step of government control. While this article may prove some of those more fearful of increased government control over farming wrong to some degree, with encroaching government it always starts with a foot in the door. Bits of control granted over time that ...lead to total control in the end.
Take the income tax for example, it started out small and only affected a small amount of Americans when implemented, since then it has only grown more and more over time. This next step gives the government more control and could lead to another farming crisis, the last thing we need. The government wont stop with this bill, it's just a foot in the door. Need proof? Just look at health care and the auto industry.
Think of government regulating like managing. No managing and there's chaos, too much managing and efficiency is crippled. Anyone whose worked for a micro manager before knows what I mean. It's harder to do your job with someone standing over your shoulder watching every move you make like a hawk or trying to do your job for you assuming you can't do anything yourself.
A manager has to trust the workforce to do it's job thus allowing you to be productive, innovative, and efficient. When there is an actual problem then it's management's responsibility to help respond to the problem.
Government regulation over our economy works in exactly the same way. If the government has too little control then those who are actually corrupt criminals get away with anything they want and everybody gets screwed. However, if the government has too much control then it can't manage the job and the economy can't be innovative and efficient. This creates an inability for the economy to grow.
That's exactly what's happening under the Obama administration. The government has increased regulatory power so much that the economy is in a stalemate. He even has a "regulatory czar" Cass Sunstein. After all, isn't that exactly what health care reform was? It's government regulation of health care. Thousands of pages of regulation, (just look at our 40,000 page tax code as another example of this), becomes thousands of pages of micromanaging.
Despite what all of Obama's supporters are trying to get you to believe you probably understand the micromanaging analogy of our economy because we've all worked for a micro manager and seen the adverse effects it's had on our various jobs. Go after the slackers, back off the productive workers, and it'll all work out. Unfortunately, being in the tank for the unions is the opposite of this.
Our economy is reacting predictably to all of this government micromanaging. If the government doesn't back off, (which under Obama, it won't), then don't expect the results to improve much. Despite all of the Spending this chart is very telling about unemployment under Obama. We've hovered between 9.5% and 10% for well over a year now.
If the tax cuts expire it will get worse. Throughout history higher taxes have never lead to vast economic growth. With the economy as weak and fragile as it is the taxes going up next year will turn this great recession into another great depression. Don't expect propaganda sites like The Huffington Post, (where Obama tells you to go for news), or groups like MoveOn.org to tell you any of that though. They're too busy telling us that Social Security is in good shape. I don't think you're that dumb, yet they clearly do.