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Tuesday, December 15, 2009

What is the Stimulus Bill Actually Stimulating?

In yesterday’s article I laid out the need to force fiscal responsibility upon the Federal government. As if on cue, the government was kind enough to provide me with more examples of their excesses. But first, why hasn’t the stimulus bill brought jobs back to the private sector? The easy (and correct) answer is that government is a parasite that lives off the blood of its people. It consumes, it does not produce and therefore, will never create jobs outside of its own bloated bureaucracy.

The other truth is that government does not understand what a job is, particularly when the government is now controlled by progressive Democrats. A job is not an entitlement, it is not an offshoot of a government program and it is definitely not something that can be created in the stroke of a pen held by someone that has never worked outside of the lurid world of politics. Jobs exist for one reason and one reason only…because someone has more work than they can do themselves. Many of today’s large corporations had modest beginnings and in many cases, the original owners worked by themselves or with a small core group of people until they created a demand that they could no longer meet. To expand, they needed more money than they personally had on hand and the banks for the most part, do not lend on dreams. They lend only to those that already have the means to pay them back and the best business plans in the world are still, for the most part, the dreams of the owners.

Business owners would all love to be able to create an enterprise that will grow into something lasting and something bigger than themselves. This begins with an idea and a plan that excites investors who in turn, place their faith and money behind those ideas to set them in motion. It is an educated gamble with the hope that a small investment will yield larger results and give the investors a reward in return for risking their money on a dream. That is the essence of Capitalism.

So let’s take a close look at some of what the government invested your money in through the stimulus bill as reported in “The Hill”, a Congressional newspaper.

$54,000,000.00 for the Napa Valley Wine Train
$2,200,000.00 to help a failing golf course in San Francisco
$1,700,000.00 for fossil research in Argentina by Penn State
$400,000.00 for Malt Liquor and Marijuana Journals
$220,000.00 to study sex habits of birds and rats and the caste system and division of labor within an ant colony.
$200,000.00 for a study on how college students “hook up”
$100,000.00 for socially conscious puppet shows in the “Heart of the Beast” theater in MN (the theater is named after a Che Guevera quote)
$50,000.00 for a Facebook study

A White House spokesperson said “Even if there were a few unwise projects, it’s only a handful out of the over 50,000 projects approved to date.” With the United States $12 trillion dollars in debt, why should we accept any “unwise” projects or are these more payoffs for votes?

First I would say that it is very curious that the two projects that top the list of irresponsible waste are in or near Nancy Pelosi’s neck of the woods. The Wine Train is a tour business that uses vintage rail cars to tour the Napa Valley Wine Country. Of course we know that Nancy Pelosi owns a winery in Napa Valley. I’m sure San Francisco golf courses are important to the Congresswoman from San Francisco, even though we know golf courses use extraordinary amounts of water in an area that cries out for the responsible use of water. Oh, I forgot….the rest of us are supposed to use water responsibly not actually San Francisco, the birthplace of the American Environmental movement. They have apparently paid their dues by wearing ribbons and carrying signs to make us all aware of the problem so they are exempt from actually doing the heavy lifting.

Why are infusing $2.2 million to save a golf course while the EPA has shut the water off to farmers in the nearby San Joaquin Valley? Their land was once an abundantly fertile area that supplied 15% of America’s produce and it has been left to dry up and return to desert conditions because a two inch fish on the EPA’s protected list was getting sucked into the irritation pumps. Why hasn’t there been any stimulus money to fund a technical solution to what is in essence, a dumb fish problem that would save the forty-thousand lost jobs in the San Joaquin farms? Because our government is apparently dumber than the fish are. But maybe their not dumb….

I am a big believer in the premise that when something makes no sense at all, it’s time to follow the money. Since shutting off the water is forcing America to buy foreign produce to replace what can no longer be grown in the San Joaquin Valley, I would be curious to know which one of this administration’s friends was uniquely positioned to capitalize on the importation of foreign produce. Of course it could be something even simpler. These were mostly private farms with non-union workers. Was this punitive measure against those farms offered as a gift to the SEIU? Unfortunate, the tide of interest has turned against the farmers and all eyes are on healthcare and the climate debate so we may never know the truth.

What we do know is that seven million jobs have been lost since the recession began and over four million of those were lost since Obama was inaugurated; three million since passage of the stimulus bill. Obama does have a jobs program though…the Federal government has been recently adding new jobs at the rate of ten-thousand per month. Not only that, but the existing jobs are getting better compensation than ever before. While the nation slides deeper into recession, the number of Federal employees whose salaries are over $170,000 rose from a pre-recession total of one to over one-thousand six-hundred and ninety today. The average salary in the United States is $40,331 while the Average Federal employee salary is $71,206 and lawmakers are now seeking to eliminate the mandated caps on Federal salaries even as they debate adding salary caps to the banking industry. In fact, Max Baucus, the chairman of the Senate Finance Committee recommended a $14,000 raise for one of his people….that is until we discovered that he was romantically involved with her. Tiger Woods would be proud of old Max!

The Congress recently voted to raise our national debt ceiling by an additional $1.8 trillion dollars to be able to continue their reckless spending spree. We already owe $12 trillion and while many experts say that debt level is unsustainable now, the White House estimates our national debt will double to $24 trillion dollars by 2019 and that is without the cost estimates for healthcare and cap and trade added in.

I can’t imagine why the Federal government does not seem to realize we are racing towards a brick wall. Foreign interests have already spoken about replacing the dollar as the currency of international trade and there is talk about downgrading our bond status from triple “A”, which has never happened before, even during our worst financial crisis’s. Maybe they all ready believe all is lost and this is a race to do as much as possible while other nations will still lend us money. They will worry about how to restructure our nation after the collapse when everyone will be busy fighting for survival instead of marching on Washington. If it all goes to hell, imagine the power these people will have then and no matter what, it is all about power…isn’t it.

Recent gains in the stock market have given some a sigh of relief but is that a real indicator that the economy is recovering? Unfortunately, the stock market is reflecting an increase in activity from casual traders and retirement portfolios. The people with real wealth like Soros and institutions with large sums of money to protect are fleeing the market and buying T-Bills even though the current rate of return is 0%. Why would they invest in bonds that offer nothing in return? That is the billionaire’s equivalent of hiding their money in their mattresses. They have such a fear over the state of the economy that they are willing to hand over their fortunes to the Federal government for safe keeping; in essence, “Don’t worry about paying interest, just make sure I get it back later.” Keep a close eye on these people…when they start bailing out of T-Bills and investing in gold and real estate, that will signal a real fear that they believe the economy will actually and irretrievably, collapse.

Paul

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