All Posts Tagged With: "Economy"

In his weekly address, President Barack Obama announced that Treasury Secretary Timothy Geithner is preparing a new strategy for reviving our financial system, and urged the swift passage of an American Recovery and Reinvestment Plan.

If Republicans can’t have a perfect bill to stimulate the economy,
they’d rather have no economy at all.

(Note: Video may take a moment to load)

President Bush, along with a sloppy and incontinent Republican majority in Congress, managed the feat of discrediting free market economics without ever practicing it. It was the Republicans who passed the Medicare prescription drug bill, and the bloated farm bill, and the transportation pork. This disqualifies most Republicans from challenging the gigantic new trough feeding that is about to begin under the Democrats.

— Mona Charen, nationally syndicated neoconservative
columnist, political analyst and author

In his first weekly address since being sworn in as the 44th president of the United States, President Barack Obama discussed how the American Recovery and Reinvestment Plan will jump-start the economy.

Via Daily Dish, Macroeconomic Advisers looks at Obama’s stimulus plan:

According to press reports, President-elect Obama is preparing a stimulus plan that, excluding interest on the additional government debt, will cost roughly $775 billion over two years and includes a mix of increases in direct federal spending, aid to the states, personal tax cuts, and business tax breaks.  One certainly can harbor reservations about such an aggressive set of initiatives.  Can government wisely spend so much money so fast? Do elements of the stimulus plan foster the achievement of sensible long-term objectives? Is the plan fiscally responsible?  Does it deliver the largest bang for the buck?

On balance, however, we find such a policy could deliver the results promised for it.

Most of elements of the plan under discussion would be temporary, thereby limiting the ongoing  cost of any the package. This strikes us as a reasonable balance between the needs for near-term stimulus, on the one hand, and long-term budget discipline, on the other.  Further-more, the induced rise in revenues will cover roughly 40% of the static cost of the plan over a five-year budget window. Our analysis suggests that implementation of the plan would reduce the peak unemployment rate by more than 11⁄2 percentage points, speed the economy’s return to full employment, and reduce the risks of deflation. The plan would generate more stimulus (and more induced revenues) if it was less weighted towards corporate tax breaks for past activity, but this may the price of building the broad coalition of political support necessary to see the plan become law.

Hugh Hewitt makes some great points worth considering:

In that question is the new president’s greatest political danger. He’s about to oversee the spending of an unthinkable $1 trillion in taxpayer dollars ($350 billion in the second half of the bank bailout, and at least $700 million in the stimulus package.)  Even if growth returns as expected in the second half of 2009, voters in 2010 and beyond will be wondering, and Republicans will be asking: “Where did it go?  What did it buy?  What do we have to show for it?”

If President Obama oversees the payout of more than a trillion bucks and cannot point to anything but statistics to show for it in two years, he’ll have a political nightmare on his hands, and he’ll deserve it.  The enormous size of the stimulus is a never-before-seen-in-American-history splurge, and the Democrats thus far show no sign of treating it as other than a vast payout to their friends.

If President Obama was to demand the funding for and enabling legislation to kick start the construction of the dozens of new nuclear power plants this country needs, as well as the wind turbines envisioned by T. Boone Pickens and the grid expansion everyone knows is necessary, not only would he be creating thousands and thousands of great jobs, he’d be powering the U.S. up for a second American century.

I agree, except that it won’t just be Republicans asking “”Where did it go?  What did it buy?  What do we have to show for it?” Every taxpayer who’s paying attention will all be asking those same questions, regardless of their political identification.

If we’re going to infuse trillions of taxpayers’ dollars into the economy by way of astronomical deficits, then it better be for worthwhile investments into long-lasting projects that not only infuse capital into our economy but also addresses some of our nation’s long-term fundamental needs — like infrastructure and energy. As Hewitt noted, the nation’s power grid needs some serious work, including beefing up its security. Roads and bridges across the country, including right here in Oklahoma, are in desperate need of repair, rebuilding and new construction to replace the aging, outdated and obsolete structures designed for an era long past with much less traffic loads. And the nation certainly needs massive investment in innovation and infrastructure building for alternative energy sources, whether for our cars or for our commercial and private energy needs.

This can’t be a political pork feast with the most senior members of Congress getting the best chunks for their districts at the disadvantage of the country as a whole. The party in power needs to exercise its power with prudence and not with greed. I know that’s a lot to ask, but let’s just try it once since our nation literally sits at a precarious precipice. This not the time for politics and grandstanding but for meaningful and effective bipartisan solutions.

I’ve got a suggestion of my own. If in two years there is nothing to show for all this massive spending, we fire all of them — all 535 members of Congress — with a four-year ban before they can run for that office again. So, if they can’t set aside their political posturing and grandstanding and come together to diligently and honestly work on solutions for this country, then they are terminated for failure to perform. The stakes are too high for business as usual on Capitol Hill.

In two years (and again in four years), I will ask this Congress and this new president, “what do we have to show for it?” There better be some good answers. We certainly haven’t had must to show from the last big stimulus package nor from the economic policies of the last eight years. It’s certainly time for serious change and it’s most definitely time for complete accountability.

An interesting story from the New York Times about the controversy over Obama’s nominee for Treasury secretary:

If Timothy F. Geithner were a bank, he might well be considered “too big to fail.”

In better economic times, Mr. Geithner’s confirmation to be President-elect Barack Obama’s Treasury secretary might be in danger after the disclosure this week that he had paid more than $48,000 in delinquent taxes and interest. But with the economy so fragile, many senators are loath to rattle financial markets by rejecting someone with Mr. Geithner’s qualifications and international respect. By late Wednesday, Republicans as well as Democrats were predicting he would survive the controversy and be confirmed next week.

Mr. Geithner has broad experience in global economics, financial regulation, currency and monetary policy. And lately, as president of the Federal Reserve Bank of New York, he has been at the center of the government’s efforts to manage the financial chaos, sharing some criticism for its mixed record but not blame.

“These are not the times to think in small political terms,” said Senator Lindsey Graham, Republican of South Carolina, who just returned from Afghanistan and Pakistan with Vice President-elect Joseph R. Biden Jr., and briefly met with reporters on Wednesday alongside Mr. Obama. “I think he is the right guy.”  [continue reading]

In his final press conference as president, George W. Bush used the forum to continue to repair his legacy. One of his more passionate defenses of his administration’s policies was of his 2001 and 2003 tax cuts.

There’s a fundamental philosophical debate about tax cuts. Who best can spend your money, the government or you? And I’ve always sided with the people on that issue.

I have to agree with him on this one — “who best can spend your money, the government or you?” He’s proven that his government surely didn’t spend my money wisely and he’s spent my future money in the process as well, racking up record deficits and a mind-numbing national debt — just look at the ever-inflating number in my sidebar. The Wonk Room noted:

We’re not going to quibble with the notion that Bush didn’t know how to spend taxpayer money. However, he decided he knew how to best spend China and Japan’s money, which he borrowed in order to finance his tax cuts for the wealthy and the war in Iraq, driving the federal debt to historic heights.

As the Washington Post noted today, Bush “has presided over the weakest eight-year span for the U.S. economy in decades”; the federal government “had a modest budget surplus when Bush took office,” but his administration ran up deficits “even as the economy was growing at a healthy pace.”

It is worth remembering that when Bush took office, it was projected that the federal government would run a $710 billion budget surplus in 2009, and that the Center on Budget and Policy Priorities calculated that Bush’s tax cuts accounted for 42 percent of the fiscal deterioration between 2001 and 2008. If Bush was indeed siding “with the people,” he had an awfully funny way of going about it.

That’s Bush’s lasting legacy when it comes to government spending and borrowing and fiscal responsibility. He didn’t know how to spend our taxes wisely, so he gave “us” tax cuts (most of which went to those who needed it the least) and continued to spend-spend-spend. His legacy will be remembered for generations to come as the government uses more and more of our tax dollars just to service — not even to pay down — our mushrooming national debt.

Thanks, President Bush! We’ll never forget you!

That would be the ailing, failing newspaper industry. Matt Welch writes:

Here’s a new holiday cocktail for you: Combine one part bailout seasoning with another part perennial journalistic self-pity, pour it out over the Christmas/New Year’s publishing interregnum and presto!—it’s time for patriotic men and women to get behind a government rescue of what was until very recently one of the most profitable sectors in the United States: The newspaper industry.

“We’re more worthy of a bailout than the jokers on Wall Street,” argued Kansas City Star columnist Jason Whitlock on Dec. 20. “You can’t have a democracy without us. If newspapers are dying, so is our system of government.”

Quite. Without < target=”_blank”a href=”http://www.kansascity.com/179/story/275496.html”>Whitlock in the trenches covering the Big 12 North conference, how is the Republic to survive?

Welch quite poignantly gets to the root of the newspaper “crisis” and challenges the lamenting of its journalists:

Blaming the customer is the second-to-last refuge of any crappy industry, business, or organization (the last refuge being asking for a handout on Capitol Hill). As my ex-L.A. Times colleague and current Reason magazine Contributing Editor Tim Cavanaugh has noted in our pages, the paper we both short-timed for was filled with people making jokes about whether we could just “fire our readers.” Over the recent holidays, an entire journalistic Festivus celebration of customer-blaming broke out over New Yorker finance columnist James Surowiecki’s lament that, “The real problem for newspapers…isn’t the Internet; it’s us. We want access to everything, we want it now, and we want it for free.” To extrapolate, if only us greedy human beings would realize that our very democracy was at stake, that we “are taking an active step in the formation of a country without a civic conscience,” then we’d damned well volunteer to pay an unnecessary premium to keep our finest journalists in permanent six figures. Sounds precisely as convincing as the argument that enlightened voters will surely agree to pay extra taxes so that political campaigns can be financed through “clean” money.

At the risk of alienating what few old newspaper pals of mine still have jobs, the industry they (and I!) so cherish, which has suffered mind-blowing valuation losses and several dozen rounds of downsizing both in personnel and column inches, is still bloated after all these years, with costs that no publisher would dream of incurring if he was starting a newspaper from scratch in 2009.

It’s an excellent column and worth the read.