Chicago Republicans

Does history repeat itself when it comes to the economy? Stephen W. Mack, certified financial planner, will discuss the economy, specifically the investment markets, the deficit, and how they will affect one’s personal finances, at 7 p.m., Wednesday, April 21 at Evanston Public Library, 1703 Orrington Ave., Evanston. The presentation is free and open to the public, and is being held in conjunction with “Money Smart Week,” (April 17-24.)

In his presentation, “The Four Most Dangerous Words: This Time Is Different,” Mack will speak on the U.S. economy, drawing comparisons to historic periods. He will discuss how the economy’s history foretells the future. His talk is co-sponsored by The Republican Club of Evanston and Evanston Public Library.

That's a featured story headline from the July 8, 2009 edition of USA Today.  While only about $17 billion of Porkzilla, I mean, the American Recovery and Reinvestment Act of 2009, better known simply as, the Stimulus Bill, has actually been delivered to local governments, the vast majority has gone to areas that supported the President last November.  Keep in mind that the Stimulus Bill contained $787 billion in spending which means that five months after being signed into law just over 2% has actually been delivered.  Can someone explain to me, coherently, why we had to rush this through Congress?  I digress.

USA Today performed an analysis of the money delivered thus far.  Counties that supported Obama last year have reaped twice as much money per person from the administration's stimulus package as those that voted for his Republican rival.  The reports show 872 counties that supported Obama received about $69 per person, on average. The 2,234 that supported McCain received about $34.

However, we have no need to worry - "There's no politics at work when it comes to spending for the recovery," White House spokesman Robert Gibbs says.  This boggles the mind and begs the question, "Just how dumb does Obama think we are?"

Perhaps we're not dumb, but, he knows that the state run media (ABC, CBS, NBC, CNN, MSNBC, NY Times, etc.) will overlook this story.  Kudos to USA Today for digging to learn the truth about stimulus spending and for having the onions to print a story that casts aspersions on the President.

However, it didn't begin and won't end with the Stimulus Bill.  USA Today also looked into existing federal allocations and changes Obama made.  They found that, according to spending reports from the U.S. Census Burea, the counties that voted for Obama collected about 50% more government aid than those that supported McCain.

What's really at work here?  For anyone who grew up in Illinois, especially around Chicago, it's simple - payoffs.  Obama is rewarding those counties that supported him in hopes of getting their vote again and punishing into submission those that didn't.  Whenever the discussion among friends leads to the dirty style of Chicago politics I counter with, "Thank goodness no one from Chicago ever rose to national political prominence!  Oh, wait . . ."  I think I'll bring this article along for the next dialogue.

Sources:

http://www.usatoday.com/news/washington/2009-07-08-redblue_N.htm

http://www.usatoday.com/news/nation/2009-07-07-stimulus_N.htm

http://en.wikipedia.org/wiki/American_Recovery_and_Reinvestment_Act_of_2009

 

The latest economic news has been impressive: over 150,000 jobs were "saved or created" last month; banks are starting to repay the TARP money, even at a "profit"; congressional spending will be on a "pay-go" basis. These statements are misleading at best yet the media is reporting them as signs of a desperately wished for recovery. How the White House reports on the economy is exactly how I report on my spending at home. I am the spender and my husband is the saver. Let me reveal a home budget secret - whenever I spend money outside of our budget, I don't tell my husband how much I spent, I tell him how much I saved! Even he is impressed by my ability to find a bargain, but holds firm that I am still spending By my budget rules, I can then put that savings into my "income" line. I am still trying to convince my husband of all the money I have "earned" over the years. Why are Americans willing to believe this administration's explanations? Let's look first at the latest job report. It is virtually impossible to measure how many jobs are actually saved and yet all Obama has to do is say that since job loss predictions were higher than actual losses, these jobs are saved and therefore can be counted on the plus side. Claiming that this is the worst financial crises since the Depression helps inflate the dire predictions in the first place. However, Obama promised that the stimulus would keep unemployment at 8% but the numbers are now topping 9.4%. Yet, he is arguing that this is proof the stimulus is working and we should wave the wand and ramp up the stimulus so we can "save" 600,000 more jobs. I use that same logic when I defend my budget-breaking based on all the great deals I can get now, alleging long run gains while ignoring the cost of spending money that isn't there. I am thankful that my husband understands the concepts of debt and interest.

The real magic comes when we can turn our "savings" into income. Ten banks announced they are paying back TARP funds, in large part to relieve themselves of the administration's controls. The administration has gone so far as to claim that these returns on the government's investment are turning a "profit", as if the rate of return wasn't already calculated in the original loan. Given that there is still an additional $650 billion outstanding, I don't see the profit part unless these repayments, although less than accounted for, were more than expected. The real illusion is that the repayments are not going to repay the American taxpayer, they are now going to fund the Treasury Department which will continue to administer funds and control banks. By this accounting, in my home budget, I should take what I saved, call it income and, Abracadabra! put it into a special Starbucks fund. This is all being done to convince taxpayers (voters) that the administration's plans are working.

This ability to convert "lower than expected losses" into "gains" has greater ramifications than merely being a shell game. Polls show that Americans are beginning to resist the government's insistence on increased spending and are making it clear that now is not the time to overhaul health care, let alone nationalize it. To appease these concerns, Obama announced that the stimulus budget will be based on "pay as you go" - no dollar goes out unless there is one coming in. This all sounds very responsible, if not fiscally conservative, yet it is not really about reducing spending. The trick is that as long as you can "add" income, you can argue you have more to spend. There are two ways we can appear to add income - increase taxes and other revenue or, by my own home budget magic, count savings. Presto! Changeo! now there are funds for national health care. Even I have not mastered that trick.