Obama's Plan to spend us out of debt

As many of you may be aware President-elect Obama plans to initiate largest expansion into public works projects since the 1950s. He plans to rebuild infrastructure (from roads, bridges, and tunnels, to re-equipping schools nationwide), and he has cited it as a right for all children to have access to the internet. Here's his plan:

—ENERGY: “[W]e will launch a massive effort to make public buildings more energy-efficient. Our government now pays the highest energy bill in the world. We need to change that. We need to upgrade our federal buildings by replacing old heating systems and installing efficient light bulbs. That won’t just save you, the American taxpayer, billions of dollars each year. It will put people back to work.”

—ROADS AND BRIDGES: “[W]e will create millions of jobs by making the single largest new investment in our national infrastructure since the creation of the federal highway system in the 1950s. We’ll invest your precious tax dollars in new and smarter ways, and we’ll set a simple rule – use it or lose it. If a state doesn’t act quickly to invest in roads and bridges in their communities, they’ll lose the money.”

—SCHOOLS: “[M]y economic recovery plan will launch the most sweeping effort to modernize and upgrade school buildings that this country has ever seen. We will repair broken schools, make them energy-efficient, and put new computers in our classrooms. Because to help our children compete in a 21st century economy, we need to send them to 21st century schools.”

—BROADBAND: “As we renew our schools and highways, we’ll also renew our information superhighway. It is unacceptable that the United States ranks 15th in the world in broadband adoption. Here, in the country that invented the Internet, every child should have the chance to get online, and they’ll get that chance when I’m president – because that’s how we’ll strengthen America’s competitiveness in the world.”

(Incoming White House Chief of Staff Rahm Emanuel had talked about expanding broadband access, but this is the first time the transition has formally proposed it.)

—ELECTRONIC MEDICAL RECORDS: “In addition to connecting our libraries and schools to the Internet, we must also ensure that our hospitals are connected to each other through the Internet. That is why the economic recovery plan I’m proposing will help modernize our health care system – and that won’t just save jobs, it will save lives. We will make sure that every doctor’s office and hospital in this country is using cutting edge technology and electronic medical records so that we can cut red tape, prevent medical mistakes, and help save billions of dollars each year.”Now some of this plans actually make sense, but he has still been mum on what kind of cuts he is going to make if any. And other question, and it feeds off the issue I just cited is, WHERE IS ALL THIS MONEY COMING FROM? Our government has been dolling out trillions of dollars to bankers, lenders, and even some companies it has deemed as 'too big to fail.' So, in light of the fact that the dollar will be worth next to nothing in the next 6-18 months after the market reacts to this largess of meaningless paper printed out by the government, how does this same government expect to afford all these new initiatives? Since when did it make sense to spend money to get out of debt? Oh, that's right, governments can do that because they can print money by fiat to pay their debts...except they don't. They print money to support more systemically unsound debt which is bought and sold to bankers and lenders worldwide.
So I guess that was why I was a little taken aback when I heard that one of the public works projects to be undertaken was the world's largest ball of yarn (below is only a 1/20 scale replica).
Set to be 50 stories tall, the ball will be situated in the middle of Kansas to give people a reason to visit the state even if they don't have family there.

"It will provide a way for Kansas to regenerate a tourist industry that was once vibrant. It will also allow Americans to use the new cloverleaf that the public works project initiative will be building right next to the yarn ball," said President-elect Obama.

Marjorie Glotus of Topeka said, "It gives me renewed faith in the government. Since the Wizard of Oz came out I have been scorned by relatives who live in Wyoming, even though we do have a pretty good basketball team, but now that we have a federally funded Guinness-worthy ball of yarn, I hold my head up high."

It makes me giddy.

Meet Joe the plumber

Move over Joe Six Pack, now there's Joe the Plumber. 

Last night he was referred to by John McCain in the Presidential debate after a video circulated of him asking Barack Obama about how his tax plan would affect him. His real name is Joe Wurzelbacher, and he hails from Ohio. 

A plumber by trade, he has worked for one company now for his entire career and has been able to work his way up into a position where he can now buy the company he works for. The problem he now sees is that he might be unable to buy that company now given the new tax bracket it would be put in under Obama's tax plan. While he says that 95% of all people will get a tax break, those who make more than $250,000 a year will not. Unfortunately, the small plumbing company makes more than that. Now, it doesn't matter so much that most of that money goes to paying salaries and reinvestment into the companies capital development, it just matters that it makes more than that arbitrary prescribed amount. When asked why he had to work so hard for so long just to get taxed more for his efforts, Obama told Joe that spreading the wealth around will help others achieve what Joe has been able to. 

Here's the video.

The cat is out of the bag. Obama's real policies aren't any different than the tax and spend democrats before him. It's a Robin Hood mentality. 

I'm tired of this liberal conception that tax cuts have to be 'paid for.' Obama's explanation is that if the middle class gets a tax cut, the difference has to be made up somewhere, and so those who have more should pay more. Why does it have to be that way? Why can our government not do with less money and more efficiency? How about instead of cutting taxes for some and raising them for the rest, we cut taxes for all, or leave them at the same rate and cut useless programs from the budget and make the programs that work work better? 

Since when did the idea of taxing your small business owners, managers, and CEOs more make sense? How can you get a sputtering economy going again by inhibiting American businesses from making more jobs available, having more money to invest in workers, infrastructure, and R&D? The truth is, you can't. This is a time when the private sector needs to be encouraged, not discouraged. 

And another note, I love how Obama keeps mentioning how Exxon-Mobile is going to get a $4 billion dollar windfall under John McCain's tax policies, and how greedy it is for having made a record $12 billion in profits this year. First off, since when was being profitable a punishable offense? Do we despise companies that make money? Have we considered the fact that very little of that profit went directly to bosses and employees pocket books? Where did it all go you ask? It went back into the company. Oil exploration is extremely costly nowadays. Most of the "profit" therefore gets put back into ways of sustainable drilling, government leases, Research and Development, capital improvements, etc. 

And, our own government doesn't help the oil industry any by not allowing our own reserves off the coast to be tapped. The claim has been made by Obama that the US consumes 25% of the world's oil yet only has 4% of its reserves. Why is that? Because oil companies are not allowed to drill and discover new reserves. The 4% figure does not have to be a fixed one. 

I am not saying drilling is the only prescription, but it is an important one. There are more reserves that have not been explored, and we should use our own people, ingenuity, and resources to become energy independent. While we have it, we should use it. That does not mean "raping" our land and oceans as so many eco-crusaders would say; it means doing it in a pragmatic and sustainable way. Furthermore, I know full well that even with discoveries of vast new reserves it will take several years for that oil to get to market. However, that makes the need to drill even more pressing. And, the discovery alone, along with the willingness of the companies to use it, and lack of government interference will make the cost of fuel go down. That is because economic theory is based on expectations. If people expect there to be more oil, the price will go down, even if there isn't any.

If we can create a more stable fossil fuel environment, we can have a much smoother transition to alternative fuels and other sources of energy including wind, solar, tide, and geothermic. It can't be just one way or the other. We need all methods on the table.

The Banking Crisis

Just about everyone has made reference as of late to the financial crisis, so I'm going to put in my two cents. 

Initially, as with everything, people wanted to blame Bush and lenient regulations that were promoted by his administration and party.  Then people started to get it right and blamed the money managers and CEOs of AIG, Lehman's, Freddie and Fannie for overextending themselves into risk averse loan situations without consideration of the ramifications. Then people went back to blaming Washington, which is a generic cop out strategy, to not put the blame exactly where it lies. Many factors were involved. Yes, it involves many greedy bankers, yes it involves the FED, and yes, it could have been prevented. However, I am horrified by the solution.

The US first bails out Freddie and Fannie, then it lets Lehman Brother's go bankrupt. The next day they bail out AIG, and now they have devised a plan to loan 700 billion dollars to ad liquidity and save the entire financial industry in America and the world. What that amounts to is a free ride for these companies. It's like saying, "Well I know you were irresponsible for more than a decade and a half, causing millions of people to lose their money, but we'll bail you out anyway and you can live happily off your 7-8 figure pension or severance." But, this bail out is not just helping American companies. Paulson has included foreign companies who have a lot at stake here as well, because as he correctly claims "It is a global problem." However, that being said, it should be a global solution, not the American taxpayers bailing all these companies out. We are marching towards socialism. We will soon have a completely state run financial system. And, the best part about it is no one consulted the American people. I suppose they didn't have to, but it sure ads insult to injury. 

Who really should get the help from this crisis are all the people who put money into this failed system, not the system. The lenders screwed up royally and can't pay back their debts, so why should we the people who lost our money to them, bail them out? I know some will argue, "desperate times call for desperate measures," but I would have stopped at Freddie and Fannie. 

Oh, and on another note, the former CEO of Fannie works for Obama, gave a load of money and picked his VP.