Readers of my periodic Rants know that I have been highly critical of the way the Bush Administration and Republicans in Congress spent their way to ignominy in the past few years. Like crack-addicted junkies, it seemed like the answer to virtually every problem was more federal spending. When the economy began to slow in 2007, we had the first economic stimulus plan that was based on the brilliant economic principle of giving “targeted” tax refunds to millions of people who didn’t pay taxes in the first place. We were told that this federal spending was necessary to help consumers inject billions into the economy, thus saving jobs and preventing a recession. The stock market was at 12,337 when the first stimulus plan passed a year ago this week to great fanfare. By July it was down by 11 percent to 10,997. Next came the bailout of various financial institutions with the Troubled Asset Relief Program (TARP). This was a $700 billion boondoggle based on the same flawed logic of the stimulus – since the stimulus plan didn’t work to actually stimulate the economy, let’s do more of it. Passing TARP was essential, we were told, to stabilize the nation’s financial markets and get banks lending again. It would allow banks to get bad loans off their balance sheets so they would have the ability to lend to consumers and businesses hungry for capital. The market was at 10,325 on October 3, 2008 when TARP 1 passed. Today it closed at 7940, down 23 percent since TARP was enacted. Bad mortgages are still sitting on balance sheets. Credit is still tight. But what some financial giants did with our tax money was to hoard cash and pay fat bonuses to executives. Brilliant.
It turns out that these disastrous economic policies from the last Congress and Administration are not the worst of it. The worst of it is that President Bush and the last Congress have made it easier for President Obama and the new Congress to continue down this path to financial ruin.
President Obama says that the economic situation is worse than he knew, which is why he is proposing even more stimulus actions. The Congress is on the verge of passing Obama’s $832 billion TARP 2 plan that passed the Senate this week (a package that Obama says is too stingy). On top of that, his Administration is laying plans for $2 trillion (with a “T”) in handouts to prop up ailing financial institutions.
If President Obama gets his way, in the space of a little more than a year, we will have hit up taxpayers to the tune of $3.7 trillion for various bailouts and stimulus programs. Think about that. The entire federal budget in FY 2008 is under $3 trillion. We will have more than doubled federal spending in a year. Every penny of that money is borrowed from our children and future generations.
God help us. I don’t know if we can survive much more economic stimulating from the federal government.
Maryann and I saw the movie “Taken” the other day. Starring Liam Neeson, this is a terrific thriller that we thoroughly enjoyed despite the incredibly high body count and gore aplenty. Neeson plays a retired covert agent who is trying to establish a relationship with his 16 year old daughter following years of estrangement. Reluctantly, he agrees to let her go to Paris with a friend, whereupon she is abducted by a gang of human traffickers who sell their captives into sex slavery. Let’s just say that when Daddy goes looking for her, he does not precisely follow the terms of the Geneva Convention. Seriously good flick, if you are into that sort of action.