Diary

Obama's Economic Hail Mary

President Obama is making a last-ditch effort to save the Democrat party in the November election. He is proposing $50 billion more in government spending in order to stimulate the economy and create jobs.

 

Yes, more spending like the $787 billion ‘stimulus’ which did not work as we capitalists knew it would not. And if he thinks this new plan somehow will create a growth spurt before the election, he’s dumber than we thought he was.

 

This new outlay allegedly will focus like a laser beam on the rebuilding of critical infrastructure and will not include these types of silly, wasteful projects noted in the August report by senators McCain/Coburn about the earlier ‘stimulus’ spending:

 

$554,763 for the Forest Service to replace windows in a closed visitor center at Mount St. Helens; $762,372 to create “Dance Draw” interactive dance software; $62 million for a tunnel to nowhere in Pittsburgh that even Pennsylvania governor, Ed Rendell called “a tragic mistake”; $1.9 million for international ant research; $1.8 million for a road project that is threatening a pastor’s home; $308 million for a joint clean energy venture with…BP; $89,298 to replace a new sidewalk that leads to a ditch in Boynton, OK; $3.8 million for a “streetscaping” project that has reduced traffic and caused a business to fire two employees; $200,000 to help Siberian communities lobby Russian policy makers; $39.7 million to upgrade the statehouse and political offices in Topeka, KS ; $760,000 to Georgia Tech to study improvised music; $700,000 to study why monkeys respond negatively to inequity; $363,760 to help NIH promote the positive impacts of stimulus projects

 

We really need to study those ants!

 

So all of a sudden we are going to spend yet another $50 billion on ‘infrastructure’. Why wasn’t that included in the first stimulus?

 

Fool me once, shame on you. Fool me twice, shame on me… And Obama is not fooling anyone anymore. His Labor Day speech to a union audience in Milwaukee blamed Republicans for everything from the financial crisis to the attack of the killer bees. And America is not listening anymore.

 

This ‘infrastructure crisis’ is part of media lore. For decades, we have seen documentaries and news reports about crumbling bridges, deteriorating highways and rusting water pipes. These reports routinely claim that such-and-such number of dams and bridges are obsolete, falling down or on the brink of failure and that we need to spend so many trillions of dollars to fix them all. Then influential groups like civil engineers give the government a D or F grade on our infrastructure.

 

Yet we seem to keep going along just fine, upgrading bad bridges and dams and fixing water pipes. Even the Minneapolis bridge collapse of August 1, 2007 was attributed to a design failure, not age or deferred maintenance. So what is the truth? Is the crisis as bad as these reports say?

 

No, of course not. These reports are put out as sensationalist bait for the media. In fact, when a documentary points out a bad bridge, sometimes it is an old bridge that is going to be replaced anyway or even shut down permanently. It’s not as if we are oblivious to the problems.

 

In fact, every nation updates its infrastructure when possible because all nations face the same problems, particularly those that grew rapidly in the last 100 years with easily-built steel bridges that have suffered rust and decay. With new technology, however, the new ones will last much longer. Bridges are being replaced every day in America.

 

Yet Obama spent $787 on a ‘stimulus bill’ that did not seem to address many of these infrastructure problems. Why? It certainly appears that that would have made sense for the long-term interests of the nation to fix our bridges and water pipes ahead of anything else.

 

Not to Obama, however, who had other priorities like bailing out unionized auto workers and public school teachers or funneling wealth to left-wing college professors and other Friends of the Democrat Party (FDP) with money to study ants and improvised music. And to hell with the roads and bridges.

 

Now Obama is calling for the new $50 billion package to focus on the three Rs – roads, railways and runways. But of course this will be nothing more than another giveaway to FDP. And to pay for the $50 billion, Democrats plan to raise taxes on the oil and gas industry which is the most productive industry in America that is creating our national wealth by providing our basic energy supply.

 

So if you raise taxes on that highly productive sector of the economy, that will slow growth there. And when Democrats plan to use that money to “invest” federal dollars in roads, railroads and runways, you can rest assured that that money will be directed to projects being done by Democrat-connected contractors and overpaid union workers. And that the work will therefore be much more expensive that it should be.

 

Thus Obama may be dumb and may be dragging his party into the abyss, but his political instincts are intact: In classic Democrat style he is seeking to take all the wealth he can while he can. It is simple greed.

 

Obama also is said to be planning to advocate for a $100 billion proposal to increase and make permanent research and development tax credits for businesses.

 

Notice the words “tax credits”. In other words, Obama wants to use the government to control the flow of wealth by giving tax “credits” not tax “reductions”. Under tax “reductions” companies are allowed to keep more of their wealth before ever giving it to the government. Under “credits” the company pays its taxes then files to get some of the tax bill reduced under the government plan, i.e., the government directs some of the company’s activities toward the credits.

 

But businesses today do not need a flow of credit guaranteed by the government, or tax credits for R&D. They need paying customers, a predictable economic climate for future growth planning, and tax reductions to invest their own money the way they see fit. And none is being promoted by Obama’s policies.

 

And then consider that Obama now wants to offer $200 billion in business “tax breaks”. The question is: Why has he waited so long to offer these “breaks”? After all, we capitalists have been calling for such “breaks” for years in the form of “tax reductions”.

 

Answer: Obama is desperate and is willing to try anything at this point.

 

Now consider what Obama plans to do with the Three Rs of infrastructure spending – roads, railways and runways.

 

Regarding the railroads, you can rest assured that Obama will direct the biggest sop to one railway – Amtrak – which is dependent on government handouts for its every existence. And that he will continue to tax wherever possible our super-efficient private-sector freight railroads, a $35 billion industry which takes no subsidy and actually pay taxes TO the government.

 

No, those efficient freight railroads will get little or nothing, while Obama funnels pots of money into Amtrak, an inefficient government-run passenger railroad with a featherbedding unionized staff, a terrible on-time record and vast sums of capital being wasted on uneconomical and expensive cross-country trains patronized by few riders.

 

We have seen all this ‘stimulus’ before. Even when president Bush gave a $150 billion tax rebate in Spring 2008, we capitalists knew it would only last a short period, and we were right.

 

Obama has no other ammunition in his gun. He continues to shoot blanks of government spending. And the economic outcome already has been planted in the minds of Americans. They will vote Republican in droves in this election.

 

Please visit my website at www.nikitas3.com for more. You can print out for free my book, Right Is Right, which explains why only conservatism can maintain our freedom and prosperity.