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Obama Must Up Spending To Get Re-Elected

From an already excuse-making Associated Press:

Obama faces tight restraints in crafting jobs plan

By JIM KUHNHENN – Associated Press
August 30, 2011

WASHINGTON (AP) — Hamstrung by budget cuts and a tight debt ceiling, President Barack Obama is preparing a September jobs package with limited tools at his disposal to prime the economy and crank up employment.

At a minimum, the president’s plan will call on Congress to extend current payroll tax cuts and jobless benefits, spend money for new construction projects and offer incentives to businesses to hire more workers.

In other words, Mr. Obama’s brave new plan is going to be comprised of exactly the same things he has been pushing since he took office.

In any case, entitlement spending must not be much of a problem, after all. If Obama wants to extend the ‘holiday’ on the payroll tax — which is really just FICA. Otherwise, Obama wouldn’t want to cut in the amount of revenue Social Security and Medicare take in.

But economists say that while that would eliminate some drag on the economy and maintain the status quo, it won’t be enough to propel it to new heights.

Ballooning the deficit on entitlements and spending billions more on unemployment benefits and pouring more money into public sector unions via construction projects won’t make businesses hire more workers? – The hell you say!

The president’s plan, which he will announce in a major speech next week, will be far less ambitious than the $825 billion stimulus of 2009, passed when the economy was still shrinking and when unemployment stood at 8.2 percent. Now the economy is growing sluggishly but unemployment is a full percentage point higher — 9.2 percent for July.

Note that the AP neglects to mention that "growing sluggishly" means a GDP of 1%. Which, if you took away the government spending still going on from the first stimulus, the current GDP would definitely be in negative territory. And the stimulus money is running out.

Economists who advocate for government intervention in the economy estimate that it would take a package of at least $300 billion to avoid backsliding and even more to give the economy a lift

Or to put it another way, if the government doesn’t inject another $300 billion or so, the GDP for the next two quarters will be negative, which would constitute an official recession. And we can’t have that in an election cycle.

That’s a tall order for a president facing a divided Congress where Republicans, demanding fiscal austerity, reject the notion that short-term infusions of taxpayer money into the economy can prod a sluggish recovery.

Those obstreperous Republicans might refuse to squander another $300 billion just so that Obama can artificially keep the country out of a recession. They are that mean.

Even without Republican opposition, such a level of spending would require short-term borrowing that would move the government closer to its new debt ceiling before the November 2012 election, something Obama is determined to avoid

Oh, our sides. So it’s the debt ceiling that is the real ‘tight restraint’ the AP is talking about here.

Mark Zandi, the chief economist at Moody’s Analytics who has advised Republicans and Democrats, said that without government action, the private sector would have to grow by more than 4 percent to generate enough jobs to keep unemployment from rising.

"That seems like a heavy lift at this juncture," he said.

Given that the economy only grew at 1% – even with stimulus money still in the pipeline.

[Former White House economic adviser, Jared] Bernstein said that if Congress fails to renew the payroll tax cut and unemployment benefits, the jobless rate would probably remain unchanged by the end of next year.

"If they renew them, we have a better chance of a jobless rate that’s 8.5 or below, which isn’t great either, but is a whole lot better than 9," he said

Bear in mind that as far as the White House and the news media are concerned, all they need to do is get unemployment below that magic number of 8.5%.

Since no other President in modern times has been re-elected with unemployment at 8.5% or above.

This article was posted by Steve on Tuesday, August 30th, 2011. Comments are currently closed.

13 Responses to “Obama Must Up Spending To Get Re-Elected”

  1. River0 says:

    No clue, no money, and no ideas – other than FDR retreads. Not much fun, and certainly no glamor in being president now.

    • Rusty Shackleford says:

      All the more reason for him to engage in pure escapism. Thus the voluminous trips to the golf course, the rides in AF-1, the vacations, the campaigning and space-cadet glow of the limelight when he’s onstage, looking regal and important. But there comes a time in every actor’s career when they must face the truth that the masses just aren’t into them anymore; That the people have less money to spend on their shows and the music they heard, once very new and captivating is now dull and scratching.

      In the movie, “Bladerunner”, Rutger Hauer as Roy is addressed by the man who created him, “The light that burns twice as bright burns for half as long – and you have burned so very, very brightly, Roy. Look at you: you’re the Prodigal Son; you’re quite a prize! ”

      And so it must go for Obama. Interestingly, Roy’s next line, he says, “Ive done….questionable things.”

      As has Obama, for which he feels no regret. The synopsis of Obama’s character was so very well-done in an article in American Thinker by Jesse Weed: http://www.americanthinker.com/2011/08/a_unified_theory_of_obama.html

      Very well put together and pretty much sums up the lad:

      The leader with the X-Profile may be failed by his constituency and his people, but he will still see himself as a great, high-mined[sic], visionary leader ahead of his time. It is quite natural that such a man would resort to finger-wagging and scolding his squabbling, foot-dragging legislators while at the same time seeming aloof, narcissistic, and besotted with a sense of moral and personal superiority. Is that Obama?

      I agree that he thinks this. He is of the opinion that his version of morality is superior to anyone else’s and that he was somehow placed in the position he was to change it all and put all the playing pieces where they belong and make it all fair for everyone, except, he is decidedly unaware of his own anger and how that skews the picture. But, then, when the American public votes a spoiled brat to be president, this is what we get.

  2. Petronius says:

    “extend current payroll tax cuts….”

    The FICA payroll tax should be abolished entirely. It falls only on American employers and employees, and places American manufacturers and workers at a disadvantage against foreign competitors. If necessary, replace FICA with a national sales tax that will hit Chinese and other imported goods equally.

    “Economists … estimate it would take a package of at least $300 billion to avoid backsliding….”

    Does that mean it was a mistake to cut $400 billion from defense and space programs?

  3. GetBackJack says:

    Recently finished a new slant on historical data about the Crash of ’29. It answered to my satisfaction the question bugging me since I first read in school of 1929 … where did the money go?

    Money doesn’t disappear. It changes pockets. So, where did the money go? Forget all the paper-inflated stock trading hyper-schemes and bubble portfolios that “history” has taught us was the root cause of the Crash. Where did the real money go? Because, suddenly, all the real money was gone, and with the real specie absent, there was nothing left to support the flim flam of our own Tulip Madness.

    Recent reading leads me to nod my head and go Aha! that Hitler’s “economic miracle” and the sudden dearth of real capital on Wall Street are concurrent. If I followed the money correctly – admittedly at a significant remove – Hitler’s Economic Miracle is where our money went. Billions drained out of our economy and sunk into Germany, making Hitler look like a genius. (simultaneous to also funding the Russian revolution and the rearrangement of Arabia by funding the Saud family to kick out the Brits and slide Wall Street into dominance of oil – these three operation took A LOT of cash)

    If …. this is factual … and if this is where Follow The Money leads to, it’s no wonder the ying yang smack daddy pimp master cow patties of the Monied Aristocracy facing as the Democratic Party really believe that full employment can be achieved, like Hitler, if only enough cash can be sunk into the bottomless hole of government spending.

    If … I’m right … they’re so wrong, it boggles. Because America is not Germany. This is not cash/specie but borrowed funds and our market driven economy responds to the absence of government interference, not the other way around.

    I suspect it’s true, if for no other reason than the observable fact that aristocracies become graphically less intelligent with each new generation until the family line is nothing but inbred autistic waterheads who couldn’t hit the floor with their own hat. And that’s being slanderous to the autistic.

    Which is precisely where we are now.

    • proreason says:

      I’m not challenging your thoughts, gbj, just sharing some related ones of my own.

      I’m beginning to think that money itself is a shell game. What we should actually be concerned about is whether wealth is increasing or not, and wealth and money are not tightly linked.

      What I mean by wealth is lifestyle: food quality, shelter quality, personal security, leisure time, entertainment choices, access to information important to yourself, ability to take care of your family, national security, and the many other complex aspects of your lifestyle that make up your feeling of well-being.

      I maintain that for most people, wealth by that definition wass very significantly higher in August of 2008 than it had ever been in history.

      But I also believe that just about every aspect of wealth is being directly and savagely attacked by marxists and the Ruling Class, and it has escalated to a crisis under Obamy. The areas that his regime has particularly attacked are personal security, the ability to take care of your family, and national security. I won’t go into the details. They are obvious to anybody who can think.

      It isn’t so much an assault on money as it is an assault on the individual. They want to break you so they can control you.

    • JohnMG says:

      My Dad only had an 8th grade education yet he successfully conducted a construction business for over 50 years. Once during a conversation with him I asked where all the money went after the crash? (This was around 50 years ago) He said all the real money was still around, but all the make-believe money (the illusion of worth) was revealed as the fraud it had always been. And borrowing by the government only made it (the depression) worse.

      The only person who can make anyone rich is that person himself…..and only then in a society free from government intervention. The Moron knows exactly what he’s about, but he’s in a mad scramble to achieve it now since the TEA party have awakened the patriots. He knows if he doesn’t get it done before November ’12 it may not happen at all.

      He must be stopped!

    • GetBackJack says:

      Pro – a very good friend who was versed in the arcane languages of ritual symbology – much like the infamous Professor Langdon of Dan Brown’s novels – and who also held a Senior Board position on a ‘name’ investment firm once said to me “Money is the rich man’s magic”.

      I often kicked this around with him, as my hobby is the etymology and context of Biblical languages (I am NOT an expert) and have a passing familiarity with the richness of symbology where words do not suffice.

      I liked his coined phrase very much and you have as much repeated it. Money is a phantasm, this we know. It but represents. It is not wealth itself. Wealth should be defined by each of us as suits; for me it is uncontested ownership of enough land in that part of the Nation I cherish and seek preserve; raising that amount of cattle as suits me; other food stock animals; enough open land for haying; clean running water sufficient unto our needs; soil that can support a kitchen garden; south facing land in a temperate to cooler clime; enough free cash to be able to build out our home in the manner I’ve designed …. you get the idea. Wealth to me and Mrs. GBJ is not Rolexes, jet skis, $500 bottles of single malt and a clothes closet the size of a median tract home.

      Wealth to us is peace, being left alone, and the freedoms we gift unto our government by dint of the Constitution.

      Take away, or do damage to any of those three and I am diminished in my wealth.

      Cash money is, to a rich man, like the power bundle of Plains medicine men. With this power bundle a rich man can work his will; cause what he wants to appear; cause what he dislikes to disappear; he can seduce whom he lusts for with enough power from his bundle; he can work all manner of conjuring without conscience or regard with his magic.

      It is, as you say, noy at all the same thing as wealth, and is most assuredly, a shell game.

      And that’s a discussion we can carry on through volumes and volumes.

  4. proreason says:

    The economy is not growing.

    Gubamint spending is growing.

    The economy is shrinking.

    • GetBackJack says:

      The “government” has no money to spend, until it takes it out the private sector.

      The private sector is what creates jobs, and what grows the economy.

      The more money the “government” takes out of the private sector for itself, the job creating/growth factor is not only diminished in proportion, but the effect is magnified.

      Or …. every dollar they take from you and me for themselves means the economy stalls out that much (x) a multiplier of, say, ten.

  5. Rusty Shackleford says:

    Hamstrung by budget cuts and a tight debt ceiling

    Right there, the article lost me. What budget cuts? What “tight” debt ceiling? Two blatant lies right out the chute, set free to further foment ignorance and encourage its long-legged life.

    In 2008, this petulant man-child and an equally petulant and aggressive democrat-run congress and senate, opened the doors of the grainery and let the unions and other socialist factions feed themselves to bursting with it. Now the grain is all gone and a drought is forecast. They were definitely operating under the theory that “Spend it all now…and that will justify the need for an increase in taxes”. Although they liked to use words like “revenues” and “investments”.

    In fact, their tactics are straight from the Roman playbook on “how to govern and oppress a people”. Sadly, we have no Constantinople to move to where free trade and commerce can thrive. But, also, there seems to be enough people around to point out the democrats’ (national socialists’) methodology as a flat-out lie. As…they ran into a slight bump in the road when they thought they would get carte blanche to raise taxes as they saw fit because of their reckless spending. The downside was a hit on the AAA credit rating; Yet another first for our Nero-esque self-appointed driver of the bus to utopia.

    He and his commonwealth morally bankrupt cronies have successfully dug the US into debt to satisfy their need for re-election and yet, they failed to recognize that addicts can only see their immediate want. There is no satisfying an addict. Like the lab rat, they will keep pressing the lever that provides the cocaine, ignoring the one that provides food, until they kill themselves. Unfortunately, this parasitic relationship also kills the host.

    They have run out of other people’s money.

    And…they borrowed against the good faith of those same people…and have damaged those people’s credit.

    But, as can be seen in the face of this prick of a president, he cares not. He doesn’t feel it, nor will he ever. In past centuries, the masses would deal with his ilk in a very different way. However, us civilized “folks” (to use his choice of words) will banish him the way a modern society does. In fact, I have already banished him from my house and my car by cutting him off whenever he appears or his voice is heard. As a free man, I have that right.

    We also have the right to get him out of office. On a side note, I submit that those who support this current version of government are truly of the most ignorant. However, with that said, they are the product of a very free nation. In a nation that can germinate and foster a completely separate class of people who think it’s the job of government to provide for them, and succeed at it…well….it could only happen here, I should think. It worked in Europe until they realized that the money they spent never satisfied the dependent class and all the unions and all the take, take take. Plus they barely spent a dime on their own national defense, all that came from …..you guessed it…the US of A. We had bases in Spain, Germany, the UK, Italy, Belgium, The Netherlands. But they demanded we leave and thus, there are only a fraction of the bases there that used to be.

    Don’t think for a minute that that didn’t have a noticeable effect on their local and national economies.

    But I digress.

    Our royal class of leaders have done the nation a huge disservice by spending trillions of dollars. And by spending it on crap, they have set the stage, some say intentionally, for the downfall of this great nation. When I lived in Europe, I often wondered what it must be like to live in a nation that, at one time, was the most powerful in the known world. England had its turn, as did France, Spain and of course, there was —The Roman Empire.

    But, here’s where the parallel diverges. The US became great because of its intense notions about freedom. The other nations fed off of bounty pillaged through genuine, unabated imperialism. This is where I often get into arguments with even the moderates, those “independents” who think they know things. The US was never an empire and never pursued empirical goals.

    Yet, another difficulty I have is that the left, in denouncing the “US imperialism” is, as I write this, trying to set up an empire of their own. Albeit a totally craptacular, vermin-infested, filthy gangster-esque one. But an empire nonetheless. I’m really not sure how they see themselves in it. Like Reid, Pelosi, etc. Do they see themselves as some operative for a giant empire of great power and wealth? Or are they just satisfied to be the little manipulators that they are?

    • sticks says:

      “I’m really not sure how they see themselves in it. Like Reid, Pelosi etc.” they are self important, they crave the power to carry out their small minded experiments on us so they can convince themselves they did something worthwhile. Really all they did was make us eat a giant phlem sandwich and while we were vomiting they said “there there good little boys and girls everything will be just fine.”

  6. Mithrandir says:

    Obama’s Plan: Union Spending,Union Spending,Union Spending.

    If people are busy at election time, they will thank the prez for his excellent work. People will vote self-interest.

    No jobs, no money coming in? –they will vote Republican in droves.

    Democrats know how to manipulate the population to do what they want. And if they can’t do it, they will say, “Well, we WERE going to have all these jobs available, BUT the mean ‘ol Republicans just don’t want you to have a job.”

    Predictable as the sunrise, bet on Democrats doing this.

  7. Freedom615 says:

    Mr. Shackleford, God bless you and Pro. I am learning so much from you and others here on S&L. Not just facts, but real critical thinking.

    When I read the lines “There is no satisfying an addict. Like the lab rat, they will keep pressing the lever that provides the cocaine, ignoring the one that provides food, until they kill themselves. Unfortunately, this parasitic relationship also kills the host,” a chill ran up my spine. Here’s hoping we can flush the parasites from our system while we still draw breath.

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