« | »

How Obama Plans To End The Recession

As we have previously noted, an article appearing in today’s New York Times has let the cat out of the bag about Mr. Obama’s great economic plans:

Obama Pledges Public Works on a Vast Scale

By PETER BAKER and JOHN M. BRODER
Published: December 6, 2008

… A substantial part of the proposed economic package will go toward creating so-called green jobs, those that benefit the environment or save energy. That part of the package could run as high as $100 billion over two years, according to an aide familiar with the discussions.

A blueprint for such spending can be found in a study financed by the Political Economy Research Institute at the University of Massachusetts and the Center for American Progress, a Washington research organization founded by John D. Podesta, who is a co-chairman of Mr. Obama’s transition team.

The study, released in November after months of work, found that a $100 billion investment in clean energy could create 2 million jobs over two years.

Behold the “study” the New York Times is referring to.

Fittingly enough, this “study” first appeared in the November 24, 2008 edition of the longtime communist outlet, The Nation:

How to End the Recession

By Robert Pollin
November 6, 2008

The collapse on Wall Street is now decimating Main Street, Ocean Parkway, Mountain View Drive and I-80. Since January the economy has shed 760,000 jobs. In September alone, monthly mass layoff claims for unemployment insurance jumped by 34 percent. General Electric, General Motors, Chrysler, Yahoo! and Xerox have all announced major layoffs, along with the humbled financial titans Goldman Sachs and Bank of America. Fully one-quarter of all businesses in the United States are planning to cut payroll over the next year. State governments are facing a tax revenue shortfall of roughly $100 billion in the next fiscal year, 15 percent of their overall budgets. Because states have rules requiring balanced budgets, they are staring at major budget cuts and layoffs. The fact that the economy’s overall gross domestic product (GDP) shrank between July and September–the first such decline since the September 2001 terrorist attacks–only confirms the realities on the ground facing workers, households, businesses and the public sector.

The recession is certainly here, so the question now is how to diminish its length and severity. A large-scale federal government stimulus program is the only action that can possibly do the job.

So far, our leaders in Washington have dithered. Treasury Secretary Henry Paulson and Federal Reserve chair Ben Bernanke continue improvising with financial rescue plans, committing eye-popping sums of money in the process. Paulson’s original program for the Treasury to commit $700 billion in taxpayers’ money to purchase “toxic” loans–the mortgage-backed securities held by the private banks that are in default or arrears–was at least partially shelved in favor of direct government purchases of major ownership stakes in the banks. But neither of Paulson’s strategies has thus far helped to stabilize the situation, with global stock and currency markets gyrating wildly and investors dumping risky business loans in favor of safe Treasury bonds. The crisis has even hit the previously staid world of money market mutual funds, where the fainthearted once could park their savings safely in exchange for low returns. Money market fund holders have been panic-selling since mid-September, dumping $500 billion worth of these accounts.

To stanch a money market fund collapse, Bernanke announced on October 21 that, on top of the Paulson bailout plan, the Fed stands ready to purchase $540 billion in certificates of deposit and private business loans from the money market funds. This action is in addition to two previous initiatives committing the Fed to buy up, as needed, business loans from failing banks. Until this crisis, the Fed had conducted monetary policy almost exclusively through the purchase and sale of Treasury bonds, rarely buying directly the debts of private businesses or banks. But the pre-crisis rules of monetary policy are out the window.

Even if some combination of Treasury and Federal Reserve actions begins to stabilize financial markets in the coming weeks, this will not, by itself, reverse the deepening crisis in the nonfinancial economy. A rise in unemployment in the range of 8 to 9 percent–upward of 14 million people without work–is becoming an increasingly likely scenario over the next year.

President-elect Obama as well as most members of the newly elected Democratic-controlled Congress seem to recognize the urgency of such a large-scale stimulus program above and beyond any financial bailout program. Even Bernanke, whose term of office continues through January 2010, has offered his endorsement. But despite the near consensus, questions remain, including: How should the stimulus funds be spent? How large does the stimulus need to be? Where do we find the money to pay for it?

A Green Public-Investment Stimulus

Recessions create widespread human suffering. Minimizing the suffering has to be the top priority in fighting the recession. This means expanding unemployment benefits and food stamps to counteract the income losses of unemployed workers and the poor. By stabilizing the pocketbooks of distressed households, these measures also help people pay their mortgages and pump money into consumer markets.

Beyond this, the stimulus program should be designed to meet three additional criteria. First, we have to generate the largest possible employment boost for a given level of new government spending. Second, the spending targets should be in areas that strengthen the economy in the long run, not just through a short-term money injection. And finally, despite the recession, we do not have the luxury of delaying the fight against global warming.

To further all these goals we need a green public-investment stimulus. It would defend state-level health and education projects against budget cuts; finance long-delayed upgrades for our roads, bridges, railroads and water management systems; and underwrite investments in energy efficiency–including building retrofits and public transportation–as well as new wind, solar, geothermal and biomass technologies.

This kind of stimulus would generate many more jobs–eighteen per $1 million in spending–than would programs to increase spending on the military and the oil industry (i.e., new military surges in Iraq or Afghanistan combined with “Drill, baby, drill”), which would generate only about 7.5 jobs for every $1 million spent. There are two reasons for the green program’s advantage. The first factor is higher “labor intensity” of spending–that is, more money is being spent on hiring people and less on machines, supplies and consuming energy. This becomes obvious if we imagine hiring teachers, nurses and bus drivers versus drilling for oil off the coasts of Florida, California and Alaska. The second factor is the “domestic content” of spending–how much money is staying within the US economy, as opposed to buying imports or spending abroad. When we build a bridge in Minneapolis, upgrade the levee system in New Orleans or retrofit public buildings and private homes to raise their energy efficiency, virtually every dollar is spent within our economy. By contrast, only 80 cents of every dollar spent in the oil industry remains in the United States. The figure is still lower with the military budget.

What about another round of across-the-board tax rebates, such as the program the Bush administration and the Democratic Congress implemented in April? A case could be made for this in light of the financial stresses middle-class families are facing. However, even if we assume that the middle-class households will spend all the money refunded to them, the net increase in employment will be about fourteen jobs per $1 million spent–about 20 percent less than the green public-investment program (the main reason for this weaker impact is the lower domestic content of average household consumption). Also, it isn’t likely that the households would spend all their rebate money. Just as with April’s rebate program, households would channel a large share of the money into paying off debts.

The Matter of Size

This is no time to be timid. The stimulus program last April totaled $150 billion, including $100 billion in household rebates and the rest in business tax breaks. This initiative did encourage some job growth, though as we have seen, the impact would have been larger had the same money been channeled toward a green public-investment stimulus. But any job benefits were negated by the countervailing forces of the collapsed housing bubble, the financial crisis and the spike in oil prices. The resulting recession is now before us. This argues for a significantly larger stimulus than the one enacted in April. But how much larger?

One way to approach the question is to consider the last time the economy faced a recession of similar severity, which was in 1980-82, during Ronald Reagan’s first term as president. In 1982 gross domestic product contracted by 1.9 percent, the most severe one-year drop in GDP since World War II. Unemployment rose to 9.7 percent that year, which was, again, the highest figure since the ’30s.

The Reagan administration responded with a massive stimulus program, even though its alleged free-market devotees never acknowledged as much. They preferred calling their program of military expansion and tax cuts for the rich “supply-side economics.” Whatever the label, this combination generated an increase in the federal deficit of about two percentage points relative to the size of the economy at that time. In 1983 GDP rose sharply by 4.5 percent. In 1984 GDP growth accelerated to 7.2 percent, with Reagan declaring the return to “morning in America.” Unemployment fell back to 7.5 percent.

In today’s economy, an economic stimulus equivalent to the 1983 Reagan program would amount to about $300 billion in spending--roughly double the size of April’s stimulus program, though in line with the high-end figures being proposed in Congress. A stimulus of this size could create nearly 6 million jobs, offsetting the job-shedding forces of the recession.

Of course, the green public-investment stimulus will be much more effective as a jobs program than the Reagan agenda of militarism and upper-income tax cuts. This suggests that an initiative costing somewhat less than $300 billion could be adequate to fight the job losses. But because the green public-investment stimulus is also designed to produce long-term benefits to the economy, there is little danger that we would spend too much. Since all these investments are needed to fight global warming and improve overall productivity, the sooner we move forward, the better. Moreover, under today’s weak job market conditions, we will not run short of qualified workers.

How to Pay for All This?

Let’s add up the figures I have tossed around. These include the $700 billion bank rescue operation being engineered by the Treasury, the $540 billion with which Fed chair Bernanke has pledged to bail out the money market mutual funds, along with unspecified additional billions to buy unwanted business debts held by banks. On top of these, I am proposing $300 billion for a second fiscal stimulus beyond last April’s $150 billion program. At a certain point, it is fair to wonder whether we are still dealing with real dollars as opposed to Monopoly money.

In fact, the whole program remains within the realm of affordability, albeit approaching its upper bounds. But major adjustments from the current management approach are needed. In particular, the Federal Reserve has to continue exerting control over the Treasury on all bailout operations. That is, we need more initiatives like Bernanke’s $540 billion program to stabilize the money market mutual funds and less Treasury fumbling with taxpayers’ money to buy either the private banks’ bad assets or ownership shares in the banks.

We need to recognize openly what has largely been an unspoken fact about these bailout operations: that the Federal Reserve has the power to create dollars at will, while the Treasury finances its operations either through tax revenues or borrowed funds (which means using taxpayer money at some later time to pay back its debts with interest). The Fed does not literally run printing presses when it decides to inject more money into the economy; but its normal activity of writing checks to private banks to buy the banks’ Treasury bonds amounts to the same thing. When the banks receive their checks from the Fed, they have more cash on hand than they did before they sold their Treasury bonds to the Fed. Especially during crises, there is no reason for the Fed to restrain itself from making good use (though of course not overuse) of this dollar-creating power.

The Fed is also supposed to be the chief regulator of the financial system. Now is the time to make up for Alan Greenspan’s confessed failures over twenty years in this role. In exchange for the Fed protecting the private financial institutions from collapse, Bernanke must insist that the banks begin lending money again to support productive investments, while prohibiting them from yet another return to high-rolling speculation. Special measures are also needed to keep people in their homes.

The Deficit Looms

When the economy began slowing this year, the fiscal deficit more than doubled, from $162 billion to $389 billion. We cannot know for certain how much the deficit will expand. It could rise to $800 billion, $1 trillion or even somewhat higher, depending on how the bailout operations are managed. Of course, it would be utterly self-defeating for the United States to run a reckless fiscal policy, no matter how pressing the need to fight the financial crisis and recession. But in the current crisis conditions, even a $1 trillion deficit need not be reckless.

Let’s return to the Reagan experience for perspective. In 1983 the Reagan deficits peaked at 6 percent of the economy’s GDP. With GDP now around $14.4 trillion, a $1 trillion deficit would represent about 7 percent of GDP, one percentage point higher than the 1983 figure.

Of course, the global financial system has undergone dramatic changes since the 1980s, so direct comparisons with the Reagan deficits are not entirely valid. One change is that government debt is increasingly owned by foreign governments and private investors. This means that interest payments on that debt flow increasingly from the coffers of the Treasury to foreign owners of Treasury bonds.

At the same time, as one feature of the crisis, Treasury bonds are, and will remain for some time, the safest and most desirable financial instrument in the global financial system. US and foreign investors are clamoring to purchase Treasuries as opposed to buying stocks, bonds issued by private companies or derivatives. This is pushing down the interest rates on Treasuries. For example, on October 15, 2007, a three-year Treasury bond paid out 4.25 percent in interest, whereas this past October 15, the interest payment had fallen to 1.9 percent. By contrast, a BAA corporate bond paid 6.6 percent in interest one year ago but has risen this year to 9 percent. As long as the private financial markets remain gripped by instability and fear, the Treasury will be able to borrow at negligible interest rates. Because of this, allowing the deficit to rise even as high as 7 percent of GDP does not represent a burden on the Treasury greater than what accompanied the Reagan deficits.

There is, then, no reason to tread lightly in fighting the recession, with all its attendant dangers and misery. Indeed, severe misery and danger will certainly rise as long as timidity–the path of least resistance–establishes the boundaries of acceptable action. The incoming Obama administration can take decisive steps now to defend people’s livelihoods and to reconstruct a viable financial system, productive infrastructure and job market on the foundation of a clean-energy economy.

This is the program that is going to generate the 2.5 million jobs President Select Obama has promised us.

How can we doubt him?

Indeed, this is almost word for word what Obama has said about the economy.

This is what we are going to get. Or, at the very least, what Mr. Obama is going to try to impose upon us.

Please re-read this piece carefully. These are the ravings of a maniac.

Which is further evident from these two clips of Mr. Pollin’s musings on the current financial collapse and capitalism in general (surprise — he hates it), via YouTube:

Let’s be sure to thank all of our fellow citizens who voted for Mr. Obama — and his dangerous friends.

This article was posted by Steve Gilbert on Saturday, December 6th, 2008. Comments are currently closed.

27 Responses to “How Obama Plans To End The Recession”

  1. U NO HOO

    The hat looks like it would be worn in a Breyer’s Ice Cream plant.

    http://www.icecreamusa.com/breyers/

  2. Helena

    What a bunch of stupid frickin gobbledygook. Here’s just a bit of unassailable “logic” from on high about why taxpayers should NEVER get to have charge of their own money:

    “What about another round of across-the-board tax rebates, such as the program the Bush administration and the Democratic Congress implemented in April? A case could be made for this in light of the financial stresses middle-class families are facing. However, even if we assume that the middle-class households will spend all the money refunded to them, the net increase in employment will be about fourteen jobs per $1 million spent–about 20 percent less than the green public-investment program (the main reason for this weaker impact is the lower domestic content of average household consumption). Also, it isn’t likely that the households would spend all their rebate money. Just as with April’s rebate program, households would channel a large share of the money into paying off debts.”

    Uh, if people pay down their debts, wouldn’t the government have to pony up less money to guarantee their credit? Can’t have that.

  3. Steve

    Here is another brief synopsis of Mr. Pollin’s great thoughts, from his “institute”:

    Congressional Testimony on a Green Economic Stimulus Program

    In the face of the current crisis, federal policymakers are considering how to structure a second economic stimulus package. In this testimony for the House Committee on Education and Labor, Robert Pollin recommends for a program focused on three areas: educational services, public infrastructure, and green investments. A program that combines these areas will have the capacity to generate nearly 3 million new jobs in the short run in response to an increased outlay of government spending of $150 billion. Over the longer term, at least another 400,000 jobs should be created because public infrastructure and green investments will create an enhanced climate for private business investment.

    http://tinyurl.com/5j8qtw

    Mr. Pollin appeared before Congress less than a month before he wrote the screed for The Nation, and already his price tag for his fantasy had doubled from $150 billion to $300 billion.

    But he must know what he is talking about, right?

  4. bill

    Looks like we exhausted the brain power of the Obama administration in one fart. Bridges to nowhere for everyone.

  5. U NO HOO

    Just to pile on, spending more for less is well, I hate to use the W-word, but it is wrong.

  6. proreason

    Obamy’s plan to bring back the good-old days of the 1930’s is one key ingredient.

    More than 50% of the population WANTED to work back then.

    He should try this experiment. Drive thru his old Chicago hood (or rather, the neigborhoods he used to skirt with the windows tight in a search for fresh arugula), and offer $12 an hour jobs to all comers. If he gets any takers, a long shot, put one of his Harvard geniuses in charge of the project, Barney Frank is well qualified, him being so compassionate and all, which will probably be building windmills. Report back in 3 months.

  7. Steve

    “More than 50% of the population WANTED to work back then.”

    That is all too true.

    As you know, the unemployment rate during the Depression was around 20%.

    But now we would have to reach probably thirty percent or even more to reach the same number of people out of work who really want to work.

    Right now official “full employment” is reached somewhere around 5% unemployment, because even the government admits there is at least 5% of the population who could work but who won’t under any circumstances.

    Of course in reality the number is probably far higher than that.

  8. pdsand

    The 5% is a far less sinister group of folks than you implied. If I remember correctly from my macroeconomics class, the 5% that is considered full employment is an allowance for people that quit to go back to school, that moved and haven’t found new work, or that their jobs became obsolete and they’re looking for a new line of work now. Those sorts of situations that are considered built into a dynamic economy like we have in America. It’s like they’re not really “out of work” at all, but just between jobs in the natural order of things. After a year of unemployment, i.e. a person who can work but won’t, or isn’t particularly looking, the department of labor calls a person a “depressed worker” and says that they’re out of the labor force, not counted as unemployed anymore. And if I’m not mistaken they don’t track those people anymore so there’s no statistics on their number. So like you said, I’m sure the true number of people who just quit working is staggering.

  9. Steve

    “After a year of unemployment, i.e. a person who can work but won’t, or isn’t particularly looking, the department of labor calls a person a “depressed worker” and says that they’re out of the labor force, not counted as unemployed anymore. And if I’m not mistaken they don’t track those people anymore so there’s no statistics on their number. So like you said, I’m sure the true number of people who just quit working is staggering.”

    That is the number I was talking about.

    I’m pretty sure these people were included in the 20% unemployed during the Depression.

    But they sure aren’t in our figures now.

  10. proreason

    I would suggest that the “depressed worker” category contains millions of people, most of whom participate in an undergroung economy that is tax-free. I haven’t seen statistics about it but it could be 20% or even more of the economy.

    Pimps, prostitutes, pushers, criminals at the bottom end, but also lots of drive-way mechanics, undercover day-cares, maids and handy-men at the top end. It would also include the 30-60% of restaurant tips that go unreported.

    Something has to explain why the unemployed wear more expensive clothes and have better toys than the average working man or woman……welfare and tax credits aren’t enough.

    That vast underground economy is also not counted (along with ALL TRANSFER PAYMENTS) when the media propagates its tiresome lie about the gap between the rich and the poor.

  11. Right2thepoint

    Even some of the specifics they mention make zero sense.

    Since when is a nurse a ‘green job’? I don’t know about where you live , but where I do about 1/3 of the help wanted ads are trying to recruit medical personnel. The rob from each other with head hunters.

    Just where are all these ‘nurses’ supposed to come from?

  12. The economy will not recover by simply throwing cash into it any more than you can BBQ a turkey using only lighter fluid.

    The lenders provide the lubricant for the economy. Business needs letters of credit for import, export, and leasing. They need short term loans to upgrade manufacturing facilities or to reduce the opportunity cost of accounts receivable but not yet paid. When the lenders are under water with billions of dollars worth of mortgage loans, they don’t have the money to lend. Throwing capital at them can allow them to lend, until that capital is gone and they are right back where they were. The only way to fix it is to create VALUE.

    My suggestions would be:

    1. From this day forward, no lender will be able to provide government guaranteed loans with adjustable interest rates or “interest only” loans.
    2. No home financed with a government guaranteed mortgage can have a “home equity loan”. If there is sufficient equity to take it out in the form of a loan, the owner’s first obligation should be to their neighbors and community and refinance the property with a non-government backed loan. We do not need a situation where default on a property’s second or home equity loan results in foreclosing on a government (read: community) backed mortgage.

    Once those two rules are in place, I would look at current foreclosures. In cases where the borrower’s financial situation is basically unchanged or improved since the original mortgage loan and the default is simply due to an adjusted interest rate having pushed the payment out of affordability, the loan should be re-originated at a fixed rate with a monthly payment in the range of the original payment.

    In cases where the economic situation of the borrower has deteriorated and they are no longer able to make even the original payments, the mortgage would be allowed to go to foreclosure. That is one you just have to toss into the “damned shame” bucket.

    Change Sarbanes-Oxley so that instead of being forced to mark mortgages to current market, they would mark to a 36-month moving average. This provides some protection against one single mortgage foreclosing in a neighborhood or one single “short sale” forcing ALL mortgages in the neighborhood being marked down immediately. This protects lenders against devastation due to short term blips in markets.

  13. BigOil

    When we build a bridge in Minneapolis, upgrade the levee system in New Orleans or retrofit public buildings and private homes to raise their energy efficiency, virtually every dollar is spent within our economy. By contrast, only 80 cents of every dollar spent in the oil industry remains in the United States. The figure is still lower with the military budget

    First of all, get rid of ridiculous regulations that prevent drilling and expanding refineries and every dollar spent on the oil industry would remain in the US. Secondly, when we increase energy production domestically, energy prices remain low so we can expand the economy. It is a concept foreign to liberals known as creating wealth. Dumping confiscated tax dollars into infrastructure and energy efficiency is a sinkhole that creates little wealth.

    Here is an example of some of those clean energy jobs BO plans to create:

    Defects stop turbines at Iron Range wind farm
    Associated Press

    DULUTH, Minn. – A wind farm on Minnesota’s Iron Range was fully online this summer, but seven of the 10 wind turbines have been shut off in recent months for repairs.

    For that reason, Taconite Ridge wind farm isn’t producing as much electricity as Minnesota Power anticipated.

    The $50 million project overlooks U.S. Steel’s Minntac mine and covers about 450 acres.

    http://www.startribune.com/local/35654849.html?

    We’ll have about 2 million people repairing windmills – in the dark.

  14. proreason

    How do windmills produce electicity when the wind isn’t blowing?

    Is it the same way solar panels produce electricity when the sun isn’t shining?

    I’m just not smart enough to understand the amazing alternative energy sources that will be transforming our country in a few short months.

    But I can’t wait to get a car with a windmill on it.

  15. proreason

    Brainstorm.

    Pay people to flap their arms and huff, puff and fart. The flapping and huffing will create the wind we need for clean energy. We capture the farts and shoot them into space to prevent global warming.

    But Obamy probably has already thought of it in the 46 years he has spent in his dorm room..

  16. joeblough

    So the answer is to use the armed power of the state to force people to spend money they don’t want to spend, on “infra-structure” things they don’t care to have … rather than spending money they might willingly part with on things they want.

    Am I getting this right?

    We force people to buy things they don’t particularly want … and that will save the economy.

    No that can’t be right.

    Ah! We pay people to make things that nobody wants, and then force other people to buy them. That will save the economy.

    No that still doesn’t sound right.

    We need more wealth, so we’ll pay people to build more bridges and schoolrooms.

    Nah …

    Let’s see … Hmmm … The accumulated folly and wisdom of 350 million people with every imaginable sort of talent and experience wasn’t quite good enough to keep the good times rolling, so we’ll replace their judgment with that of a couple of thousand bureaucrats, politicians and ivy-leaguers.

    Hmmm … Those bureaucrats, politicians and ivy-leaguers were part of the original 350 million crowd, but none of them did anything notable to stave off the problem before.

    Could that be it? Doesn’t look quite right.

    I’m running out of ideas here.

    How exactly is this supposed to work?

  17. proreason

    “Hmmm … Those bureaucrats, politicians and ivy-leaguers were part of the original 350 million crowd, but none of them did anything notable to stave off the problem before.

    not quite. They caused the problem.

    Barney Franks (Harvard), Chris Dodd (Georgetown), Franklin Raines (Harvard), Jim Johnson (Princeton).

    Now that they have reduced the wealth of the country 20%, they are working on the other 80%.

  18. Anonymoose

    But I can’t wait to get a car with a windmill on it.

    There’s a handful of those around, I know of a custom made van in England like that, and Fox had something about a car with solar panels/windmill the other day.

    A couple of things hold back these “green” power initiatives, such as lack of a perfect dielectric (way to store electricity), and an efficient way to transmit power around the world or from space. That way we could be buying solar power from the Mid-East or Africa during night and/or dark weather. Yahoo, imagine the world peace that would bring. Or we could mount solar power stations in space out of sight of all those liberals and their McMansions, but the only way I’ve heard they might transmit the power would be by microwave, which wouldn’t be good for the birds flying overhead.

    But what annoys me most is there’s simply no !$^%$! plan, Obama just wants to give money to a bunch of small businesses and hope for a miracle. We need to have major research without politics, have scientists finding out what can make energy and how much, and decide how we’ll do it.

  19. BigOil

    I had to force myself to watch this Pollin genius to get a flavor for the BO braintrust. He is the classic academic type – slightly disheveled with about weeks growth of facial hair to appear as if he’s been toiling to develope his brilliant analysis.

    Well, his brilliant analysis consists of describing the market as nothing but a series of uncontrolled crashes due to lack of regulation. He fails to mention, after each crash correction, the market continues to grow past previous highs. They are called business cycles.

    FDR pulled a bunch of marginalized anti-capitalists out of Academia just like this clown. They tinkered with the economy, creating misery. History repeats itself.

  20. madmilker

    Well….if Congress had the ba!!s …they would do what Thomas D. Schauf wrote about back in 1992….quote*The U.S. Government can buy back the FED at any time for $450 million (per Congressional record). The U.S. Treasury could then collect all the profit on our money instead of the 300 original shareholders of the FED. The $4 trillion of U.S. debt could be exchanged dollar for dollar with U.S. non- interest bearing currency when the debt becomes due. There would be no inflation because there would be no additional currency in circulation. Personal income tax could be cut if we bought back the FED and therefore, the economy would expand. According to the Constitution, Congress is to control the creation of money, keeping the amount of inflation or deflation in check. If Congress isn’t doing their job, they should be voted out of office. Unfortunately, voters can’t vote the FED or its Chairman out of office. If the government has a deficit, we could handle it as Lincoln and Kennedy did. Print money and circulate it into the economy, but this time interest-free. Today the FED, through foreign banks, owns much of our debt and therefore controls us. The FED will cease to exist as taxpayers become informed and tell other taxpayers. The news media and Congress will have no choice but to meet the demands of grass roots America.*end quote!

    Funny…$4 trillion of debt back in 1992 and today it’s more than $10….and if anyone out there thinks it only be an elephant thing…..think again!

    Spend a little time on Michael Hodges “Grandfather Economic” series and your see……..quote*In the 1990s $2.8 trillion of new debt was created; more than created in the nation’s entire history prior to 1990*end quote!

    There is no change coming…….jus more of the same O’…..print more money and never educate the taxpayer.

  21. DGA

    Proreason:
    “Pay people to flap their arms and huff, puff and fart. The flapping and huffing will create the wind we need for clean energy.”

    Well, close, but not quite the misery involved that the left prefer. Instead, think “The Matrix”, all of us in cocoons underground providing heat energy for the few, with computer programs to replace our otherwise miserable lives. Don’t any of you laugh at me now….

  22. 11ten1775

    “Just where are all these ‘nurses’ supposed to come from?”

    Someone was on Rush the other day making a similar point. Where are all the skilled workers hiding who will be able to give us this much improved infrastructure?
    The one way they could find workers (to train) is the one thing they would never consider – ending welfare. This nut job thinks that it makes sense to expand entitlement programs along with starting a huge public works program? Who the heck is going to sign up to work? Or is their plan going to put so many private contractors out of business that the skilled, trained workers have to go to work for the government?

  23. Lipstick on a PIAPS

    Hmmm…….. ACORNOMICS worked to elect a multi-cultural President but now it has to be dealt with. I guess the Bridges, Roads, etc. etc. to NOWHERE is BACK!!!!! But on a GRAND scale! The stupidity of the Democratic Party voting Public is unbelievable!

  24. cerberus6

    Filling all those great new jobs…..

    Sure sounds like those fine “green” jobs, and certainly all the infrastructure jobs would be lower paying manual labor. Government health care is not going to pay well and we are constantly told how poorly teachers are paid…

    All those manual labor jobs won’t be filled by welfare recipients, out of work financial types, hi-tech layoffs, realty sales persons, unionized auto workers (ok- maybe the auto workers). Look who are the preferred workers on infrastucture and building projects currently.

    Where are those new workers coming from?

    Opening up our borders to new Democrat voters from our southern neighbors – amnesty to all illegal workers that are here already. I’m sure Mr. Obama will be able to co-opt John McCain into forcing rallying the nation to the cause…after all the money the government will put out there for these programs to save our economy, they certainly can’t let it fail because of insufficient workers!

    The revolution of change needs all the proletariat, oops, I mean workers it can get.

    Viva el Presidente!

  25. proreason

    “Where are all the skilled workers hiding who will be able to give us this much improved infrastructure?”

    I thought that’s what our fine public school system was doing.

    Seem to recall that the average teacher’s salary in Chicago is over $100K. Surely those fine educators, with the additional boost from the Anneburg Challenge, have produced hundreds of thousands of eager, highly trained workers eager to bring us into an enlightened Green Age.

  26. DGA

    “…..to put so many private contractors out of business that the skilled, trained workers have to go to work for the government?”

    Yes, the direction B. Hussein obama and his cronies want to drive us, straight into socialism, or as it’s known, communism light.

  27. BillK

    The entertaining thing is to ask the question regarding where those road crews and such will come from.

    Most road construction jobs are skilled union jobs. New employees will have to start with scut work, and they won’t stand for that.

    Concrete forms? That’s the carpenter’s union.

    People will be “employed,” just for subsistence wages that will make Wal-Mart pay look extravagant.

    But that’s OK, the Feds will be providing food, housing and medical care anyway, right?




« Front Page | To Top
« | »