Tag Archives: government spending

Obama’s ONE mistake may be his ONLY mistake, but it’s still a BIG mistake.

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How is Obama doing?   I remain a big fan of how Obama has approached international diplomacy, basically speaking softly without putting down the carrots and big stick that America probably needs to wield to avoid international meltdowns.   (We could do this carrot and stick work much more cheaply using more carrots and less sticks with new school technology, media,  marketing and innovation, but that’s another post).

In fact it is hard to imagine what Obama critics would be saying if  Obama had actually failed at something (aside from massive spending, a very legit concern.   But spending cuts require BOTH  entitlement and military cuts first, and that’s not going to happen because neither right or left will accept smart spending.     That Government that spends best, spends least.    There are few if any exceptions, and all the founders are rolling in graves right now as they note how bureacratic insanity has inflated budgets to unsustainable levels. Yet the Tea Partiers fret over the trivial spending on stupid things and ignore the massive waste, fraud, and abuses within our 550 billion annual defense budget – clearly the obvious target for massive reforms since it does NOT sustain infrastructure, it only (theoretically) protects it.

The Obama Record:   Obviously too early to say but the results so far are remarkable:

* Economy stabilizing after potential catastrophe.

* Most banks to repay all bailout money (a story that should be headlines, but does not suit the naive agendas of tea partiers, left wing, or even mainstream folks. Geitner’s plan is not completed, but appears to have been masterful.

* No major terror attacks in US or even internationally.

* Iraq improving.

* Afghanistan unclear, but early signs of improvement.

Aside from the very important and reasonable criticism that we may have simply bought our way out of all this with massive spending, what’s the beef of the critics?     They predicted economic collapse and international terror at unprecedented levels.   We’ve had neither.   Obama’s doing fine.

We should have worked harder to balance current federal and state budgets with massive military and entitlement cuts, but the Tea Party raving fringe combines with the Democratic spendthrifts and won’t allow that obvious solution.

Without massive military spending cuts, we have a completely unsustainable spending pattern. Until the fools that pretend to be conservative recognize this totally obvious fact, the US remains economically challenged.

P.S.  Sorry kids, my generation is spending your money.   A lot of it you’ll have to repay with huge future taxes and/or massive inflation.   And you don’t even know it.   Cya.

Bailout Blues + Red Ink = Spending Revolution Needed.

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Washington does not understand why taxpayers are so angry about the bailout.   Some pundits are calling this ignorance, but I think to the extent *anybody* can predict things taxpayers know pretty much what is going on here, and realize there is major hardship ahead whether or not the bailout moves forward as proposed, as a modified bailout, or does not happen at all.    Some of this is already reflected in the stagnant broader markets we’ve seen for the past few years, and some reflected today in the Dow’s drop of about 700 at the close.  But this is not a meltdown, suggesting to me that the rumors of total market meltdowns have been at least somewhat exaggerated.

Paul Samuelson noted today in an excellent article that we are basically seeing the bankruptcy of modern economics:

Our leaders are making up their responses from day to day because old ideas of how the economy works have failed them. These ideas were not necessarily wrong, but they’re grievously inadequate at the moment

The American experiment was spawned in large part as a revolution against military-inspired spending taxation from Britain.    Few today realize that the taxation levels of the 1770’s were so tiny by today’s standards that they would not raise a modern eyebrow, let alone spawn any kind of spending revolution.

Over the past 230 years times have changed and we now expect Government to tax us at what the founders would have seen as enormous and totally unacceptable rates, and spend *even more* than they take in, leading to a deficit so large it is in my view of greater economic concern – far greater – than the current recession (which will be getting a lot worse, bailout or not).

What would restore most taxpayer’s confidence?    Massive Government spending *cuts*, not massive Government spending as proposed in the bailout.

For most of the modern era Washington’s response to problems has been massive debt spending, pushing problems forward to future generations who’ll have to pay down our debt.   The Bailout was a similar response unless you accept the optimistic notion that all of that 700 billion will come back after the toxic assets were sold off by the Government.   Most likely based on my take some but not all will come back.