I was reading a Reuters story about the proposed budget in California tonight when I saw this:

Wheelchair-bound Christina Mills, 32, of Sacramento, California said disabled workers could not afford to have subsidies for assistants cut as the governor proposed.

“If they didn’t have home-care workers to help them get dressed in the morning, they wouldn’t be able to go to work.”

Hey Christina – that sucks doesn’t it?  It’s sad, but true – if you need someone else to pay for you to get to work, you’re not earning enough to make your job worth the investment in you!  It would be cheaper for everyone if you stayed home and we payed to take care of you there.  Plus, you wouldn’t be in denial about how much your work is actually worth.

Yes, it’s harsh.  But it’s also true.

gk

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Cash for clunkers seems to be all the rage this week.  Hundreds of news stories and blog posts are telling everyone how successful it is, how it RAN OUT OF MONEY IN ONE WEEK when it was supposed to last until November, and how this will boost the economy.

Bullshit.

Here’s an excerpt from the Daily Reckoning.com explaining why it’s bullshit.

And as Bill has been pointing out, this is just another example of the government promoting the idea that the future doesn’t matter – just spend for today. He wrote in Friday’s essay: “Instead of letting the consumer buy a new car when he is ready, the feds give them money to buy now. So, he buys in 2009 and not in 2010. What good is accomplished? It is as if they didn’t expect 2010 to ever arrive…”

The Wall Street Journal backs us up here: “The subsidy won’t add to net national wealth, since it merely transfers money to one taxpayer’s pocket from someone else’s, and merely pays that taxpayer to destroy a perfectly serviceable asset in return for something he might have bought anyway. By this logic, everyone should burn the sofa and dining room set and refurnish the homestead every couple of years.”

This is what’s known as the “broken window fallacy” that I posted about in February 2008.  It’s a classic story and you can read all about it on the link, but here’s the main part as told by Henry Hazlitt’s classic “Economics in One Lesson” (Which I urge you to read.) It’s copied from my earlier post -which was copied from Lew Rockwell’s post on Mises.org.

A kid throws a rock at a window and breaks it, and everyone standing around regrets the unfortunate state of affairs. But then up walks a man who purports to be wise and all knowing. He points out that this is not a bad thing after all. The man fixing the window will get money for doing so. This will then be spent on a new suit, and the tailor too will get money. The tailor will spend money on other items, and the circle of rising prosperity will expand without end.

What’s wrong with this scenario? As Bastiat put it, “It is not seen that as our shopkeeper has spent six francs upon one thing, he cannot spend them upon another. It is not seen that if he had not had a window to replace, he would, perhaps, have replaced his old shoes, or added another book to his library. In short, he would have employed his six francs in some way which this accident has prevented.”

You can see the absurdity of the position of the wise commentator when you take it to absurd extremes. If the broken window really produces wealth, why not break all windows up and down the whole city block? Indeed, why not break doors and walls? Why not tear down all houses so that they can be rebuilt? Why not bomb whole cities so construction firms can get busy rebuilding?

It is not a good thing to destroy wealth. Bastiat puts it this way: “Society loses the value of things which are uselessly destroyed.”

It sounds like an unexceptional claim. But herein rests the core case against everything the government does. Perhaps, then, we can see why the allegory is not better known. If we took it seriously, we would dismantle the whole apparatus of American economic intervention.

If you are with me to this point, perhaps you have a hard time believing that anyone really believes that wealth destruction is actually a good thing. Let me try to show that the fallacy is as pervasive as ever.

After every natural disaster, we at the Mises Institute start what we call the “Broken Window Watch.”

After hurricane Katrina, the Labor Secretary said, “[W]hat will happen — and I have seen this in previous catastrophes and hurricanes — there is a bright spot in that new jobs do get created.”

And The Economist said, “While big hurricanes like Katrina destroy wealth, they often have a net positive effect on GDP growth, as the temporary downturn immediately after the storm is more than made up for by the burst of economic activity that takes place when the rebuilding begins.”

And the New York Times said, “Economists point out that although Katrina has destroyed a lot of accumulated wealth, it ultimately will probably have a positive effect on growth data over the next few months as resources are channeled into rebuilding.”

That’s what we’re doing with Cash for Clunkers.  We’re diverting capital from where it would naturally go into a program to destroy valuable assets and replace them.

Why not apply the concept elsewhere? How about cash for houses? Cash for liquor? Cash for newspapers? Cash for trips to Europe?

Yes, there will be a temporary boost to the economy, but it comes at the expense of next year, and the next year, and the next year.  WHO IS PAYING FOR IT?  We all are, and all we’re actually doing is postponing the day of reckoning.  You cannot borrow your way out of debt, and that’s what this program is trying to do.

gk

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I don’t know why this hasn’t been brought up in any of the California budget news that I’ve seen.  The state of California is issuing IOU’s instead of paying people and companies.  I’m no lawyer, but that practice obviously (it’s obvious to me anyway) violates the US Constitution.  Article I, Section 10, titled “Powers prohibited of States”, states:

No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.

Let me summarize it this way – No State is allowed to use anything except US Dollars as payment for anything.  They cannot print their own money, they cannot “emit bills of credit” which are IOU’s.  Here’s the definition of “bills of credit“: a paper issued by a State, on the mere faith and credit of the State, and designed to circulate as money.

That’s why California can’t require banks and others to accept them – IOU’s aren’t money and the state is specifically prohibited from using IOU’s as money.  I’m guessing that the only reason they’re allowed to do it is that no one has filed a suit to challenge it.  Californians want their bread and circuses.  Who cares if they are being paid with worthless pieces of paper?

Dumb-asses.

gk

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Just scanning the headlines on Google News tonight and happened across this in the NY Times.

The highly complex tactic has become a cause of growing concern within the Internal Revenue Service in recent years because it deprives the Treasury of billions of dollars a year, according to private-sector estimates.

It “deprives the Treasury of billions of dollars a year”?  Really?  How about phrasing it something like “it doesn’t take billions of dollars a year from the companies who earned it”?

BTW – The “highly complex tactic” simply says that a company isn’t taxed on money it earns outside of the country as long as it re-invests the money in the country where it was earned.  As in building a better, more efficient factory, or buying the materials it needs to keep producing the product

The NY Times (and Obama) seem to think that they are being “deprived” of billions of dollars per year.  How?  Did they earn it?

That’s what I thought.  Now shut up and quit spending so much of our money.

gk

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It’s probably the understatement of the decade to say that I’m no fan of bailouts, but the proposal to tax 100% of the bonuses at AIG because they’re using our money is ridiculous.

Even though Bush trampled all over it, we have this document called the Constitution which limits what the government is allowed to do.  The Constitution allows amendments, and one of them is the 14th Amendment.  In part it says:

No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any state deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.

In other words, what’s good for the goose is good for the gander.  Laws need to apply equally to everyone or they’re invalid.  At least that’s the theory….

We’ve seen hundreds of examples where that’s been ignored – farm bills, auto regulations, welfare, tax breaks etc. – but that doesn’t make it right.  Passing a law that applies to AIG (or any other subset of citizens) to tax certain wages at 100% is blatantly unconstitutional.

That won’t stop it from passing, but it should.  That should tell you just how much our elected Representatives, Senators, and the President know about the constitution.  And it should show you why we need to vote them out.  All of them.

Go back to a citizen legislature and we’d all be better off.

gk

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Capitalism is almost dead in the US.  What follows is a copy and paste of part of yesterday’s Daily Reckoning.  You need to read it – both what follows and the Daily Reckoning site.  Enjoy!

gk

Obama’s new budget is the biggest bag of leeches to come along since the Roosevelt Administration. We have not seen it in detail. But from what we’ve gathered from the press reports, it has something in it for almost every bloodsucker.

The raw numbers are breathtaking. Whereas the feds have taken about 21% of the nation’s income in recent years, now they’re going to take 28%. The deficit alone will equal more than 12% of total GDP.

Put the feds together with state and local hacks, altogether they will consume 40% of the nation’s total output. Whoa…that’s put it close to the levels of such free-market bastions as Zimbabwe and Algeria, both with 43% of spending done by government…and Hugo Chavez’s Venezuela, where the government spends 41% of GDP.

By contrast, in France, that socialistic, bureaucrat-saturated country with the croissants, 53% of GDP is spent by the government. But wait…in France healthcare is a government industry and so is the passenger train system. In America, 17% of GDP is spent on healthcare. As for the passenger trains…forget it…in America, we scarcely have any. So, if you add the 17% spent on private healthcare to the 40% you actually get a total higher than that of France. Ooh la la…the age of big government is back!

Who pays?

Ah…that’s an interesting subject in itself. Obama says he’s going to soak the rich. But the rich are already pretty well marinated. Reagan’s tax cuts freed them to earn more money – and pay more taxes. Now, the top 5% pays 60% of the costs of government. The bottom 40% pay no taxes at all. They get all government ’services’…which is to say their boondoggles…for free.

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I’m not a Republican (or a Democrat), but I like this.

Honk if you're paying my mortgage

The only thing that might be better is if it said “Honk if I’m paying your mortgage”

Or maybe a few others:

Honk if you’re bailing out my bank.

Honk if I’m bailing out your bank.

Honk if you’re tired of bailouts.

Honk if bailouts suck.

Honk if you got stimulated.

Honk if I’m stimulating you.

Honk if you want to stimulate me.

Honk if you have a massive stimulus package.

Honk if you got off on Obama’s package.

Honk if you got stimulated by Obama.

Honk if you’re tired of stimulation.

And finally – Stimulate this!

gk

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There’s a proposal to institute a new income tax in Tennessee, and you can read the full text of the proposed bill here.

It’s called the “Tennessee Modernization and Economic Stimulus Act”, as if by calling a tax an “economic stimulus” suddenly makes it different than simply calling it a new tax.

One of the reasons I moved to Tennessee was that there wasn’t a state income tax.  Revenues to the state are mainly via a sales tax, which is the fairest method.  Think about it. Here are a few points as to why I think the sales tax is good, and the income tax is bad.

• If you make $200,000 per year, you’re probably buying more expensive clothes, food, cars, boats, etc. than someone making $40,000, so you’re paying a lot more in taxes.
• With a sales tax, the more you spend on items, the more you pay in taxes.  The state currently receives 7% of a $200 restaurant bill, and 7% of a $5 McDonald’s meal.  Which one brings in more revenue?  Who is paying more?  (Hint – It ain’t the poor!)
• A sales tax doesn’t penalize you for working more, getting a raise, or getting a better job.
• A sales tax encourages savings/investment and paying down debt to avoid taxes – both of which are extremely good things for long term financial health.
• An income tax forces employers to spend more more for bookkeeping and accounting.

To sum it up, I think this is a Bad Idea.  An income tax is simply a way for politicians to say they’re making “the rich” pay their fair share and to get their hands into another cookie jar.  Just say no.

gk

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Ransom note?  Robbery note?  Hold-up note?  I’ve heard it refrred to by all those terms, but according to a one page “research note” by Joseph LaVorgna of Deutsche Bank, the US taxpayer is hosed no matter what the government does.

I heard about it on NPR – of all places – on Friday this week, and bookmarked it so I could comment on it when I had time.  NPR actually had a very good discussion about it on Friday morning, and the text of the discussion is here.  You can listen to the discussion here.   It’s pretty good.  But back to the ransom note.

In the note, Mr. LaVorgna says We have consistently argued the financial plumbing will remain broken and the economy will grossly under-perform as long as troubled assets reside on bank balance sheets. Moreover, the longer authorities wait to fix the problem, the bigger it will become because collapsing activity will turn good assets into bad ones.

Hey, I’ve got no problem with that.  I’ve been saying basically the same thing for the past year.  My disagreement comes in when Mr. LaVorgna goes on to give his prescription to fix the problem.  He wants the government (me and you) to pay up.  He basically says that you can pay me now or pay me later – but you’re gonna pay me no matter what.

In regards to the government buying up toxic assets, he says:  One main stumbling block to the purchasing of troubled assets has been pricing, specifically how does the government price a diverse set of assets in a way that does not put the taxpayer on the hook.  However, this should not be the standard by which we judge the efficacy of the plan, because a more prolonged deterioration in the economy will result in a higher terminal unemployment rate and a greater deterioration of the tax base.

As such, the decline in tax revenues will crimp many of the essential services provided by the government. Ultimately, the taxpayer will pay one way or another, either through greatly diminished job prospects and/or significantly higher taxes down the line to pay for the massive debt issuance required to fund current and prospective fiscal spending initiatives.

I agree that taxpayers will pay something no matter what (I don’t have to like it, but it’s true) but I think he over-estimates the damage that letting these mismanaged banks fail would do to the economy. Yes, the current recession would be worse – but I think we’d already be rebounding if the government wouldn’t have intervened.  And the institutions that we’re dumping trillions of dollars into would be gone.

Others would have purchased the assets of these badly managed companies – like Bank of America, CitiGroup, and GM.  Investors in those companies would have taken massive losses, and the insurers of their bonds such as AMBAC and MBIA would also be wiped out.  So what?  A fool and his money should be soon parted.

Other institutions would have bought up the good assets at fire sale prices, and investors in those companies would be richly rewarded.  Which is how a free market economy works.

My biggest issue with the note is his suggested remedy to the problem:  We think the government should do the following: estimate the highest price it can pay for the various toxic assets residing on financial institution balance sheets which would still return the principal to taxpayers.

In other words, he wants the bailouts to continue, no matter what the cost.  I added no matter what the cost because the US government is also broke.  We don’t have the money to buy “toxic assets”.  We’re borrowing money right now to pay for the normal (grossly bloated) budget.  And you can’t pay down debt – which is what needs to happen – by borrowing more money.

Robbing Peter to pay Paul doesn’t work – no matter who does the robbing.  The last line of the NPR story I referenced above is something I can agree with: While they might disagree on who will bear the brunt of that pain, all the experts interviewed for this report say the longer the U.S. waits, the worse it will be for everyone.

Stop the bailouts now.  Quit trying to pretend there’s an easy way out.  Take your medicine and pay down the debt.  That will fix this problem.

gk

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I’m continuing to read the stimulus bill, I’ll add stuff here that I think is stupid.  Stupid as in it doesn’t do a damn thing to stimulate the economy and doesn’t actually help people who are out of work.  Keep in mind that is you simply gave each taxpayer an equal portion of the $787 billion stimulus bill, each person would get $5702.90 to blow to stimulate the economy.

Of course, each taxpayer actually owes $5702.90 simply to pay for their portion of the bill, so if we gave each of them that much money, we’d all be even.  Therein lies the flaw in the stimulus bill.  Governemnt doesn’t create anything – it simply takes money from one group and gives it to another group.  Minus their cut of course.

In other words, they’d actually acheive a higher stimulus rate by simply letting each of us taxpayers keep our own damn money – but then they wouldn’t be seen as “doing something” and they wouldn’t get re-elected.

Back to the bill.  As before, comment in [these brackets] are mine.  An ellipsis (…) means I cut out some text to make it readable, and text in italics is a 100% accurate quote.

Picking up where I left off yesterday on page 17 of the PDF version of the actual bill:

• $2.5 billion to the National Science Foundation for ‘‘Research and Related Activities’’
• $1,474,525,000 to improve, repair and modernize Department of Defense facilities, restore and modernize real property to include barracks, and invest in the energy efficiency of Department of Defense facilities. [WTF does installing CFL's have to do with getting the economy moving?]
• $657,051,000 [to the Navy, for the same crap as the Army got just above.]
• $113,865,000 [Gotta get some CFL's for the Marines too - even though they're on Navy ships...]
• $1,095,959,000 [Crap! we forgot to give money to the Air Force for CFL's!]
• $98,269,000 [Army Reserve needs lights too.]
• $55,083,000 [Don't forget the Navy Reserve!]
• $39,909,000 [Or the Marine Reserve - can you guess what's coming next?]
• $13,187,000 [Yup, gotta give the Air Force Reserve CFL's too.]
• $266,304,000 [Crap, are we done yet?  This is for the Army National Guard "energy efficiencies"]
• $25,848,000 [Guess not - Air National Guard gets new lights too.]
• $75,000,000 [Times 4, each branch gets this for Research, Development, Test and Evaluation. Of what?]
• $400,000,000 to improve, repair and modernize military medical facilities, and invest in the energy efficiency of military medical facilities. [Didn't we just do this above?]
• $25 million for the Corps of Engineers for ‘‘Investigations’’ [Quotes are original.  No I don't know what it means either, but they get $25 million to do it with.]
• $375 million For an additional amount for ‘‘Mississippi River and Tributaries’’
• $2.075 billion For an additional amount for ‘‘Operation and Maintenance’’ [Of what?  Why?  how's this gonna create jobs? They don't say.]
• $100 million For an additional amount for ‘‘Formerly Utilized Sites Remedial Action Program’’ [$100 million to pay for crap we aren't using anymore?]
• $1 billion (say it like Austin Powers) For an additional amount for ‘‘Water and Related Resources’’
• $16.8 billion For an additional amount for ‘‘Energy Efficiency and Renewable Energy’’ [I thought we covered this with the defense department CFL crap above, but it looks like the DOE got their hand in the cookie jar too.]
• $2 billion in grants to manufacturers of advanced battery systems and vehicle batteries [Don't forget, italics are 1005 quoted text, no changes.]
• $4.5 billion for expenses necessary for electricity delivery and energy reliability activities to modernize the electric grid [Aren't expenses for utility companies part of our electric bills?  Who cares?  Here's $4.5 billion to utility companies!]
• $3.4 billion For an additional amount for ‘‘Fossil Energy Research and Development’’ [ WTF?  I thought we we trying to get rid of fossil fuels, here we're giving out billions to do more research on them!]

I swear I’m not making any of this up.  And I’m skipping lots of stuff that either bores me or might – and I mean MIGHT actually makes sense.  Here’s one that just kills me:  $1.6 billion For an additional amount for ‘‘Science’’.  That’s it.  No explanation.  Just “Science”.  And the quotes are original.  It could be going for political science.  No one knows because it isn’t defined in the bill.

Back to the fun….

• $5.127 billion For an additional amount for ‘‘Defense Environmental Cleanup,’’
• $3.25 billion For the purposes of providing funds to assist in financing the construction, acquisition, and replacement of the transmission system of the Bonneville Power Administration [Doesn't the Bonneville Power Administration have paying customers?  Why are we giving them tax dollars?]

I’m hoping everyone reading this realizes what a pain it is to scroll through page after page of deliberate obfuscation in order to find the actual spending appropriations.  I’m talking about crap like this: ‘‘(F) OPEN PROTOCOLS AND STANDARDS.—The Secretary shall require as a condition of receiving funding under this subsection that demonstration projects utilize open protocols and standards (including Internet-based protocols and standards) if available and appropriate.’’.
(4) By amending paragraph (2) of section 1304(c) to read as follows:
‘‘(2) to carry out subsection (b), such sums as may be necessary.’’.
(5) By amending subsection (a) of section 1306 by striking ‘‘reimbursement of one-fifth (20 percent)’’ and inserting ‘‘grants of up to one-half (50 percent)’’.
(6) By striking the last sentence of subsection (b)(9) of section 1306.
(7) By striking ‘‘are eligible for’’ in subsection (c)(1) of section 1306 and inserting ‘‘utilize’’.

That’s a direct quote.  Damn, someone should pay me to read through this.  I don’t know why, cause I’m doing it anyway, but it should be worth something. 

• $8 million for financial assistance, technical assistance, training and outreach programs designed to benefit Native American, Native Hawaiian, and Alaskan Native communities
• $5.55 billion For an additional amount to be deposited in the Federal Buildings Fund
• $300 million For capital expenditures and necessary expenses of acquiring motor vehicles with higher fuel economy, including: hybrid vehicles; electric vehicles; and commercially-available, plug-in hybrid vehicles [Didn't we already have an auto industry bailout?]

That’s it for tonight  I’ve been up too late too many nights in a row.  Gotta get some sleep.  Let me know if you see anything on here that looks like it could possible be stimulating. 

gk

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In perusing the Recovery.gov site, I found some interesting things.  It doesn’t say anything, but it has a link, to a link where you can read the whole text of the bill.  You can click 4 times through the various websites and messages to get there, but eventually you wind up here. (One click, I promise.)

The short title of the bill is the “American Recovery and Reinvestment Act of 2009″.  I’m reading through it, and I’ll copy some important stuff later.  Here are a few choice quotes from the recovery.gov FAQ:

Q: How will the Recovery Act work?
A: Very soon, the different agencies — such as the Departments of Education; Health and Human Services; and Energy — will decide who will receive award grants and contracts. Sometimes the money will go to a state government; other times, the funds will go directly to a school, hospital, contractor, or other organization. Agencies will then deliver that information to the Recovery.gov team. We will subsequently make the information available on Recovery.gov, and you will be able to track where the money is going. You’ll be able to search by state or even by Congressional district; you’ll be able to look up names of Federal contractors or other recipients of Federal dollars; and you’ll be able to send in comments, thoughts, ideas, questions, and any responses you have to what you find.

So these agencies will decide who gets our money.  Neither the President nor Congress knows right now.  Which means there’s no way Congress knew when they voted to spend the money.  Which means they voted for a “pig in a poke“.

And when they say “you’ll be able to look up names of Federal contractors or other recipients of Federal dollars”, I hope they mean it.  I want to see who, by name, got my money to help pay their mortgage.

Q: I heard I’d be able to track recovery funds. Why can’t I do that?
A: You aren’t able to track funds yet because we have not yet started receiving information from Federal agencies on how they are going to allocate the money.

Same as above.  They’re basically saying that “we gave these agencies a boatload of your money – and we don’t have a clue what they’re going to do with it”.

Ok, on to the actual bill.  This is going to be basically random copy and paste portions of the bill as I read things that I think are stupid.  Or that have absolutely nothing to do with economic stimulus or recovery.  In other words, things that are a bunch of crap that shouldn’t be receiving our tax money under any circumstances – especially under the guise of a stimulus package to create jobs.

The parts in italics are direct quotes.  I’ve cut a lot of verbiage.  When you see “….” that means that I edited a chunk of text that merely makes it unreadable.  You are welcome to read the bill yourself if you think I changed the meaning of the text by this editing.  I don’t think I did, but you can read it and make your own decision if you’d like.   Any text [inside of these brackets] are my comments.

• $1.38 billion for direct loans and grants for the rural water, waste water, and waste disposal programs
• $2.5 billion for the cost of broadband loans and loan guarantees
  
• $290 million for ‘‘Watershed and Flood Prevention Operations’’
• $100 million for National School Lunch Program equipment
• $500 million for the special supplemental nutrition program
• $150 million For an additional amount for the emergency food assistance program
• Section 101 doesn’t provide a dollar amount, but it states the value of benefits ….  for Puerto Rico and American Samoa …. shall be calculated using 113.6 percent of the June 2008 value….
• Another one with no cost listed.  ….the Secretary of Agriculture may not reduce the value of the maximum allotments, minimum allotments or consolidated block grants for Puerto Rico and American Samoa.… [WTF?]
• $5 million For the costs relating to facility improvements and equipment upgrades associated with the Food Distribution Program on Indian Reservation [Side note - this section also contains one of the many loopholes big enough to drive a supertanker through - it states]  (f) FUNDING.—There are appropriated to the Secretary out of funds of the Treasury not otherwise appropriated such sums as are necessary to carry out this section. [In other words, they are saying that "if we didn't actually give you enough money, we hereby give you the right to take as much money as you think you need to do the bullshit that we asked you to do.]
• Dozens of items relating to farm programs with absofuckinglutely no numbers given, but where Congress authorized them to spend our money.  Crap that gives agencies a blank check like this one (E) AUTHORITY OF THE SECRETARY.—The Secretary may provide such additional assistance as the Secretary considers appropriate to provide equitable treatment for eligible producers on a farm that suffered production losses in the 2008 crop year that result in multiyear production losses, as determined by the Secretary. [Bullshit.  With a capital B.]
• $50 million to assist eligible aquaculture producers for losses associated with high feed input costs
• $1 billion For an additional amount for Periodic Censuses and Programs [WTF are we giving the Census Bureau an additional $1 billion for?]
• $4.7 billion for Broadband Technology Opportunities Program [We already gave them $2.5 billion - why a separate line giving them another $4.7 billion?]
• $650 million for Digital-to-Analog Converter Box Program [Ummm, that was already supposed to be over with - just like the bailout goes on longer and costs more money, the DTV conversion is also dragging on and getting more expensive.]
• $360 million for Construction of Research Facilities
• $225 million for Violence Against Women Prevention and Prosecution Programs
• $2 billion for the Edward Byrne Memorial Justice Assistance Grant program
• $225 million for assistance to Indian tribes
• $1 billion For an additional amount for ‘‘Community Oriented Policing Services’’
• $10 million For an additional amount, not elsewhere specified in this title, for management and administration and oversight of programs within the Office on Violence Against Women, the Office of Justice Programs, and the Community Oriented Policing Services Office [We gave them billions just above - this is an additional $10 million to administer the programs we gave them the money for!]

Believe it or not, I’m skipping billions of dollars of spending – either because it didn’t make for an easy copy and paste, or I thought it might actually create a few jobs.

Here’s something else you won’t believe – I’m only on page 16 of the bill!  ALL of the above spending is in the first few pages, I haven’t gotten anywhere near the good stuff yet.  For example, here’s how page 17 starts out:

SCIENCE
For an additional amount for ‘‘Science’’, $400,000,000.
AERONAUTICS
For an additional amount for ‘‘Aeronautics’’, $150,000,000.
EXPLORATION
For an additional amount for ‘‘Exploration’’, $400,000,000.
CROSS AGENCY SUPPORT
For an additional amount for ‘‘Cross Agency Support’’,
$50,000,000.
OFFICE OF INSPECTOR GENERAL
For an additional amount for ‘‘Office of Inspector General’’,
$2,000,000, to remain available until September 30, 2013

That’s over $1 billion in just a few lines at the top of the page – and that’s just NASA’s portion of it.  Just below that the National Science Foundation gets $2.5 billion for Research and Related Activities.

Someone tell me how any of the stuff above is supposed to stimulate the economy.  How does it create jobs – other than paying bureaucrats to administer the programs.  We’d create more jobs by paying a group of people to dig holes on even numbered days – then fill them in on odd numbered days.  And we’d accomplish just as much.

It’s midnight and I’m going to bed.  I’ll probably add to this or post another article later when I read more of this crappy waste of our money.

gk

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Someone must have screwed up, because when Bush made his speech the other night, he actually got part of it right.  In the past 7 years, you can probably count on one hand the number of times that has happened.  It’s probably lower than mere chance would allow!

I’ve said it before, but it bears repeating – GWB is the worst president in my lifetime – perhaps ever.  I’m 46, so that includes such fuck ups as LBJ, Nixon (who actually bears the brunt of the blame for removing us from a semi-gold standard which led to the financial mess of today) Ford, Carter (I didn’t think anyone could ever top Carter in incompetence!), and Bush I.

The Daily Show had a great segment last night comparing the speech Bush made before the start of the Iraq invasion to the one he gave Wednesday night.  Pretty hilarious!  Terms like “crisis”, “immediate action”, “urgent”, etc, were used in almost the exact same context in 2003 as they were in 2008 – and both were mostly lies.

Anyhoo – here’s the part that Bush got right.  I’ll highlight a few things that I feel are especially pertinent to this “crisis”.

Here’s part of Bush’s speech as transcribed on Whitehouse.gov:

First, how did our economy reach this point?

Well, most economists agree that the problems we are witnessing today developed over a long period of time. For more than a decade, a massive amount of money flowed into the United States from investors abroad, because our country is an attractive and secure place to do business. This large influx of money to U.S. banks and financial institutions — along with low interest rates — made it easier for Americans to get credit. These developments allowed more families to borrow money for cars and homes and college tuition — some for the first time. They allowed more entrepreneurs to get loans to start new businesses and create jobs.

Unfortunately, there were also some serious negative consequences, particularly in the housing market. Easy credit — combined with the faulty assumption that home values would continue to rise — led to excesses and bad decisions. Many mortgage lenders approved loans for borrowers without carefully examining their ability to pay. Many borrowers took out loans larger than they could afford, assuming that they could sell or refinance their homes at a higher price later on.

Optimism about housing values also led to a boom in home construction. Eventually the number of new houses exceeded the number of people willing to buy them. And with supply exceeding demand, housing prices fell. And this created a problem: Borrowers with adjustable rate mortgages who had been planning to sell or refinance their homes at a higher price were stuck with homes worth less than expected — along with mortgage payments they could not afford. As a result, many mortgage holders began to default.

These widespread defaults had effects far beyond the housing market. See, in today’s mortgage industry, home loans are often packaged together, and converted into financial products called “mortgage-backed securities.” These securities were sold to investors around the world. Many investors assumed these securities were trustworthy, and asked few questions about their actual value. Two of the leading purchasers of mortgage-backed securities were Fannie Mae and Freddie Mac. Because these companies were chartered by Congress, many believed they were guaranteed by the federal government. This allowed them to borrow enormous sums of money, fuel the market for questionable investments, and put our financial system at risk.

There’s not much disagreement anyone should have with that.  One point that I want to make sure everyone understands is what started this process – the Feds lowered interest rates too far, and kept them artificially low for waaaay to long.  Individuals and institutions basically had free money to play with – and they played.

I’m in the IT business, and when we have a problem, we conduct a “root cause analysis” which examines the real cause of the problem, then we use that info to figure out how to prevent the problem from happening again – ever.

So, root cause for this “crisis” is the Federal Reserve interest rate policy from about 2002 through 2005.  Still with me?  Good.

So, what enabled the problem to continue until it reached “crisis” proportions?   Fannie and Freddie – the Government Sponsored Enterprises (GSE’s) – bought up the bad debt from the companies who originated the bad loans – enabling them to originate more bad loans because they didn’t have to worry about being paid back.

Fannie and Freddie had already paid them, so they had money to lend to make more bad loans…. Which they sold to Fannie and Freddie which enabled them to make more bad loans….  Which they sold to – I hope you get this, because I don’t want to say it again!

Ok, still with me?

There’s one last key part that needs to be mentioned.  The part where Bush said “many believed they were guaranteed by the federal government”. This is key because investors (including many foreign governments, hedge funds, and state pension funds) bought the mortgage backed securities from Fannie and Freddie specifically because they had an implicit guarantee from the federal government – after all, what does “Government Sponsored Enterprise” mean?

So what’s the key ingredient in all of these key points?  The government.  The federal government created this mess, the federal government kept it going and growing long after normal market forces would’ve caused it to slow down or stop, and the federal government got gullible investors to buy up the toxic crap, repackage it, and sell it to other (still more gullible) investors.

This same government is the one who now says they need $700 billion and a bunch of new regulations to clean up the mess.  And a bunch of people and gullible investors believe them!  Give me a break!

Here’s the gk plan – let the stupid assholes who spent more than they could afford, gave loans to people who couldn’t pay them back, and bought the loans from the people who originated them – let them all eat cake.

Let them go broke.  Wiped out.  Bankrupt, disappear, and otherwise vanish.  The are stupid and they should reap what they sowed.  Idiots!

But that’s not Bush’s plan.  His plan is to make all of us fork over our money to bail out these stupid people.  That’s a dumb plan.  I don’t care if it’s called a bail out or a rescue, it’s still a dumb plan

gk

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This ticked me off.  In part, it says:

“Without adequate funding, we are jeopardizing some of the world’s most spectacular wildlife and wild lands,” said Evan Hirsche, president of the National Wildlife Refuge Association and chairman of the Cooperative Alliance for Refuge Enhancement.

Pull your taxpayer funded head out of your ass Evan.  It’s a “wildlife refuge” not a national or state park.  Why the hell do you need hundreds of millions of dollars in funding to keep something natural?

I understand about parks, those are different – they’re set up for people to visit and you need certain facilities.  A “wildlife refuge” is not the same.  People shouldn’t expect boardwalks and carpet in visitor centers.

According to the story, Alaska has 76 million acres of refuge lands and accounts for 83 percent of land in the refuge system. Managing those lands can be particularly daunting given the sheer size and remoteness of many of the state’s 16 refuges, said Todd Logan, regional chief of the National Wildlife Refuge System in Alaska.

Excuse me, but if 83 pecent of the land in the refuge system is in Alaska, I don’t think prostitution, growing pot, and illegal immigrants camping in the refuge should be much of a problem.

Get your own funding and keep your greedy paws out of my wallet.

gk

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The Tennessee basketball team is ranked high in all the polls, but how are they gonna celebrate when they win?  Check out this story.

“The arrest is aimed at drying up the sale of untaxed liquor and putting one of the best in the field out of business.”

It all comes down to the fact that the government isn’t getting its’ cut.  There’s really no difference between local thugs and gangs who demand “protection” money and our federal government – except the feds have more guns and can do it legally.

Be sure to read the comments  on the WBIR story I linked to above.  Along with the normal stupidity, there are some good points being made.

gk

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