$100 Million in Budget Cuts - Short Video to Provide Perspective

Only 100 seconds, and is a good visualization.... Video

Government to own 50% of GM?

Private Property. This is one of the founding principles of Western civilization and capitalism. If you borrow someone's private property, you have to pay it back (It's not optional). GM has borrowed $27 billion from its bondholders. If GM cannot repay these debts on time with interest, then according to all the laws of this country and 1,000 years of common-law tradition, GM's assets are legally transferred from the company's equity investors to the bondholders through bankruptcy. Those are the rules (equity is what is "left over" after all other claims have been satisfied). However this Administration does not seem to want to play by the rules.

The U.S. government is demanding a 50% equity stake in the restructured GM. On what basis, you might ask? True, they have put $15 billion into the company, but only after GM should have filed for bankruptcy. In other words, without the government's "help," the bondholders would have gotten 100% of the new company. Now, even though the bondholders (you, me, our pension plans) are still owed $27 billion (almost twice what the government is owed), they (we) are being asked to accept only 10% of the equity in the new GM. So the government get's 50% and the unions get 39%; while the company's legitimate creditor's receive 10%. How fair is that?

Capitalism doesn't work when debts aren't repaid. Capitalism doesn't work when legitimate creditors are put last in line – behind the government and the union. What impact do you think this will have on lenders? Would you be willing to lend money to a company, knowing that the government may come in, disregard your rightful claims and steal your money?

TARP Funds Closer to $3 Trillion than the $700 Billion Passed Last Fall

More troubling news about the TARP bailout (in addition to the fraud investigations and the threats made by the government to banks):

On April 21, the Special Inspector General for the Troubled Asset Relief Program Act of 2009--"SIGTARP"--submitted his quarterly report to Congress on his office's activities in relation to the TARP program. The report is a disquieting document that should be read by every American--certainly be every taxpayer.

The Inspector General's report documents the stunning and at least partly illegal expansion of TARP from the $700 billion originally allocated by Congress to what is now a $3 trillion complex of programs. This chart shows the various programs that are now included within SIGTARP's oversight, and how they have expanded from the initial $700 billion. Note that some of the programs are still incipient; $3 trillion is by no means a final number.

It is also distressing that the Treasury is refusing to tell taxpayers how this money is being spent (this is from the SIGTARP report):

In light of the fact that the American taxpayer has been asked to fund this extraordinary effort to stabilize the financial system, it is not unreasonable that the public be told how those funds have been used by TARP recipients. Treasury is now conducting regular surveys of the banks' lending activities; however, with the exception of Citigroup and Bank of America, Treasury has refused to seek further details on TARP recipients' use of funds.

The entire report is available here.

Proposed Federalism Amendment

A concern of many Americans has been the expansion of power by the federal government. This expansion grew under the Bush Administration, and has accelerated under the Obama Administration.

One idea being floated is a set of amendments to the U.S. Constitution that would clarify and define the power of the federal government vs. the power of the states vs. the rights of the individual.

Here are several links with information about this proposal:

• Opinion piece in Wall Street Journal
• Brief description of proposed amendment(s) with links to video discussion and detail
• Proposed draft of amendment(s) text
  

The process for amending the Constitution is well-defined and fairly arduous. This was intentional - the founding fathers wanted us to be able to change the Constitution, but only after deliberation and with the support of a super-majority of citizens. For information on the process to amend the constitution, go here.

Congress Plans to Avoid Debate on Health Care Reform

The Democratic leaders of Congress are finalizing a plan so that the proposed health care reform will only have to meet 51 votes, not the usual 60 required to cut off discussion. The White House and Congress are using this technique to avoid debate on the matter (since Democrats have a majority in both the House and the Senate).

Health Care reform is an important and complex issue which should be discussed at length before being implemented. It looks like that won't be happening.

Obama Uses 9,000 Gallons of Fuel on Earth Day

President Obama flew to Iowa yesterday to make his Earth Day speech (I think because they have wind power there).

President Obama could have saved at least 9,116 gallons of fuel by giving his speech at the White House – but no wind turbines are manufactured here.

Another case of "do as I say, not as I do?"

Bailout Recipients Continue to Lobby Congress

From the Associated Press:

The top 10 recipients of the government's $700 billion financial bailout spent about $9.5 million on federal lobbying during the first three months of the year.

The biggest spender was bailed-out automaker General Motors Corp., which devoted $2.8 million to lobbying in the first quarter of 2009. It has received $13.4 billion in government loans and could get $5 billion more, according to a government report released Tuesday

It sure seems like our money just flows back and forth between Congress and the bailed out companies!

Your Tax Dollars at Work

One of the concerns about the $750 Billion TARP program (to help stabilize banks) was the difficulty in making sure that the money was spent well. It looks like those concerns were justified:

In the first major disclosure of corruption in the $750-billion financial bailout program, federal investigators said Monday they have opened 20 criminal probes into possible securities fraud, tax violations, insider trading and other crimes.

The cases represent only the first wave of investigations, and the total fraud could ultimately reach into the tens of billions of dollars, according to Neil Barofsky, the special inspector general overseeing the bailout program.

The disclosures reinforce fears that the hastily designed and rapidly changing bailout program run by the Treasury Department and Federal Reserve is going to carry a heavy price of fraud against taxpayers -- even as questions grow about its ability to stabilize the nation's financial system.

The Problem With Congress

Here's another example of how our government works....Congressmen and Senators get contributions from lobbyists and individuals who head companies that the Congress regulates, and then they steer earmarks (your taxpayer dollars) toward these companies.

It's legal as long as no one overtly says "give me this campaign contribution and I'll give you some government money" or "if you won't give me a contribution you won't get any government money"....something which former Illinois Governor Rod Blagojevich forgot.

John Murtha (D-PA) heads the House Appropriations Defense sub-committee and has long been known as someone who uses earmarks to their fullest. According to CBS News, he is currently funneling $31 Million in earmarks to 10 recent donors to his campaign.

The FBI is investigating several lobbying firms that are linked to Murtha.

And CBS News also reports this gem:

The contractor was set to receive $1 million tax dollars. He said the military told him the money would come through a company called Commonwealth Research Institute, whose parent company, Concurrent Technologies, ranked among the largest earmark recipients. Both were set up with Murtha's help in his own hometown. The defense contractor said Commonwealth officials told him to get the money, he should "consider opening an office" in Johnstown, Murtha's hometown, and chided his company for not giving "enough campaign contributions to Murtha," and not making "a showing at Murtha's annual defense contractor fair."

The contractor told CBS News: "I wouldn't do it. We're just not going to play." He didn't get the funds.

Murtha also got $150 Million in federal funding to build an airport near his hometown (newly renamed the John Murtha Johnstown-Cambria County Airport). Only three commercial flights leave the airport on a given day (all headed to Dulles Airport in Washington D.C.), and many of them are half-full. They recently got $800,000 from the Stimulus Bill to repave a backup runway.

School Vouchers Work

The D.C. voucher program has recently been dismantled by the Obama Administration, despite data that shows it is more substantially more effective than the D.C. public schools.

What happened, according to a Department of Education study, is that after three years the voucher students scored 3.7 months higher on reading than students who remained in the D.C. schools. In addition, students who came into the D.C. voucher program when it first started had a 19 month advantage in reading after three years in private schools.

Of course, President Obama's children attend a private school in Washington, and Secretary of Education Duncan did not move his family to Washington partly because of the poor schools.

Over and over again those who are supported by teacher's unions refuse to support charter schools and voucher programs, even though the data shows that students who use vouchers show significant gains over those who do not use vouchers.

Chrysler and GM Given More Taxpayer $$ Today

Chrysler LLC will receive $500 Million more in taxpayer bailouts, and GM will receive $5 Billion more between now and the end of May.

This is in addition to the $17.4 Billion taxpayer bailout last December.

One Example

One of the issues we face in our country is that our politicians rely on contributions from those whom they regulate. This is not an isolated issue - it happens over and over again.

Here is one small example, regarding Chris Dodd - a Democrat from Connecticut who is Chairman of the Senate Banking Committee. He is also known for ranting about the AIG bonuses while trying to hide the fact that he put the amendment in the Stimulus bill that specifically allowed for them (see previous posts).

More than $100,000 of the $1 million Dodd raised in the first three months of this year came from political action committees for the financial, insurance and real estate industries, according to his latest fundraising report. Among his donors were PACs for the American Insurance Association, Mortgage Bankers Association, Vanguard, Oppenheimer Funds, Charles Schwab, Real Estate Roundtable and Ameriprise Financial.

Dodd raised $608,995 from individuals, among them top executives from companies such as Fidelity, Citigroup and Citizens Financial Group. His take from Connecticut residents was $4,250, an especially anemic display of political enthusiasm for the state's senior senator.

Saving Money?

Yesterday, President Obama asked his Cabinet to save $100 Million out of their budgets. While it's always good when the government cuts back expenditures, $100 Million is a tiny percentage of the $1 Trillion operating budget for the cabinets this year alone (it's about 1/10000 of a percent).

So let's not fool ourselves that government spending is being reined in. This year will be the biggest budget in our history, and this year's deficit will by over 4 times larger than last year's deficit.

Spending vs Spending Cuts - In Pictures

Granted, the Heritage Foundation is a conservative organization. However, they do a good job of reporting facts. The numbers are not made up. The picture and example in this post say it all. And just to reiterate. Any money that they do "cut" is not going back to the taxpayers. It is just "less overspending".

We Have More Czars Than Russia!!

The Obama Administration has appointed at least 18 "czars" of various things. We now have a Border Czar, Energy Czar, Urban Czar, Infotech Czar, Faith-Based Czar, Health Reform Czar, new TARP Czar, Stimulus Accountability Czar, Non-Proliferation Czar, Terrorism Czar, Regulatory Czar, Drug Czar, Economic Czar, Car Czar, Guantanamo Closure Czar, etc. etc.

There are reasons to be concerned about this, some of them outlined by Senator Byrd:

Sen. Robert Byrd (D-W.Va.), who for decades has battled White House power and championed congressional clout, is questioning President Obama's appointment of "czars" to oversee key policy areas, including energy and climate.

"The rapid and easy accumulation of power by White House staff can threaten the Constitutional system of checks and balances," Byrd wrote in a letter to Obama. "At the worst, White House staff have taken direction and control of programmatic areas that are the statutory responsibility of Senate-confirmed officials."

$184,000 in Debt Per Person!!

The National Debt is now over $11 Trillion dollars. This does not include unfunded obligations for Social Security and Medicare (all those FICA taxes you are paying have been spent on current budget programs).

The Peterson Foundation estimates that the national debt including these obligations is $56.4 Trillion as of September 30, 2008. That comes out to $483,000 per household or $184,000 for every man, woman and child in this country.

This isn't even counting the debt we are scheduled to pile up this year and next ($3 Trillion more).

Tea Party Protests

Yesterday over 250,000 people in over 800 locations across the country protested the high level of government spending and control in our lives.

Here is a brief sampling (I'm just listing a few headcounts - it would take too much time and space to list them all):

Chicago, IL 4,000 - 5,000
San Antonio, TX 10,000
St. Louis, MO 10,000
Columbus OH 3,500 - 5,000
Rancho Cucamonga, CA 2,000
Fort Worth, TX 4,000 - 5,000
Nashville, TN 10,000
Montpelier, VT 1,000
Denver, CO 5,000
Naples, FL 3,000
Lansing, MI 4,000
Gilbert, AZ 1,000
Colorado Springs, CO 2,500
Johnson County (KC area) 5,000
Liberty Memorial (KC) 5,000
Canton, OH 2,000

And on and on and on....if you want more information, go to taxdayteaparty.com or michellemalkin.com. What's really amazing is the number of small towns that had 200 or 300 or 500 people show up!!

Obama Makes $2.7 Million in 2008

The Obamas reported $2.7 Million in income last year, mostly from sales of his books. They paid $855,323 in federal taxes. They made $4.2 Million in 2007.

Tax Facts

The top 1% of earners (the richest of the rich) pay 40% of all U.S. income taxes.

The top 10% of earners pay 71% of all income taxes.

The bottom 50% of earners pay 3% of all income taxes.

Over 40% of Americans pay no income tax.

Of course we all pay sales tax, FICA taxes, state and local tax, property tax, gasoline tax, liquor tax, etc. etc. As local and state governments struggle to balance their budgets look for these to increase.

April 15th Tea Parties

We attended the Chicago Tea Party at noon today, which was one of hundreds (over 700 total) across the nation today.

There was a peaceful crowd of 4,000-5,000 and several nonpartisan speakers. There was a wide cross section of people there - old and young, blue collar and white collar.

People were very concerned with both the rate of spending our government has embarked on and the government intrusion and control that seems to expand daily.