$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.

More Tea Party Protests

This past weekend, several hundred people turned out in Pittsburgh and Lincoln Nebraska to protest government spending.

This Wednesday, April 15, is the day when protests are scheduled across the country. For information, go to www.taxdayteaparty.com.

Media elites from both the left wing and right wing continue to mock the Tea Parties....obviously they don't spend much time with "regular people" or they might have a better understanding of why people are concerned.

U.S. Deficit for FY 2009 Nears $1 Trillion Already

(Reminder: the U.S. Fiscal Year runs from October 1 through September 30th.)

The deficit for the first six months of the fiscal year which began on October 1 was 956.80 billion dollars, according to the Treasury's monthly statement of receipts and outlays...

...The CBO said its budget deficit estimate for fiscal 2009, which ends on September 30, would be four times the 2008 record shortfall and amount to 13.1 percent of the country's total economic output. (emphasis added)

Read the whole thing....

CBO is the Congressional Budget Office. The national debt is now over $11 Trillion and rising rapidly.

Stimulus Bill at Work?

We are now hearing that President Obama sees signs of optimism from the economy. Could it be a result of the actions of Congress and this Administration, in moving so quickly to pass a huge stimulus bill?

The answer is no....stimulus funds are just now starting to percolate down, with many not slated to be spent until 2010 (and 30% slated to be spent after 2010).

White House officials say the bulk of the money will start hitting the streets later this year and early next, with the goal of spending 70 percent of it by the summer of 2010.

Is it possible that we could be in relatively the same economic position without having spent 800 Billion dollars that we don't have? We will never know.

The good news: some of the delay in spending the funds is because state and local officials must show plans for how they will use the money before they can get it.

Bush Deficits vs. Projected Obama Deficits

This is why so many people are upset with what's happening in Washington. From the Washington Post:

U.S. Government Deficits

Data is from the Congressional Budget Office.

Are You Getting Good Information?

If you get most of your news from radio, TV or newspapers, you rely on them as "gatekeepers"...they decide what stories you hear and what stories you won't hear.

Interestingly, a liberal advocacy group called Families USA recently marketed stories on people who lack health insurance....and over 200 media headlines were the result. As a result, we hear over and over about uninsured people and the need for health care reform.

The other day I heard 6-7 headlines on the radio news about people who had been shot in various states...by piling them on one after another, it made it sound like a huge outbreak of violence in this country. I wondered if this was part of a push for greater gun control. In a nation of 300 million people, there are bound to be some problems. When you gather incidents across all states and report them one after another, the perception is that the problem is a big one.

Back to health care....while there are issues with our health care system, it is interesting to look at facts. For example, it is widely reported that 47 million (out of some 300+ million) Americans lack health insurance. According to the Census Bureau, of these 47 million:

• 9.5 million people are illegal aliens
• 8.3 million uninsured people are those who make between $50,000 and $74,999 per year and choose not to purchase insurance
• 8.7 million uninsured people are those who make over $75,000 a year and choose not to purchase insurance

So less than 7% of the population wants insurance and does not have it. The Congressional Budget Office estimates that 45% of those without insurance will have insurance within 4 months. Again, something that we may want to address, but hardly the widespread phenomenon that we are told about.

Just 53% Say Capitalism is Better Than Socialism

A recent Rasmussen phone survey showed 53% percent of Americans prefer capitalism over socialism, while 20% say socialism is better and 27% aren't sure.

Breaking it down by age group, the under-30 crowd prefers capitalism to socialism by only 37% to 33%, with 30% undecided. Thirty-somethings prefer capitalism over socialism by 49% to 26%, and of adults over 40, only 13% believe that socialism is better.

There is a partisan gap as well. Republicans - by an 11-to-1 margin - favor capitalism. Democrats are much more closely divided: Just 39% say capitalism is better while 30% prefer socialism. As for those not affiliated with either major political party, 48% say capitalism is best, and 21% opt for socialism.

Understanding the Financial Crisis

This is a short but good video by Reason TV regarding our strategy for solving the current financial issues.

Pirates!!

Pirates have been seizing ships off the coast of Somalia. The latest ship seized is a U.S. flagged, Danish owned ship that was taking food aid for Somalia and Uganda. 20 American citizens were crewing the ship. There are reports that the crew has re-taken the ship, but they are unconfirmed. A U.S. Navy vessel is on its way to the area.

Last weekend pirates hijacked three vessels, along with another hijacking on Monday. In 2008 there was an outbreak of piracy, which subsided after various countries sent naval ships to the area.

Mexican Trade Tariffs Continue - CEO's tell Government 26,000 Jobs at Risk

As you may recall, back in March Congress passed the Omnibus Budget Bill for 2009. This included an item that eliminated a pilot NAFTA program (prior post).

Over 150 companies which include GE, Walmart and the American Farm Bureau issued a joint letter today urging Washington to quickly end this dispute. They state that it is putting about 26,000 jobs at risk.

Here's another post which is more specific to the Northwest and the impact on it's agricultural exports.

More Tea Party Protests

This weekend there were taxpayer protests in Santa Barbara (500+ people), Charlotte (200 people), Montana (500-1000 people), and Long Island (300 people).

Protests are planned in cities around the country on April 15th. For more information, go to taxdayteaparty.com. This is a purely grassroots effort, with volunteers in many states.

North Korea

This weekend, North Korea launched a long-range rocket, which is commonly believed to be a step toward their ability to launch nuclear warheads.

Also this weekend, President Obama called for the U.S. to lead the way to a world without nuclear weapons.

Obama proposed doing so by reducing America’s arsenal, if not altogether eliminating it; hosting a summit on nuclear security; seeking ratification of the Comprehensive Test Ban Treaty; strengthening the Nuclear Non-Proliferation Treaty; and pursuing a new agreement aimed at stopping the production of fissile materials.

It doesn't seem like a very good time to be talking about reducing our arsenal!

Banks try to repay money

A few banks are repaying the TARP funds that they received last fall from the government. Others are starting the repayment process. According to this, some are being refused....keep in mind that this is one source, but read the whole thing. Very interesting....

Why would the government refuse to be paid back by banks?

Here's a true story first reported by my Fox News colleague Andrew Napolitano (with the names and some details obscured to prevent retaliation). Under the Bush team a prominent and profitable bank, under threat of a damaging public audit, was forced to accept less than $1 billion of TARP money. The government insisted on buying a new class of preferred stock which gave it a tiny, minority position. The money flowed to the bank. Arguably, back then, the Bush administration was acting for purely economic reasons. It wanted to recapitalize the banks to halt a financial panic.

Fast forward to today, and that same bank is begging to give the money back. The chairman offers to write a check, now, with interest. He's been sitting on the cash for months and has felt the dead hand of government threatening to run his business and dictate pay scales. He sees the writing on the wall and he wants out. But the Obama team says no, since unlike the smaller banks that gave their TARP money back, this bank is far more prominent. The bank has also been threatened with "adverse" consequences if its chairman persists. That's politics talking, not economics.

Emphasis added.

Do You Like Your Light Bulbs?

By January 2014, incandescent light bulbs that are 40 Watts or greater will be banned in the United States. This was part of the federal Clean Energy Act of 2007 was signed into law on December 19, 2007.

This will mean that you will only be able to buy compact fluorescent light bulbs from that point onward.

I have tried these light bulbs, and they are very dim, don't last very long (forget the 10,000 hours promised on the package), and require special disposal (they contain mercury, so if people throw them in the garbage instead of taking them to special disposal locations, our landfills will be full of mercury). Also, if you have dimmer switches, they will no longer dim (fluorescent bulbs only go on and off).