Another Job Growth Plan = Selective Subsidization

September 4, 2010

If the history of political meddling in the economy teaches us anything, it is that people seldom come to a realization of basic economic realities. That’s why President Obama can come up with yet another plan to ‘stimulate’ our economy like this:

That’s why we need to take further steps to create jobs and keep the economy growing, including extending tax cuts for the middle class and investing in the areas of our economy where the potential for job growth is greatest.

The simple fact lost on many is that all of this involves taking money we don’t have (which will mean increased debt and/or future devaluing of our currency) and spending it in ways that politicians deem appropriate. What it really, in effect, represents is government taking our money from us and deciding how to spend it for us.

[picapp align=”left” wrap=”true” link=”term=obama+economy&iid=9647673″ src=”″ width=”234″ height=”167″ /]”Extending tax cuts for the middle class” implies that only that segment of income earners defined as “middle class” by politicians and deemed worthy of tax breaks will benefit from such a measure. The “investing” (which is government code for “spending”) in areas of the economy “where the potential for job growth is greatest” means government deciding what industries and individuals should be subsidized.

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Tampa’s Unspent Stimulus Money

July 19, 2010

Tampa has a problem. According to a recent St. Petersburg Times report, it still has to spend nearly half of $13.6 million in federal stimulus funds it received 18 months ago. The deadline is in two months. If the money isn’t spent, it will go back to the federal Department of Housing and Urban Development.

The plan was to use part of the money to buy up foreclosed homes and sell them to preferred buyers (low-income and first-time). Renovating rental units was also on the list.

The argument is, naturally, that such activity will ‘stimulate’ the economy. The Times report paraphrased the head of a non-profit who would benefit from the funds:

[Sara Romeo] says the project will create 237 construction jobs, two permanent full-time jobs, and take advantage of the latest green building techniques to save residents energy and transportation costs.

The obvious questions rarely asked in these type of well-intentioned government spending plans are where did the money come from and what would it have been spent on without government direction? Given that the federal government is in debt, that means the money adds to our debt. The only way to pay for it is to borrow or print more money.

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More Spending on Government Employment

June 16, 2010

Spending is something politicians in Washington rarely grow tired of, despite any amount of soaring debt. Perhaps that explains President Obama’s recent push in a letter to congressional leaders to appropriate more money (the government doesn’t have) to go toward preventing supposed “massive layoffs of teachers, police and firefighters.”

The president’s use of the word “emergency” to characterize the need for these “additional measures to spur job creation” is the typical rallying cry of all government intervention. That job creation, however appears to be mostly in government — much to the detriment of the majority of taxpayers working in the private sector.

[picapp align=”left” wrap=”true” link=”term=obama+economy&iid=9030727″ src=”″ width=”234″ height=”149″ /]Though Obama urged the expansion of small-business loans and tax credits, he was also concerned about the effect of the economic downturn on state and local government employment. He even used as part of his argument for increased funding to public employment the costs that would be needed to help those axed government employees look for work, seemingly justifying a larger expense (the cost of full employment) by warning of a lesser expense (the cost of helping those former government employees find future employment).

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Your Tax Dollars: Gone With the Wind?

April 9, 2010

The U.S. wind industry is doing so well — reportedly growing at a record pace in 2009 — an industry association is predicting even more growth … that is if the government steps in. According to a recent MarketWatch report, the American Wind Energy Association (AWEA) has stated that, “Comprehensive federal policy needs to be put into place in order for the industry to continue growing.”

This begs the question: Why would a supposedly booming industry need government to step in to aid its growth? The answer: The industry can’t actually rely on consumer demand and private investors to support its product.

A leader in the AWEA was quoted in the article seemingly complaining that, “We are the only major developed country that does not have a renewable energy standard or a functional standard.” Translation: We are the only major developed country that does not yet heavily subsidize “renewable energy” — although, that is arguable given the subsidies included in last year’s stimulus.

Listed among the AWEA’s legislative goals (read: list of political favors) are the following: Read the rest of this entry »

Stimulating Government

February 23, 2010

A recent story from the St. Petersburg Times attempts to highlight the impact of last year’s stimulus bill on local jobs. It touts as examples of the supposed benefit to jobs all of the following:

  • renovations to a public housing complex
  • more work for companies to construct “affordable” (read: government-subsidized) housing
  • funds to help “teachers keep their jobs”
  • funding of research at the University of South Florida
  • employment at Tampa International Airport and the Tampa Port Authority
  • “kept police officers and firefighters working”

Notice the trend: All of these examples are either government jobs or government projects. The major benefactor: local governments and their employees.

Also, keep in mind that the “funds” used to pay for this “stimulus” represent money no longer available to individuals in the private sector to spend and invest as they see fit. Perhaps the “American Recovery and Reinvestment Act” should have instead been named the “Increase in Government Employment and Debt Act.”

One Year of ‘Recovery’

February 17, 2010

To mark the one-year anniversary of the American Recovery and Reinvestment Act, here are some of my previous posts on the less-than stellar results of the “stimulus”:

Also of note is this recent CBS News/New York Times poll showing that only 6 percent of people think the stimulus package has actually created jobs. So much for bringing “hope” to the people.

Obama’s ‘Jobs Bill’: Government Redirecting the Economy

January 28, 2010

President Obama put forth certain steps to include in a “jobs bill” (read: another stimulus bill) last night in his first State of the Union Address. These steps included the following:

  • $30 billion to community banks to loan to small businesses
  • tax credit to small businesses “who hire new workers or raise wages”
  • tax incentives for businesses to ‘invest in new plants and equipment”
  • additional infrastructure spending (e.g.; high-speed rail in places like Florida)
  • tax rebates to “Americans who make their homes more energy efficient, which supports clean-energy jobs”
  • tax breaks to companies that create jobs in the U.S.

At first glance, to many these steps may seem laudable. Lost, however, is the realization that all of these steps involve government direction of the economy. Money to community banks and infrastructure takes money away from individuals (either through taxes, borrowing or inflationary money printing) and redirects it to what government deems worthy, and tax credits and incentives subsidize those activities government prefers.

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A Year of Bailouts

October 3, 2009

A year ago is when the whole flawed — and unconstitutional — government bailout frenzy began under the Bush administration with the Troubled Asset Relief Program (TARP). This pie chart shows where the money has gone so far:

After TARP came the auto bailouts, the “stimulus” package, Cash for Clunkers and many more dubious and economically flawed government programs to help “rescue” our economy — all under Obama. But this graph tells a lot about whether these programs helped save the economy:


The actual unemployment rate has risen well beyond the White House projections for both with and without the recovery plan. Thanks for all your help Washington!

You would think reason would tell politicians to leave things alone from now on. But to ask a politician to listen to reason is typically a complete waste of time — almost as much a waste of time as these bailouts were.

Stimulus Waste

March 22, 2009

Here is the text of an email I wrote in the middle of the stimulus bill vote:

With a quick search of the roughly $790 billion stimulus bill just passed by the House and soon to be passed by the Senate (that, by the way, was just posted for actual public view less than 24 hours ago), I was able to find the following non-stimulus-related items (below) that we will spend money we don’t have on. And this is all just from the first half of the over 1000 page bill.

– $146,000,000 for national park maintenance and repair
– $15,000,000 for historic preservation at historically black colleges
– $140,000,000 for the U.S. Geological Survey
– $600,000,000 for the Hazardous Substance Superfund
– $25,000,000 for repairs to the Smithsonian
– $50,000,000 in grants to fund “arts projects and activities which preserve jobs in the non-profit arts sector threatened by declines in philan-thropic and other support during the current economic downturn”
– $1,000,000,000 to “construct, renovate or repair existing non-Federal research facilities” (medical research facilities)
– $3,000,000,000 for school improvement grants
– $1,300,000,000 for Amtrak
– $225,000,000 in grants “to combat violence against women”
– $1,000,000,000 to the Transportation and Security Administration “for procurement and installation of checked baggage explosives detection systems and check-point explosives detection equipment”
– $1,000,000,000 for Head Start
– An additional $90,000,000 for educating the public about the transition to digital television
– $1,000,000,000 for NASA

Keep in mind that this is supposed to be an economic stimulus bill that proponents argue will save our faltering economy. Yet most members of Congress have probably not even read the entire bill. It has been rushed through using the politically tried-and-true method of scaring people — scaring them into believing that something must be done to avoid utter economic doom. While some of the above spending items may have merit in separate bills, they have nothing to do with stimulating the economy. This is not to mention the fact the Constitution does not allow for most of these expenditures on the part of the Congress.

This is around $790 billion dollars. That is roughly $2600 for every man, woman and child in the United States. The only way for government to come up with this money is to either borrow it or print it. Borrowing it further increases our government’s debt (owned by other countries, especially China). Printing it leads to inflation, which makes everyone’s dollar worth less. Of borrowing, Thomas Jefferson said, “The principle of spending money to be paid by posterity, under the name of funding, is but a swindling futurity on a large scale.” And economist Milton Friedman said, “Inflation is one form of taxation that can be imposed without legislation.”

There is no free lunch — someone always pays when Congress doles out money.