Obama Might Need These to 'Kick' Congress in the Ass...
The US Senate is often referred to as 'The Place Where Good Legislation Goes to Die'. That's because they like to tinker with the bills that the House of Representatives sends them. Sometimes they do mess things up, but soemtimes they are the body that brings at least a modicum of restraint to Washington DC. That was evident this week, with the economic stimulus bill.
We've been saying it for a while here, and most voters agree, that the stimulus bill, while it has many decent and potenially effective qualities, has some things on it that needed to be cut - and the Senate is doing it. While chopping off $130 billion seems like a daunting task, the facts are that these are not cuts, they are lower spending increases, so if you hear someone anywhere whine about taking food out of someone's mouth, don't believe it. It is only giving less of an increase. But, overall, it has been interesting watching this all happen, and we have a couple observations.
Barack Obama Messed Up
Yep, the man is human. Even I mess up sometime. Here is where he f'd up... First, the extra week the Senate has taken is not ruining America. I think the light speed with which DC blew the first $700 billion in TARP money without pinpointing HOW Wall Street should spend the money showed that time sved turns into money wasted. Hey, I like that... I sound like Ben Franklin.
Secondly, he adopted the Dems crappy rationalization this week that because he and the Dems were elected, that they gave them the green light to go ape shit and start spending in dollar amounts that start with 'T'... No matter whether you win by 12 or 200 electoral votes, America never has a mandate in it's elections, and they expect some sensibility. 'America voted me in, and this is what they want' doesn't cut it. They didn't expect this kind of spending. Obama has done a good job of trying for bi-partisan support, and he will get his bill passed. Patience, Barry...
Who Loses?
Well, the obvious loser in the long term are the voters, or more likely, their kids and grandkids, for they will have to pay this back eventually, but that's a no-brainer. The big losers in the short term are the states - and they should be. Like South Carolina, the state budgets have skyrocketed in the last few years. Double digit budget increases for 4 or 5 years in a row are a recipe for disaster, and it finally came. How the hell can California have a $44 BILLION dollar deficit? I'm afraid to even look at the bullshit in that state's budget.
Spending Vs. Tax Cuts
Here is the big debate. Which works better? Well, it depends on what you're shooting for. The Republicans want to cut taxes, the Democrats want to spend money. While I am not a big fan of Keynesian Economics, which is all they teach you in college by the way, a targeted project that puts people to work immediately works faster than an incremental tax cut. But.....
Here are the facts. Most of these changes will take a long time to have ay effect at all, and the economy likely will recover on it's own by the time it hits. Some of you seem to have trouble grasping the tax cut theory, so here it is - in simple microeconomic terms that should make sense....
Most of us Americans live paycheck to paycheck, and that is our fault. When we lose a job, for every month that we are out of work, it takes 3-4 months to make up for that loss. My personal example? It took me 18 months to get back to where I was for a 4 month stretch with no income. But, the key engine in America's economy is still and will always be the American consumer. That is why the mortgage crisis was the true cause of this recession. An extra $200-400 month on a crappy mortgage ruins households. They can be repaired, and most of them are, but it takes time. Try as we might, there will NEVER be a quick repair to an economic downturn. We are an impatient, fix-it-now nation, and DC's attempt to fix anything within a month or two will not work. It takes time....
For real, long-term economic sustainable growth, Americans need to have money to spend in their bank accounts. To do that, they need to have less taxes taken out, and to be able to obtain a REASONABLE amount of credit to buy a home and one credit card without getting fucked in the ass financially. Financial recovery is a slow, tedious, painstaking process, but eventually, it happens. Americans budgets have had a big whammy hit on them this year, but cutting taxes eventually does work it's way towards a good economy.
Like most issues, both the Democrats and Republicans have good points, and Congress does need to take it's time to put together a solid plan to fix America, but no matter what, don't expect any miracles in 2009. It takes time.. Patience, America.....
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