2010 Budget Cuts Proposed???

Has a new found sense of fiscal responsibility and frugality overcome the White House?  This Week, President Obama announced cuts to his record setting budget.

In making the announcement,the President said:

We can no longer afford to spend as if deficits don't matter and waste is not our problem," Obama told reporters. "We can no longer afford to leave the hard choices for the next budget, the next administration or the next generation.

In making the announcement, the President proposed ridding the budget of $17 Billion Dollars.   

$17 Billion.  Of Course, the 2010 Budget proposal is already $3.5 Trillion Dollars - which is down from the record setting $3.9 Trillion Dollar FY 2009 Budget.  (See, Holy Cow! $3.9 Trillion Dollar Budget.)   The promise to save $17 billion dollars has nothing to do with cutting waste.  Take a look at how much $17 Billion is in comparison to the budget (chart from Econopic):

Get out your microsope to see that tiny blue line at the bottom of the graph.  That is the hard choices we are making.   Keep in mind that the fiscal 2009 (originally proposed Bush) was $3.1 Trillion, and then increased to $3.9 Trillion by Obama.  The 2010 budget is still $300 Billion greater than the original 2009 budget.  

How's that for fiscal responsibility?

$4 Trillion and Nothing to Show for It.

Congress, without debate or investigation of any sort, blindly approved bailout after bailout.  $4 Trillion dollars of your hard earned dollars have gone to the financial rescue of banksters.  Now, after committing to spend all that money, your non-representative representatives heard a report from an oversight panel that told Congress the bailout plan was ill conceived and isn't working. 

The Congressional Oversight Panel, approved after Congress voted without little debate on allowing Treasury to have $700 billion of TARP fund.  The panel is chaired by Elizabeth Warren, a Harvard Law School professor.  The findings (Executive Summary found here) point out that there are three general approaches to crises: 1) liquidation of troubled institutions (as was done in the 1980's S&L crisis); 2) reorganization of the institutions using conservatorships (as was done with Continental Illinois and Sweden in the 1990's); or 3) Subsidization (as was done with Japan during its lost decade).  The report noted that the total spent on subsidization to date exceeds $4 Trillion Dollars.

The liquidation option, while the best choice is politically difficult, but provides certainty to the markets, prevents unending subsidies, and results in a quicker resolution to the crisis.  Our elected officials chose not to liquidate the insolvent banks.  It worked during the S&L crisis.  Reorganization involves replacing management and selling off bad assets, but it taxes government resources and results in politicization of the business.  Our non-representative representatives chose not to reorganize and replace management.  It sort of worked with Continental Illinois.  Subsidization involves endless commitment of taxpayer resources, hides true value and delays economic recovery.  It didn't work with Japan, but this is how our government chose to spend our money - without debate or fact finding.  

We know the path our elected officials chose - a path doomed to failure from the beginning.  The only way subsidization could work is if the crisis was short and shallow.  In other words, if the crisis was limited to just a temporary dip in housing prices that caused a short term liquidity issue, subsidization might have worked.  We all know from history that real estate crises are never short term.  Despite receiving calls and letter at the rate of 300 against the bailout to every one in favor, and despite having a cadre of economists telling Congress that the bailout was a bad idea, Congress went ahead with its plan.  Now we know it won't work. 

What are you going to do about it?  It is never to late to exercise your constitutional right to let your elected officials know how you feel.  Send the tea bags.  Write the letters.  Go onto the websites and send email messages.  There are plenty of ways to express yourself.  Remember - if you don't tell your representative, who will?

Below is a video introduction to the oversight panel's report.  Enjoy,

SOTUS

Time to Send Tea In Protest!

April 15, tax day, is but a week away.  Now is the time for everyone to join in peaceful protest to show your elected officials how you feel about government spending and flawed policies that increase the tax burden on Americans and reduce the purchasing power of our hard earned dollars. There are two things you can do to protest:

1) Send one (1) tea bag to each of your elected representatives in Congress.  You can find your representative's addresses in the house and senate web sites (www.house.gov and www.senate.gov); and

2)   Attend one of the peaceful Tax Day Tea Party protest rallies occurring across the country.  Several web sites have popped up to promote these non-violent protests.  A couple are Tea Party Revolution and Tax Day Tea Party.

You can do something to save our country.  Act now.

Sotus

More on Bank Bailouts at Taxpayer Expense

Over the past several weeks many commentators and blogists have discussed how the Treasury's plan is nothing more than additional taxpayer bailouts of big banks. The public private partnership proposed by the Government is complex, but if you want to understand the fraud involved in the plan, watch the 12 minute video from Financial Ninja, below. It is explained clearly. More government efforts to bail out banks at taxpayer expense. More business losses shoveled on us.

Remember to send your tea bags to your elected officials.

Sotus

(Steve of the United States)

More Government Waste with No Bid Contracts

Earlier this month, President Obama brought John McCain to the White House to announce a restructuring of the way the US government procures goods and services.   In particular, the Obama administration claimed to limit the practice of using no-bid contracts.  No bid contracts are uncompetitive and result in higher payments for fungible goods and services.  

Within a few days after the words of eliminating no bid contracts left the President’s mouth, his Treasury Secretary, Tim Geithner, sought to procure for the US Treasury a supply of notebook computers.  Here is the announcement.    The procurement goes through great detail specifying the performance of the computers, what types of drives and memory, the operating system, etc.  It goes on to specify that in fact what the Treasury needs is Dell computers.  Yup, this  "competitive bid", can be filled only by a single source - Dell Computer!  Still, it is put out to bid.  I wonder how many competitive bids the Treasury will get from say HP, IBM, Acer, Gateway or other computer manufacturers?  This is simply more evidence that when Obama speaks he means the opposite of what most people understand his words to mean.  

AIG BLACK HOLE - US CONTINUES TO POUR MONEY INTO SAVING THE INSURER

AIG the insurance giant "partially" taken over by the US Government (under the Bush administration) is getting another $30 billion of your tax dollars.  The Federal Reserve announced this morning that the terms of the bailout have been adjusted.

The company continues to face significant challenges, driven by the rapid deterioration in certain financial markets in the last two months of the year and continued turbulence in the markets generally. The additional resources will help stabilize the company, and in doing so help to stabilize the financial system. 

The New York Times stated that AIG plans to announce a $62 Billion loss last quarter.  Continuing to use taxpayer dollars to bailout AIG is simply throwing good money after bad.  AIG got into this mess because of its unfunded credit default swaps backed by no reserves.  The unregulated CDS market was (and still is) nothing more than a casino style sports book where the events being bet upon were the health and stability of the banking world.  Casinos stay in business because they balance their books with offsetting bets and make money on the vig.  A well run CDS game should have been done the same way.  Unfortuantely, AIG did not have a balanced book, thus with every bank failure and with every corporate failure that it bet against, AIG will have to shell out more and more money to pay off its losing bets.  The notional value of AIG's book is $300 Billion.  The losses could actually be much higher.

Ultimately, AIG will fail - there is no way we can continue to sustain these losses on taxpayer dollars.  While the government is trying to buy time in the hopes that the economy will turn around in time to minimize AIG's losses, our taxpayer dollars are being used to payoff bets AIG made on the health of the financial system.  The wisdom of the continued bailout is being questioned.  Peter Morici told Reuters that "[t]here's no amount of money that you can give (AIG), there are $2 trillion in losses out there."  Karl Denninger, who recently won an award for truth in journalism, even questioned the lawfulness of the Fed's investment.  His analysis is on target.  The gist of the argument is that the Fed is not empowered to make investments, but only to lend money on the best collateral.  What the Fed did with AIG is make an investment first into preferred stock and then converted that into common stock with additional cash.  The Fed isn't making a loan at all, but is shelling out taxpayer money to support an institution that is bound to fail.

The Bush administration made the argument that a takeover of AIG was necessary to prevent a siezure in the insurance industry - so that businesses on Main Street could maintain insurance.  Of course, that was pure rubbish, as all traditional lines of insurance are regulated by the states and require reserves to fund probable liabilities.  The CDS market was not regulated, required no reserves, and is irrelevant to Main Street businesses.  It was a corporate bet that made money for AIG's executives for years, and it is now loosing money for the taxpayer.  This silliness needs to stop.  The only reason to take over AIG in the first place is to assist an orderly liquidation so as not to shock the market.  I accept that as a legitimate function of government.  

Using taxpayer funds to prop up institutions is not a legitimate function of government, and will lead to disasterous consequences down the road.   We rightfully expect our government to be fair and impartial in its dealings with its citizens (including corporate citizens), and we have a right to expect prudence with our money.  The governement cannot bail out all entities.  By picking and choosing which ones to save and which ones it should let perish, the administration is playing favorites.  Playing favorites undermines confidence in government.  Just as Bush and his cronies were roundly unpopular because they blatantly used government power to favor a few at the expense of others, President Obama is heading down that same path.  It makes no difference that the Democratic favorites are different than the Republican favorites.  It is still choosing winners and losers and it is not being neutral.  Faith in government will continue to erode until the nonsense stops.  AIG will fail eventually despite the governments best efforts.  The question is, will the United States go down with AIG?

Washington Post Budget Graphic

The Washington Post has a great graphic on the budget and where this deficit stands in relation to historic deficits.  Not since World War II have we had deficits this large.  The graphic is:

TAXATION YOU CAN BELIEVE IN

Last night I provided a few comments on Obama's massive budget increase.  More and more details are coming to light.  One of the ways Obama plans to pay for the increase is by increasing taxes and eliminating deductions.  One of the increases proposes to eliminate the mortgage deduction.  Another eliminates charitable contribution deductions.  

Remember the campaign promise not to raise taxes on those making less than $250,000 per year?  Well, this budget breaks that promise by reducing the amount of a mortgage deduction if you make over $208,000 per year.  Now that's change lies you can believe in!

Taxes not only raise revenue for the government, but can support governement policies and provide incentives for spending in certain areas.  Typically in stressed economic times tax policy encourages businesses to spend by providing credits or accelerated depreciation, etc.  In times of deep economic stress, we rely upon charitable institutions - including colleges and universities, aid and alms organizations, health care clinics, and so forth - to fill a need that the government can't.  These institutions rely upon charitable giving.  We already are among one of the lowest societies in per capita in alms giving.  Eliminating the tax deduction for charities at a time when unemployment is skyrocketing and these organizations are most needed is unconscionable.

The Wall Street Journal has an insteresting summary of these tax increases here.  

HOLY COW! $3.9 TRILLION DOLLAR BUDGET

Just two (2) days after telling the nation about fiscal responsibility President Obama sends Congress a Three Trillion Nine Hundred Billion Dollar Budget (that is $3,900,000,000,000.00) for 2009 and a $3.5 Trillion dollar budget for 2010.  The last president approved a record deficit of $455 Billion Dollars based on a $3.1 Trillion dollar budget for 2009.  Obama’s updated budget for 2009 proposes a deficit of $1.750 Trillion and for 2010 $1.170 Trillion!  I was really hoping Obama was going to be different. 

I understand the shift in budget priorities – after all, that is the fundamental difference between the two major political parties.  As the prevailing party controlling both the White House and both houses of Congress, it is reasonable for democratic budget priorities to predominate the proposal.  And it does so dramatically.  This budget, however, completely blows the imagination not only in terms of scope but in terms of the huge increase over prior years.  Not only has spending dramatically increased, but governmental revenues (mainly from income tax) are down.  Obama promised change in the way we do things in Washington.  Tax and spend is not change. 

My fear is that the ordinary citizen, having been squeezed over the past decade by relatively flat growth in basic business and jobs (excluding the financial engineering of Wall Street), will begin to rebel.  Increasing the Government’s share of personal productivity is never good.  Minor fluctuations in the imposts of government on private earnings are tolerable – everything in moderation.  While taxes are never liked, most recognize taxes as the price we pay for a free society.  What is fundamentally different in this case is the penal like shift in burdening the taxpayers and small business owners with government contributions, without a corresponding benefit.  The increase and burden is immoderate and unfair.  Representatives and Senators hole up in Washington unresponsive to the people that elected them and view the taxpayers as a perpetual piggy bank that can be robbed time and time again. 

That is only on the Federal side.  Taxpayers across the Country are also being increasingly burdened by their state governments.  Increasing taxes at a time of economic uncertainty is counter intuitive.  We need to create policies that encourage investment in new industries.  We need policies to get risk capital into the hands of fledgling businesses.  We need policies that open the door for small businesses to hire new employees.

 How much productivity and growth can we expect if the Governments confiscate nearly 70% of our earnings?  Where is the money for new jobs?  After the government fills the pot holes and builds the bridges to nowhere, what have we left?  Have we created a sustainable economy?  When we increase handouts (entitlements – whatever you want to call them) what do we create?  We are planting the seeds of rebellion with these policies, and if we don’t watch out, we may destroy the very society we are trying to save.

Obama Delivers Message of Hope

His oratory is phenomenal.  The President's speech, about an hour long, highlighted not only what needs to be done immediately to keep credit flowing and assist the ailing auto industry, but also showcased his budget priorities.  Those priorities are renewable energy, health care reform, and education.  At the same time he told Congress to reduce the deficit.  Obama talked about elimination of waste in government and reform of antiquated programs.  Follow this link for the full text of President Obama's address.  The showcase line delivered by the President was:

"But while our economy may be weakened and our confidence shaken; though we are living through difficult and uncertain times, tonight I want every American to know this: We will rebuild, we will recover, and the United States of America will emerge stronger than before."

The budget and priorities will be debated, and hopefully legislation will be enacted quickly to advance renewable energy, reform health care delivery and improve education.  With that said, however, there is still serious disagreement as to the short term tactics to handle the economic crisis.  The issue is not the flow of credit to individuals and small businesses, but whether we have the capacity to borrow more without repaying the debts we previously incurred.  When people have gorged themselves on all forms of credit available at the buffet they stop eating until they digest their food.  Restaurants do not force them to eat more than they need or before they are ready.  No matter what we do with the banking system, responsible borrowers need to clean up their balance sheet before we begin borrowing anew.  Responsible lenders will not extend credit when the risk of default is great.  Returning to the practices that got us into the problem is not the solution.  Create a new banking system that can lend to borrowers without regard to bad loans on its books.  Stop the bleeding of the insolvent banks.  That will get us out of this situation, 

 

The President's otherwise wonderful speech was unfortunately marred by a few partisan snipes aimed at the Bush administration that he could not resist delivering. While most of his comments were met with bipartisan standing ovations, only the Democrats stood and applauded his partisanship.  In addition he gave credit to America for inventing the automobile.  Hopefully our German friends wont take much umbridge at the sleight to Daimler, Maybach and Benz.  Nevertheless, his comments were well received and hopefully will set the tone for some real budget cutting and reform.

Obama To Give Message of Hope

President Obama is expected to deliver a sorely needed message of hope to this Country in a short while.  After the President outlines the recent culture of placing short term gains ahead of long term prosperity, he will take the opportunity to pave a new beginning of responsibility.  He is expected to tell America that:

"Now is the time to act boldly and wisely – to not only revive this economy, but to build a new foundation for lasting prosperity. Now is the time to jump start job creation, re-start lending, and invest in areas like energy, health care, and education that will grow our economy, even as we make hard choices to bring our deficit down."   

We know President Obama will use all of his fabled oratory skills to convince America that it is time to start focusing on the long term, but his challenge (and our challenge) will be to convince 435 members of the House of Representatives and 100 Senators to break their culture of bickering, infighting, partisanship and pork barrel politics.  It is hard to imagine how the existing crew, with about 470 running for election every 2 years, would be willing to put the Nation's long term interests above the perceived need to get something accomplished in the short term at the expense of another party in order to get re-elected.  Let's hope Mr. Obama can deliver this type of change.

More Bailouts Are Just Wasteful

Every day we hear more and more news about companies coming back to the government for more bailout funds.  Banks, insurance companies, auto makers have all received massive amounts of our tax dollars and are now coming back for more.  The New York Times is reporting that the U.S. is Pressed to Add Billions to the Bailout .  The real question is whether any of this will help.  

The fundamental problem with the economy is that the consumer, the main engine of the economy, is tapped out.  Collectively, we are trying to get our own balance sheets in order.  Instead of buying new big screen televisions and automobiles, we are trying to pay down the debt we accumulated.  Hopefully, we are starting to live within our means.  But, that also means we need to adjust the way we do business.  The demand for goods and services will not return to the way they were anytime soon.  Take a look at this chart from Contrary Investor:

What this chart shows is that households are borrowing less and less.  It is a sign that we are starting to unwind the debt we have accumulated.  While no one can predict where this chart may lead, it is very likely in the coming months, if not years, that this chart will actually be negative - that is, that households will be reducing more debt than we collectively borrow.  

What does that say for the future of the financial industry that relies upon the collection of interest?  It means revenues are permanently down.  A smaller pool of resources.  What does it say about product companies like the automotive industry?  It means demand will be reduced.  In the end, it will be a good thing if we all live within our means.  In the short run, it means that industries will need to readjust what they are doing to meet the lower levels of demand.  

With the spectre of lower demand, how does it make any sense to continuing to finance the banks, insurance companies and auto industry when they can't make a profit?  It doesn't.  It is one thing if we are adding funds to preside over an orderly liquidation and restructuring, but it is quite another to keep funding these industries without any plan or goal in mind.

Fiscal Responsibility Summit Held to Pull Wool Over Nations Eyes

Obama held is Fiscal Responsibility Summit today.     We truly applaud his efforts to reign in deficit spending, but doubt he is serious about fiscal restraint.  George W. Bush's record deficit reached $455 Billion.  Obama just went on a huge bailout spending spree increasing deficit spending into the trillions of dollars.  The highlight of Barak Obama's 10 year plan is to cut the deficit spending in half by 2013 when he leaves office.  Cutting in half to our President means reducing the deficit to only $533 Billion Dollars by the time he leaves office  - some $78 Billion Dollars more than Bush's record deficit!  In other words, Obama plans to spend like hell over the next 4 years and claim fiscal victory when his final year spending is less than what he builds it up to be.  Tell me again how that is fiscal responsibility?

The words out of Obama's mouth resonate with fiscal conservatives - pointing out the deceptive games Congress plays with budgeting, the effect of the huge accumulation of national debt, the cost of paying interest thereon (especially in light of the cost of other government spending programs).  We still believe Obama is only paying lip service to fiscal restraint.  Any plan that increases spending beyond our means - and that means receipts - is by definition irresponsible.  It increases the national debt without a plan to retire the debt.  

Yes, truth in budgeting and across the board spending cuts are necessary, but dont tell me you are serious about reducing the deficit when your plan calls for a substantial increase over the prior year.  Please talk to us straight about your plans and don't claim your plan is to reduce spending when you plan an absolute increase over your predecessor.  Stop spending, reduce the government size, reduce the waste, get rid of the antiquated programs and subsidies that no longer have relevance to society, reform the entitlements, and come up with a viable plan to reduce the debt.  That would be change we could believe.

CItigroup Is Near Nationalization - Updated

There is much attention this morning to reports that the US may not only convert its $45 Billion Dollar bailout of Citigroup into common stock, but that our tax dollars may go to buy up to a 40% stake in the insolvent bank.  Mike Shedlock has done an excellent analysis of the report, and Barry Ritholtz has also noted that we are proposing to throw good money after bad.  Best of all is Karl Denninger's analysisposted on his blog.  Henry Blodgett had joined the debate as well pointing out that at current valuation converting the taxpayer's $45 Billion preferred into common would result in an 80% stake not a 40% stake as the insolvent bastards propose.

Taking another stake in the bank is a bad idea.  Throwing more money at the bank will not work.  How much more will the government commit waste of our tax dollars?  More than the whole is worth?  If you or I had an old family car in need of repair, we would look at the cost of repair in relation to its market value.  No prudent man would pay more for repair than the item is worth.  No government should spend more to fix a problem than the problem is worth.  Citigroup's current market value - the sum of the outstanding shares of the enterprise is approximately $12 Billion.  Does adding $40 Billion to the enterprise make sense?  More than 3.5 times its cost?  For an insolvent company that is ready to be taken over by the FDIC?  Where is the prudence?  See for yourself.  Here is Citigroup's chart:

Either liquidate Citigroup because it is insolvent, or nationalize it to preside over an orderly liquidation.  Just don't waste more money trying to save an insolvent bank.  We roundly criticized Japan for maintaining zombie banks during their 20 year depression.  Why should we follow in their footsteps?  There is going to be paid either way, but the question is whether the pain should be quick and deep to get it over - which will hurt most those with a financial stake in the bank (stockholders and bondholders), or should we drag the pain out slowly, every day watching another crisis, spending taxpayer dollars with another bailout and spreading the loss and pain to the entire nation over 20 years.   Neither solution is good, but my vote is to make those that took the risk and benefited from the gain to take the loss.  Not the taxpayer.  Short term nationalization of banks now is what is needed to liquidate the banks and purge the rottenness out of the system.  Only when we have rid ourselves - through bankruptcy or the equivalent - of these insolvent banks will we be able to recover the economy and start the growth cycle anew.

Oh and by the way, its time to move your money to a local community bank that you know is solvent.  The return to Main Street is underway.  Do business with people you know and trust.

Obama's Plan to Limit Deficit Spending

Obama is out to prove that he is a fiscal conservative now!  In another yeah, right move, Obama proposes across the board spending cuts in an effort to reduce the budget deficit.  As of October 2008, we had a budget deficit of $455 Billion Dollars.  After 5 months of bailouts/stimulus/wasteful spending, the deficit is heading towards $2 Trillion Dollars.  Obama wants to cut that deficit in half - so we have a $1 Trillion Dollar annual deficit by 2013 when Obama is ready to leave office.

The problem with the plan is that it is still deficit spending.  The US Government is addicted to spending beyond their means, just like our fellow neighbors have been addicted to credit.  This can't go on.  Every year since 1957, our national debt has grown.  Right now, the national debt is over $10 Trillion Dollars.  That means that every deficit increases the debt burden of our government.  Interest on the national debt is over $451 Billion Dollars each year.  Debt is 400%  of annual revenue - some 70% of GDP.  Cutting the deficit in half still means increasing the burden of this debt.  We can't afford it anymore.  It is no coincidence that Hillary Clinton's first trip as Secretary of State was to China - the largest debt holder of US obligations.  

We cannot effectively return to prosperity until our balance sheet is in order.  It is foolhardy to think we can inflate ourselves out of this debt without bankrupting everyone.  Instead of trying to cut the deficit in half President Obama, eliminate deficit spending now.  Amortize the national debt so it is repaid within 20 years so our children can prosper.  Households are taking steps to reduce their balance sheet; why can't my government do the same.   Thomas Jefferson, a man who understood how government should work, cautioned that  

"It is incumbent on every generation to pay its own debts as it goes."

 That is something that has been lost on us.  If we don't address our debt burden Mr. Obama, our Country may be lost.

The Rant Heard Around the World

Rick Santelli's now famous rant on CNBC in reaction to the President's mortgage plan has resonated with America.  Evidence of how he hit home comes from the White House response, which shamelessly attacked Rick in a most undignified manner.  Well, Rick and CNBC are not taking the attack sitting down.  Rick defended himself and once again explained how Obama's plan to use our tax dollars to pay for bad loans so banks don't have to take a loss and the borrower can keep houses they can't afford is simply bad policy and unfair to the nation.  

I encourage Rick and CNBC to tour across the country to rally the 92% of us who play by the rules to make Obama and Congress act in a fair and prudent manner, especially with our tax dollars.  If the government continues on this course, history will look back at Rick at view his rant as the shot heard around the world.  (I have never owned a pitchfork, but if Rick has a rally, I may just go buy one.)

Obama Calls For Fiscal Responsibility - Yeah, Right!

Last week, President Obama signed into law a $787,000,000,000 spending bill.  About 70% of the bill is pure government spending (including using tax dollars to repay irresponsible borrowers'  mortgages) and the rest tax cuts.  $787 Billion Dollars.  Our deficit is now about 10% of GDP.   After cheer leading spending in the Senate and now expanding government spending from the White House, Obama now calls for a "fiscal responsibility" summit.  

This sounds like a Clintonesque listening tour where you gather everyone in a room purportedly to hear their views and you end up cramming down your logic for more spending.  To top it off, the "summit" is being hosted at a the White House State Dining Room (at taxpayer expense).  Fiscal Responsibility is sorely needed in this Country.   Our social programs have morphed from a safety net to help those most in need to an entitlement program where everyone participates in the redistribution of wealth.  Pork barrel politics remains a fixture of legislation.  Tax and spend is the hallmark of our government - whether by the liberal left of conservative right.  Government is too big; it takes up too much of our economy; it burdens real economic growth.  

President Obama is an advocate of big government and big spending.  Don't give me this lip service crap that he is truly interested in fiscal responsibility.  If he was, he would let the insolvent banks go bankrupt instead of using taxpayer dollars to line the pockets of the banks' executives.  He would allow market prices to find their natural levels without government interference.  He would veto pork spending by Congress - including most of the wasteful and useless programs in the $787 billion spending bill. On the revenue side, he would make sure people in his administration pay their taxes like we are asked to do.  It is an insult to America to call for a "fiscal responsibility" summit when you don't believe it.  Stop the nonsense.  Just stop.  The link to the story from the Washington Post is below.

The Washington Post Article Obama Plans Summit Next Week On Long-Term Budget Difficulties

Big Brother Is Now Watching You

We all knew it was just a matter of time before George Orwell's vision in his then futuristic book 1984  would come to pass.  Little by little the network is being put to use.  The latest, courtesy of Homeland Security, is installed in Chicago.  The network of street cameras is up and monitored by Chicago's emergency communication center.  Sure, you make a 911 call and the nearest camera is identified, but take a close look at the picture from the New York Times Article.  This is not just emergency assistance - it is outright monitoring of our activities.  Hello Big Brother.

Tax Cuts For Everyone!

Normally I am ecstatic when I hear of tax cuts.  Anything that will reduce the cost we bear to sustain our government is generally good.  On the other hand, Obama's "stimulus" tax cuts are just plain stupid.  Reuters is reporting that President Obama ordered the Treasury Department to begin implementing the tax cuts to the nation's workers by reducing the amount withheld from paychecks.  How much is less will be withheld?  About $15 per week.    

Barak Obama actually sounded proud of that!  What will $15 per week do anyway?  How many more big screen TVs will that buy?  Let's see, at $15 each week, if saved in our nations insolvent banks (with virtually no interest) after a year, each worker will have about $750.  After 2 years they might be able to buy another TV.  That is stimulus we can believe in!  

Wait - with $15 per week, I can apply for a new mortgage loan.  I will just accidentally add 2 more zeros to it and get a huge mortgage to buy a new, larger home with a third bathroom, then default on the mortgage and have the government pay for it!

The link to the Reuters story is: 

http://www.reuters.com/article/topNews/idUSTRE51G5X720090221

Great Chart from EconompicData!

The Econompic Data blog (http://econompicdata.blogspot.com/) has a great graphic on the moral hazard of Obama's mortgage bailout plan.  Very pithy, but it also points out exactly why the majority of us are so outraged by having our government steal our money to pay for property other people can't afford.  The chart is reproduced below, but you can see more at the above link.

Click on the above chart for a bigger picture