It the economy stupid - 2010
Written by Michael Vass
I realize that most people are getting ready for the holidays and time with family and friends. But for those of us with small businesses this is the time when we start trying to total up the year and plan for next year. To that end, I offer some thoughts.
I have confirmed among bankers I know that all small businesses, at least in central New York but I’d imagine across the nation, are in a worse position than the White House wants to admit. Unemployment numbers are still high and are net increasing the number of unemployed. Christmas sales are sluggish, even with massive discounts in excess of 40% on almost any item you can name.
But look forward a bit. In January 2010 you can expect a surge in unemployment numbers. That’s because those that were employed for the holiday season will be let go. Add to that the 4th quarter earnings of most businesses will report minimal or negative sales growth. Thus I expect the stock market to take a hit, not that it’s recent rise is based on anything but hype.
In addition we will see the Government wax on about how it is doing everything it can for small business. Like a recent SBA loan programs for $30,000. Except it will not mention that the program to increase lending by commercial banks is ill-defined. It requires so much paperwork and restrictions that it requires banks to add personnel just to administrate the loan, which banks don’t want to do. It has restrictions on who banks can lend to and how they might qualify - regardless of their credit ratings or relationship with the bank. It has murky guidelines on disbursement, and will not allow a small business to consolidate debt or use the funds for current liquidity concerns. In effect it is useless for most small businesses, and as I have been told not one bank in central New York, at least, has accepted the program or made a single loan under it.
So much for helping small businesses. And 2010 will likely have even more of the same.
The Obama Stimulus will kick in, mostly around the election, with far more of the $787 billion than has been used to date. Most of that money will be directed to short-term Government based jobs. Items like building roads, giving raises to teachers, and supporting States that are underwater with their budgets. It will do nothing for small businesses more than what we have seen already.
The answer to this problem, according to some politicians, is to create another Stimulus - with a different name. Under this new program even more money will be spent on building roads and infrastructure (temporary Government jobs) and on loan programs to spur small business growth (via programs that few can qualify for, banks don’t understand, and are restricted in the use of the funds such that its effectiveness is nullified).
The net result, in short order, will be an increase in foreclosures and mortgages that are in default. This is the only result from the increase in unemployment and the real number of people not working (not just the Government stats). But polispeak and posturing will make it sound like everything possible is being done, while it is not.
Ultimately, Government unemployment figures will hit 11.5%, and for the first time I believe it may hit or exceed 12% before April 2010. Most of this job loss will be among small businesses. Also there will be a new all-time high in home foreclosures (a topic that has suddenly become unreported in the last year).
In this year I have watched some 20% of small businesses I know go under. I have watched and had confirmation of many more small business owners taking on part-time or full-time jobs just to keep close to even and/or maintain their homes. I am aware of small businesses earning some 40 - 65% less money this year than last, with projections for early 2010 to earn another 25% less on top of that.
But the best part is the taxes. For 2010 many small businesses will have to still pay taxes on money they don’t have. States like New York and California are leaning even more weight on small business to pay for debts that will not shrink. If Health Care Reform passes, even more taxes will be owed by small businesses. Then there is the burden of the “necessarily skyrocket” of energy costs and taxes proposed by the Cap & Trade Bill that is trying to be quietly passed in Congress.
For those that may want to seek aide, the Government offers nothing. Small businesses do not qualify for unemployment benefits, though they pay a lot of the taxes that fund it. Small businesses that are failing are ineligible for SBA loans and banks will not back them due to their increased restrictions in this economy. In fact, a troubled small business can only count on one thing from the Government - a higher tax burden.
This is what 2010 appears to hold for small business. It’s a bleak landscape with any sign of improvement so far off it does not appear on the horizon. Personally I see this as the culmination of a grand experiment of intellectuals and academics that fill the White House. But a person forewarned can make preparations.
Of course I would love to hear from other small business owners. Do you see the same environment as I have? Are you hearing the same comments from your local and regional banks? Are you feeling the same weight from taxes and future tax burdens? Are you experiencing similar loss of profits and revenues? What do you think will happen in 2010?
Did you think about your 2009 tax bill yet?
Written by Michael Vass
So I was just thinking about something interesting. Obviously President Obama has made a big todo about his Stimulus package. He gave everyone who receives a paycheck (and only those people) some $500 - over several months. In addition his Administration gave out $4500 to those that bought a Government approved vehicle.
But has anyone stopped to consider that all this money is income? When I say income, I mean as in money added to your net on your IRS tax forms. I mean that this is money that you are responsible for, and how it affects your tax bracket.
You could even possible include the $8000 home credit, but I believe that is offset by other factors in buying a house. Still it is also income as I understand it.
Thus it is possible for someone to have gained up to $13,000 on their annual income. This is of course money that NO tax was paid on. So it is separate of any gross amounts that you have made. Which can make a major difference.
Consider this, a person filling with $20,000 net, would now be in the higher $33,000 tax bracket if they received money from all 3 programs. Thus any money they might have expected to receive from a IRS tax refund, will instead turn into a tax bill they need to pay in 2010. And that would be a burden on top of the rising cost of living, the increase (of some 150% or more) to gasoline and electricity prices, and other Obama Administration goodies - like Health Care Reform.
Obviously few would fall into that category. But many more will fall into the group that gained $500 to $5000. And that still makes a huge difference. It’s the kind of money that has already cost families across the nation $38 million in food for their families.
Isn’t that wonderful? 344,000 families denied food because of Democrats speed in passing a Stimulus Bill that no one read, and President Obama insisted on. It’s no surprise that this was not something the major media focused on. Pets like MSNBC would never highlight such a dramatic failure of President Obama’s Administration.
But I have to wonder, will they warn the public about the likely tax ramifications that will be due April 15, 2010? Are they going to give all those people counting on a IRS tax refund the chance to consider if the Obama money is going to increase their tax burden? Especially since many people of all income brackets count on that refund to help pay off the Christmas gifts and other bills they are incurring over the holiday season.
I don’t think so. The Obama Administration is desperate to have 4th quarter numbers that show some sign of a false recovery. That means they need the public to buy and now. The chances for Democrats to be re-elected ride on this. Thus hiding the truth - like presenting false Stimulus job numbers, calling a 3 million person increase in unemployment job savings, and tying the need to pass Bills like Health Care Reform to job growth - is just par for the course.
So take heed of what I am saying. Ask your tax professional what the impact of the money from the Obama Administration and Democrats means to your IRS bill. Find out if you really will be able to afford all that Christmas gift buying. Because finding out after the fact may be far worse than a lump of coal as a gift.
And just wait. Next year, if Democrats and President Obama have their way, you can have the extra joy of knowing you will be required to spend even more of your money on health care insurance - even if you don’t want it or can’t afford it - and quite possibly massively more for your energy bills. I bet that will help you buy gifts next year, and increase jobs too.
Not to worry though. Democrats will take care of you like a child on an allowance. Look for another Stimulus package to hook you into even more IRS taxes and increase your dependency on Big Government like a crack addict.
Success of the Obama Stimulus
Written by Michael Vass
Since there have been so many that are imploring everyone to just be happy with the success of the Obama Stimulus, I thought I might take a moment to list the benefits that have come to the nation. The gains since President Obama enacted the stimulus package have been numerous and widespread.
Besides creating several skate parks and artist walks in multiple cities across the nation, the Obama Stimulus has also helped curb homelessness in cities in Upstate New York without a homeless problem. It has helped increase consumer spending, thus ending the recession this summer. Except that the $25 a week actually didn’t affect the consumer spending at all, and the only thing that did improve the numbers was the $3 billion spent on Cash for Clunkers - which was additional spending by the Government. Well at least there is no dispute that the Obama Stimulus created or “saved” 1 million jobs.
Except that it didn’t make it to 1 million. According to the numbers reported by the White House, which were triple checked, only some 600,000 jobs were created. But that’s not quite right either. The White House, via recovery.gov, quietly reduced the number of jobs created or “saved” by 60,000 - because of human errors.
Human errors. That’s a critical statement. Because it has nothing to do with the Obama Administration instructing those that got stimulus money to count a raise as a percentage of a “saved” job. So if anyone got a raise of .05 cents from Stimulus money, their entire job and income was multiplied by 1.8% and used to determine a job that was created. This lead to several reports like from Massachuesetts where a company with 500 employees reported 900 jobs “saved”. Because Government math is the right math.
Of course that has nothing to do with the at least 4 states that had reports of jobs created or “saved” in congressional districts that don’t exist. Yep, there are places that only exist in a map made by the Obama Stimulus, and recovery.gov, that got stimulus money and employed people that live in these other dimensional places. Take for example the Florida 86th Congressional district.
The 86th Florida congressional district does not exist. Anywhere. Yet they contacted recovery.gov and reported that they received $3,000,000 to create 5 jobs. So money was spent on a place that is imaginary and gave work to people that are best identified as illusions. Or more hopefully someone made a major mistake. Over and over again as this has happened repeatedly in multiple states with multiple fictional districts.
But don’t worry, this report was triple checked before being released to the public. The White House said so as late as October 28th.
And be reassured that President Obama will not let this “side issue” (as stated in an interview with Major Garett of Fox News - the people that weren’t real news remember?) clutter up the success of the stimulus. I mean he has the unemployment rate to brag about. It’s just 10.2% - according to Government figures because the real unemployment data shows 18% if you include those people no longer able to get unemployment checks, which the Government doesn’t. That’s only 2% over the absolute ceiling that President Obama promised the public, and even White House economists now state that the numbers can go higher by next year. (My early guess was 11.5% but I may be wrong - to the low end)
Plus President Obama has the ability to brag about the cost per job from the Stimulus. Let’s just assume that even the fictional places and people, plus all the Government math, are all right. That means there is roughly 600,000 jobs. We spent roughly $166,000 on each job, and each job will generate roughly $30,000 a year. That’s only a loss of $136,000 a job, which by Government standards is pretty good.
The best part may be something I just learned about today. Remember Florida? Well Representative Ginny Brown-Waite wanted to see just how much money President Obama spent on creating the recovery.gov website that has been so accurate and outstanding. How much do you think it was worth to have this site created with such pinpoint accuracy and authenticity?
Well the answer, as given to a member of Congress, is who knows? Yes, I will repeat that. There is no known cost for creating the website Recovery.gov. Made for the Obama Administration, the contract is redacted so as to completely obscure what the original cost was. Since this has nothing to do with national security, and since just a member of Congress was asking I’m glad we got to know this minor “side issue”.
But the news gets better. We also know, thanks to Representative Brown-Waite, that it cost a mere $18 million to update the Recovery.gov site. That’s barely enough money to have created (or “saved”) 15 jobs - by Obama Stimulus standards. And I know all those web designers like M V Consulting, Inc are thinking that they might have been able to bid lower than $18 million dollars to UPDATE a website. But it wouldn’t have worked as the CBO offered to do it for $600,000 (not even enough to create - or “save” - even 1 job) and they were turned down.
So don’t you feel happy? Feel a tingle up you leg? Due to the Obama Stimulus, which is completely a Democrat idea and passed by Democrats well after President Bush was gone, every American can be proud to say they have paid for what I believe is the most expensive website in the world to date. Perhaps ever.
And it is so accurate that if it were a clock it would be right twice a day - sometimes. It’s so transparent that only reading details with your eyes closed would be more informative. It’s created so many jobs that only the number saved is more effective at reversing unemployment. It’s so cost-effective that it inspires trust in Health Care Reform and Cap & Trade (and the more than whispered 2nd Stimulus for 2010) that only the utter brilliance in planning that was Cash for Clunkers could achieve.
Yes, President Obama along with Democrats and Vice President Biden should be basking in the joy that the Obama Stimulus has succeeded in creating. They have really proved me and all other detractors wrong.
“How can we expect the administration to run stimulus when they can’t even run a Web site?” - Rep. Ginny Brown-Waite of Florida
The Stimulus didn’t work because of consumers
Written by Michael Vass
As I scanned thru the news I ran into something that caught my eye. A minor article that spoke about the economy, President Obama, and his approval rating. One year on, Obamamania cools to luke warm support says nothing new really, but it hints at something I had not suspected before.
It hit me when I read this quote
“He is “the first African-American president, a young man who has won many honors and done great things. He is a cultural phenomenon in the US and around the world,” [Professor Clyde Wilcox of Georgetown University] said.”
Considering that President Obama hasn’t done anything, let alone anything great, I was amused at the quote. Which made me think of the Nobel Peace Prize that President Obama won. Based on the things he might do at some point in the future. A kind of treatment that only celebrities and rockstars tend to get.
But that’s it! The answer to the problems in the economy. President Obama passed the Stimulus package making sure that anyone who gets a paycheck (and only those people as long as they don’t get paid too much) would have an extra $20 a week. Which is exactly what many of the souveniers and t-shirts featuring our Presidents face and unyeilding smile sold for.
The way to stimuluate the economy was for every American to buy a product with our leaders visage every week. Not only would it improve the economy, and of course spread the joy that is President Obama beyond the thrill his mere voice gives MSNBC, but it would resonate with the ego our President has.
No wonder the Obama Stimulus was passed so quickly. Approval ratings of 70% don’t last long when you are “sharing the wealth” and “redistributing” private industry. But it wasn’t his fault that the stimulus didn’t work, it’s ours since we all don’t have shrines build upon the trinkets that have been available since his election by now.
It all fits. And I can see why President Obama is annoyed by reporters asking him petty details about the economy. They should have clearly seen what the stimulus money was supposed to be spent on. How dare they rain on his parade and slow sales. Their negativity ruined the path out of the recession. Good thing there was an extra $3 billion hanging around to prop up the Cash for Clunkers program to make the 3rd quarter look more successful than it was.
But perhaps, as Congress and the President continue to plan to use money America does not have, nor will for another decade or 2 if ever, for another Stimulus package they might mention that we are supposed to buy all things Obama. At least that way, when the plan fails yet again, the public will only have themselves to blame. Because it couldn’t possibly be the fault of a President that “done great things”.
Examining President Obama and his Stimulus
Written by Michael Vass
I almost feel bad for President Obama. He came out strong with plans to change America. He dove head first, leaping without looking, into Guantanamo Bay, the economy, healthcare, and Afghanistan. He promised a transparent Government, with accountability, and decisive action.
So far he has failed at every turn to provide a single positive. His supporters can only state, “Just give him more time.”
But how much more time does he need? When President Obama passed the Federal funding budget, $410 billion, it contained no less than 3,000 earmarks. Which he blatantly signed and allowed though he consistently promised that he would never do that. The $787 billion Obama Stimulus was - no, IS - a fiasco from the start. No one read the Bill, and consequences as severe as denying tens of thousands of families food was just one consequence. But mor on that in a second.
President Obama is mired in confusion when it comes to what will happen with Gitmo and the detainees. Afghanistan is even worse as whatever plan existed in the spring no loger exists. In fact President Obama has his handpicked General for that theater of war sitting for over 45 days waiting for an answer to his request to expand the number of troops - to protect the troops and accomplish the mission he was given. He has spoken to this General 2 times in 100 days. How long must we give the President before his inaction is responsible for any American deaths in that nation?
President Obama was able to show positive economic numbers for the 3rd quarter, technically signalling the end of the recession. Of course on the same day, new unemployed numbers came in at over 530,000. Plus the big trigger for the gains in the 3rd quarter was the Cash for Clunkers program, that went over budget by 200% for a total cost of $3 billion. The 4th quarter will not see that artificial bump to numbers.
I’ll skip over the lack of transparency and other issues in the Health Care Reform Bill. I’ve covered that extensively already. I won’t mention the problems pending in the Cap & Trade Bill that is sitting on the sidelines. I’ll avoid for a moment the increased aggressive nature of Iran and North Korea with nuclear programs and missile launches. I won’t even begin to discuss the fact that allies of America across the globe have done nothing to help us in foreign policy on any level. And don’t get me started on the increase of size and power of the Government now that it owns private companies (and can absorb any company it wants), dictates who can be employed and what they get paid.
Let me get back to the Obama Stimulus.
It was the second thing President Obama did. It was fast, so fast that no one knew what they had done. It was big, bloated big, with more waste and ineffectiveness than even Congrerss is known to do. it was hailed for months as the answer to the economic ills of the nation. It was heraled as the first example of how the Obama Administration would change America. For 6 months the Obama Administration talked up hopw great the Obama Stimulus was.
Then they shut up.
We now know a few things about the Obama Stimulus that cannot be questioned. About 15% of the total has been spent so far (about $118 billion, though there is no exact number anywhere). It has caused over 100,000 families to become ineligible for food stamps. It has caused an unknown number of people on other Government programs to lose or lower aide. It has not stemmed unemployment in any scope of discussion. It has created numerous skate parks and art walkways across the country (it even funded $500,000 to fight homelessness in at least one city without homeless).
What can be argued is that the roads and bridges that were promised to be fixed have not been (the Golden Gate Bridge could be one such example). It can be said that the Obama Stimulus has extended the problems of the recession. It can be stated that unemployment is 2% higher than the worst case scenario described to pass the stimulus package, thus invalidating any statement of jobs “saved” or created. It can be argued that any program meant to provide a stimulus that does not take immediate action is not a stimulus; and with the bulk of money being spent in 2010 - an election year - it is simply a political tactic to maintain a Democrat power base. It can be argued that the entire Stimulus is an embarrrassment.
Worse is the lastest news. Following reports from every State in the nation it has been determined that 30,000 jobs were created or “saved”. Those jobs cost $71,000 each as an average, while paying closer to $30,000 each. Which implies absolute waste and ineffectiveness. The best of States claimed less than 5,000 jobs, the worst 6. That is not a typo.
Beyond being the singular largest statement that the Obama Stimulus is perhaps the worst named Government program in my lifetime, there is new news. According to the Associated Press it wasn’t even good enough to acheive that paltry level of success.
The AP also stated that the upcoming White House report on the Stimulus, expected to shower praise on the plan, will likely contain further inaccurate numbers and exaggerations. Which at this point the White House has neither refuted nor debated.
So I ask supporters of President Obama, how much time does he need? How far do we need to travel down the path he seems to be leading before we say this might be the wrong path? When is it that we will stop praising the President for what we hope he will do (like the Nobel Peace Prize), and pay attention to what he is doing and how it is failing?
Don’t believe the facts, believe in President Obama
Written by Michael Vass
I think I get it now. President Obama and leading Democrats are embarrassed. With the complete failure of the Obama Stimulus, Democrats look as dysfunctional and incompetent as their detractors have claimed. So the story has to change.
From before the onset of the Obama Stimulus, I have said it was a bad idea. When Speaker Nancy Pelosi first floated the idea (then only a mere $50 billion in cost) in 2008 I was against it as a waste of our taxes. When the Obama Stimulus became bloated to $787 billion I screamed at how bad it was. The fact that no one, in the White House or Congress, read the proposal confirmed every fear I had.
But it became a fact, and we were promised success. We were provided imaginary numbers of success and job improvement as facts like the Government unemployment numbers steadily rose. But the fact that the Obama Administration had cuckholded the majority of the news media ensured that the focus was on their rosy projections and not reality.
Then came the reports. Facts from every State in the nation. And as they came in reality was almost unavoidable. The Obama Stimulus was only responsible for wasting the taxes of future gererations that have yet to even have a chance to earn a dollar. And there is no question of failure.
Not even MSNBC, the favored parrot of the Obama Administration, could cover up the evidence. Claims of 150,000 jobs created in May, false. Projections of 1 million jobs created or “saved”, a pipedream more likely to exist in the mind of a crack addict. The waste? In the tens of billions.
Every Democrat responsible should be embarrassed, to say the least. In Binghamton, where I live, Mayor Matt Ryan was able to create or save 430 jobs, with 38 small businesses created. That may not sound like alot, but that is about 1% of the population. The Obama Stimulus was proposed to improve the lives of roughly 1% of the nation (in 2 - 4 years), with 1/3 of this happening by this month. In fact the Obama Administration acheived 30,000 jobs out of 1,000,000 (don’t even think of it in comparison to the 3.5 million jobs targeted). That’s a failing grade no matter the polispeak spin.
In fact the city of Binghamton out performed the entire State of Rhode Island, among others. Bridges and roads across the nation are no better off. And unemployment is about to cross 10% (2% higher than the worst case detailed by President Obama in February).
But think about this. The Obama Administration has decided to avoid their failure and accountability. They are attacking anyone that points out their ineptness. They are using their mouthpieces, MSNBC and others, to shun and berate those that would provide fact and not the lofty words of President Obama. They are distracting the nation as best as they can from the truth. The truth that a candidate Barack Obama promised to make as clear and transparent as no other Administration had ever done.
While this is happening, the Democrat led Congress is marching forward with a Health Care Reform that is equally as ineffective and filled with faulty logic as the Obama Stimulus was. No one has read the Health Care Reform Bill, as it has yet to be fully written. The cost of the Reform has been obfuscated by seperating some of its costs from the Bill and using a math that only the Government could decipher. And again, any form of critique is being declared racist, uninformed, false, and/or forbidden.
All this while in the cracks a Cap & Trade Bill is moving slowly forward that will increase the cost of heating and electricity. Claims that it will improve the global climate are laughable. Claims that it will reduce costs are unintelligible. And questions of whether the Bill has been written or if anyone has read it go unasked.
So yes, the Democrat leadership are embarrassed. They are desperate to keep attention on anything but the attempts at leadership they have presented thus far. They are holding on tooth and claw until they can get re-elected, keeping their majority grip on changes in the nation.
This is change I believe because it is happening. The results are striking the nation, like it or not. And the President is ducking for cover until the dust hides him from sight.
But the question to you is this. Will you be good little voters and only pay attention to what the White House says and none of the facts? Will you continue to be enraptured by the mere sound of President Obama, though those sounds equate to words without substance? Will you cower to the will of the Liberal far-left as the nation is fundementally and irreprobly changed? Will you vote to re-elect the very people that look upon reading the Bills before them, or answering to the electorate, with disdain and contempt?
The 2nd stimulus - out the corner of your eye
Written by Michael Vass
Michael Scherer of TIME had an article today that I thought was quite interesting. The article Is the White House Planning a Second Stimulus Payout? outlines what the prospects are. And I agree straight down the line, as I did months ago.
The fact is that more and more of Washington DC analysts and commentators and press are catching on to what I proposed in the past. That the Democrats have no clue about economics, the Obama Stimulus is a complete waste of money, and this failure will be covered up by real economic stimulus -
But the key is not that a second Obama Stimulus is being planned. It’s not that the initial parts of the 2nd stimulus is being put together to be passed by Congress before the end of the year. The critical thing to understand is that all of the parts of the 2nd stimulus will be done independent of any other part. I have to give Scherer credit for noticing that before I did.
The only reason that it will be done in this manner is because Democrats can’t have yet another stimulus plan on their necks. They will be walking into the 2010 mid-term elections with failure surrounding them. The smell of the results they have thusfar reaped can only get worse if the phrase “2nd stimulus” reaches the ears of the voting public.
After now having the facts made public, with far far less than the promised 1 million jobs created at a cost of $71,000 each, the White House and Congressional Democrats are reaching to find a polispeak angle to imply success. Add to this the fact that all the unpopular Health Care Reform Bills are more expensive than stated and questionably less effective, while being completely unwritten and hidden from the public eye.
And there is still the forthcoming Cap & Trade Bill that will increase, possibly by double in some instances, the cost of electricity to the public and business.
Democrats calling for even more money to be spent to stem the rising unemployment rate, in another package of a size that doesn’t fit many calculators, would be committing political suicide. So instead, the 2nd stimulus will be done in small parts, spread over time, without any mention of another part so that the general public does not notice.
In effect Congress is pulling a scam. Selling the public one item and then another because its needed as much as the first part bought. And so on. Kind of like buying a car, and then being told that the engine, the steering wheel, and each tire are all separate of the cost. And you are stuck with the car no matter what option you might chose not to pay for, or that may not work even if you do.
So I am not surprised that Michael Sherer has noticed what I saw coming. I’m just wondering how long it will be before anyone in the press dares to ask President Obama about it.
How effective is the Obama Stimulus?
Written by Michael Vass
So just before the White House comes out with its victorious cries of success on the Obama Stimulus, I suggest we all look at what really is happening. Yep, time for a bit of math. Something I’m sure President Obama’s supporters will hate.
Right now several States have released the numbers being submitted to the Government about how many jobs were saved with the Stimulus. I say just saved as any claim at job creation pales in the wake of 9.8% unemployment. That’s 3 million Americans without a job since the Stimulus passed, that’s almost 2% higher than the guarantee the Stimulus was sold to the public to preserve. And that says nothing of historic levels of mortgage failures, continued bank insolvency, and a real unemplyment in excess of 15 million people.
But staying focused on the ’saved’ jobs, which includes jobs that are part-time, temporary, and even a few full time full year jobs. I was able to find 7 seperate reports via a google search for stimulus package report. The States are: California, Michigan, Minnesota, New Mexico, North Dakota, Oregon, and Tennessee.
California was the big winner. They claim 100,000 jobs saved since the Stimulus passed. Which sounds great, and will be the big focus of Democrats. What they will avoid is the fact that it cost $5.3 billion. Working the numbers that means it cost $53,000 for each job. And somehow I don’t believe that 100,000 people got that for a year of work via the stimulus. I’ll bet money on that.
Michigan lost its mind for its jobs, spending $189,743 per job ’saved’. That may sound like quite a bit (especially when you factor in the fact that it is in the Democrat threashold of ‘rich’), but it does not top the list. That honor goes to North Dakota.
North Dakota reported spending $207 million of stimulus money. At the same time they reported 624 jobs. That’s $331,730 per job. This ridiculous amount of money is insane. Especially since the jobs created did not pay that amount to any 1 individual. Which means the money is either being wasted, or otherwise disappearing.
The other States come in from the relatively reasonable $18,780 spent in New Mexico (for 4100 jobs) and $27,722 spent in Tennessee (for 7700 jobs) to the extreme $135,593 in Minnesota (for 11,800 jobs).
Does any of that sound reasonable? Maybe New Mexico, but what about the rest? Why is it costing so much to give a person a $30,000 job. In fact if you do the numbers, it would have been better to give every American man, woman and child $2600 than to have used the stimulus as it has been so far.
Which highligts something else. I’ve said it before, a stimulus is something that causes an immediate reaction, the Obama Stimulus does not. But the Obama Stimulus does spend the bulk of its social reform money in 2010, just before the mid-term elections.
Does that sound like buying votes? I can hear the political ads now. Some Democrat up for re-election will stand before a crowd claiming that any and every improvement in the economy is a result of the Stimulus [as opposed to reguar cycles] and promise that the next Stimulus plan will be even better than the last [which I said months ago would happen]. Yes, Democrats will praise what has happened, hoping the public doesn’t stop to think about it.
We were told all the bridges we use would be fixed - they are not. We were promised unemployment would not exceed 8% - it has. We were told that jobs would be created in the millions - they haven’t even been done in the dozens. And every job that has somehow been credited to the Obama Stimulus costs more than 2 jobs anywhere else (in total).
But I will say this, it is a stimulus. It will do it’s job. It will stimulate the political futures of Democrats. It will help to preserve (save of create) their jobs in Congress. The real cost? Roughly $3,896,039,603.96 for every Democrat that get re-elected in 2010. And if you are President Obama, Nancy Pelosi, or a Liberal, I’m sure you think its a bargain.
Democrats are planning to buy your vote, again
Written by Michael Vass
In the not so far off past, long time readers will recall that I had a post about then candidate-Senator Hillary Clinton. The title was Senator Clinton tries to buy cheap votes with baby bonds.
The issue at the time was the polispeak pitch by then-Senator Clinton to families across the nation. She proposed, half-heartedly as usual, to give every child in America $5000. All you had to do is be born in the nation. At the time I stated
“First, who is going to come up with the 20 billion dollars such a program will cost? You will, say hello to new taxes.
Second, what if your child doesn’t want to go to college. Maybe they want to be an artist, truck driver or construction worker. Where does their money go to? Do they just lose it? Where does that extra money go?
Third, when we say every baby, that includes the babies born of illegal aliens (or the silly undocumented workers designation - here’s a clue - the document missing is a U.S. birth certificate or green card hence illegal)…
Fifth, if the average college tuition is $22,218 (private) or $5,836 (public) and we assume 10% annual growth for just 18 years that means (forgive my math it’s been a while) $98,973 and $32,380 respectively. Taking $5,000 for 18 years at 10% (current rates are 4.75%) then Senator Clinton’s generous gift of your money generates $27,936. Now if my math is correct (which I’m sure I will be told if I am not) and interest rates go up to and stay at 10% (not going to happen) there is still a shortfall of $4,444 just for [public] school.”
It was a laughable idea, and was dropped by Clinton the second one of her Democrat Primary competitors raised an eyebrow at this shameless attempt to buy off the votes of the public.
But it seems that the idea didn’t die in October 2007. {yes for all the new readers, I do go back that far in my political coverage. And further with literally hundreds of posts at a separate blog platform - check the link above}
The new proposal from Democrats is the ASPIRE ACT, standing for America Saving for Personal Investment, Retirement, and Education. Given that Democrats have already wasted $787 billion, set up a budget that’s some $3.5 trillion in deficit, and are trying to past a bogus Health Care Reform (at least $1.2 trillion when Congress fails to cut Medicare) with the Cap & Trade slipping in the back door (double your electric rates) - there just isn’t extra money around to waste on this idea.
A mere $500 dollars is being proposed for
Forgetting that the billions it would cost have to come from somewhere, higher taxes yet again, let’s think about this plan. The problems above still all apply. Yes even the illegal aliens since the interpretation of the Constitution these days requires that any law to benefit all Americans must include everyone in the Country. So your taxes would help give an illegal alien your money directly.
Actually the second question was answered. Still it’s a chunk of money on top of all the other rampant spending from Congress. But I have to wonder, why this idea now? And again I am reminded of Hillary Clinton.
Clinton proposed this idea to bolster he political standing and distract from her many flaws and non-convictions. Congress right now needs much of the same thing. Health Care Reform, as it currently is being discussed - nothing is written yet, is still considered a bad idea across the country. Yet Democrats have blatantly stated it’s going to happen no matter what voters think. Such an attitude will surely come back during the 2010 mid-term elections.
If Cap & Trade passes as well, the hit to every Americans pocketbook will really be hitting home by them. Both in the higher cost of electricity and fuel & for any product made via electricity - can you name one that isn’t?
Democrats need something to distract voters from the fact they just got it hard and without grease or so much as a here it comes. Democrats need a way to ensure that their super majority holds so they can complete the social engineering plan they have enacted under the standard of “Change you can believe in”.
So just as they bought favor with promises of an Obama Stimulus that put nothing in the pocket, took tens of millions in food away from American families, and increased unemployment 2% higher than what President Obama stated would happen is absolutely nothing was done. Well that’s not completely true. A bunch of cities got skate parks and some people got a part-time job for a week.
Do you want to be bought? Is your vote in the 2010 mid-term elections for sale at a discounted price from just 2 years ago (talk about an economic crash). Are you as dumb as Democrats hope you will be?
I don’t think my readers are.
CBO confirms the problems with Health Care Reform
Written by Michael Vass
It’s a victory, if you are a Democrat. Then again, the Democrat-led Congress has yet to read any of the Bills being voted out of Congress since the Obama Administration took over. So I doubt they really know what the CBO has just said.
The review by the CBO of the Baucus Bill has stated that it will cost roughly $829 billion. That’s over $100 billion more than what was proposed. So already the Bill has a strike against it. But Democrats call this a victory as it is less than $1 trillion they thought it might actually cost. Funny how they quote one cost, knowing that it will cost far more. Makes me wonder why the budget is so far out of whack (and prior Administrations of either Party are no better on this).
But here is another gem that you likely won’t here from Democrats that is in the CBO report. After all the hype about how we must provide healthcare for 47 million uninsured people, the CBO says that the Health Care Reform will still leave 29 million people uninsured. Yes, 29 million of those people that we just have to change the entire system for will remain in exactly the same the same position as they are now. Minus $829 billion.
Remember that the 47 million is a false number. It can only be reached by adding in 12 million or so illegal aliens, and 7 million or so people that CHOOSE to not have healthcare. Which leaves a net total of 28 million uninsured. So in fact the Baucus Bill CREATES roughly 1 million new people that will be uninsured.
Don’t worry though. At least 1/3 of all the new people that will be covered by the Baucus Health Care Reform will in fact be illegal aliens. That’s right, the CBO agrees with Representative Wilson - President Obama and the Democrat leadership lied.
So that’s strikes 2 and 3 right? The Bill should be out. It should be history, a complete failure that needs to be brushed aside for something that actually will do what it’s title states. But, remeber this is a Democrat victory.
The Bill is able to pass the stipulation President Obama announced on television. Yes, they are trying to keep a promise for a President with a record of 97% failure to keep promises. How encouraging.
How will this be deficit nuetral? Matter of fact, as you will hear Democrats tout, the CBO claims it will save $81 billion over 10 years (that’s a total saved over 10 years, not a lump sum). But what you aren’t being told is how it gets to that savings.
$400 billion will come from Medicare, or in other words the elderly. So if you get old, expect to have less coverage and care when you need it most. I bet that line will be real popular, if it ever gets into the mainstream media, when it comes time for re-elections. Or Congress will just ignore the cuts in Medicare, as they have done in the past, and the price will skyrocket to $1.2 trillion. But no one will be paying attention at that point, and even if you did it will be a law and so you are S.O.L.
This says nothing of the increased taxes that will be placed on companies and current premium health insurance plans. Not sure what that means? Higher taxes on the average American. Middle class taxes in effect. Just like every tax on business is passed on to the consumer and public. Kind of like Cap & Trade but with your health.
Yet the joy does not end there. Don’t forget about that pesky increased 29 million without health care. They will be charged for not taking the Obama Care like a good American should. They will be penalized, and that is part of the cost savings the CBO found. $4 billion dollars is expected over 10 years, from most likely people in their 20’s. That’s roughly a fine of $1800 each person, each year they don’t get on-board with the plan. But don’t call that a tax hike.
Of course you could decide not to pay that fine. As I have already covered, the Bauchus Bill covers that possibility. If you fail to pay the fine you will go to jail, and/or have to pay $25,000. Not sure how much of that is factored into the CBO numbers, but I bet it’s in there. Cost savings indeed.
Look this thing is still full of holes. It still is not a benefit to the nation. It still will cost more money than ever projected, as has Medicare and Medicaid. Which says nothing of the fact that this places Government directly into the private lives of Americans.
Health care reform is not a Right. Just as there is no Right to owning a house, or eating your favorite food, or driving a car. The Government can’t post a document onto the internet in less than 2 weeks, but they are claiming to protect a Right that does not exist in the Constitution and was created to invade your privacy.
Yes, you won’t hear this in the major media. Because they will be busy with polispeak celebrating a victory. With hopes of convincing people this is a good idea, long enough to pass this and glide past the 2010 mid-term elections. That is if you don’t pay attention.
Are you?
Obama Stimulus saved your job - or did it?
Written by Michael Vass
It’s almost funny how the Government can make you feel less intelligent than a 5th grader. I mean if you thought you knew how to add, the Government makes you seriously question that. Because the math they use for some of the things they state is either wrong, or so advanced to make me wonder what I was taught. Especially since the Government is absolutely sure that they know better than the public.
Case in point is the Obama Stimulus. The Government took $787 billion of our money to ensure that the economic crisis that we were facing in January would not get worse. President Obama, and a slew of Democrats, politicians, White House economists, and others swore that passage of the Stimulus package would “create or save” jobs. President Obama virtually guartanteed that if the Stimulus was passed unemployment would be capped at 8.5%, the recession would end, and there would be sunshine and lollipops for everyone.
The Obama Administration really rammed home the thought that the Stimulus had to be passed immediately. So no one in Congress read the Bill, nor did the White House. And the prospect of proving a “saved” job was set aside as the rantings of racists and greedy corporate execs. So the Bill that no one read was passed, preventing a ‘Depression greater than in the 1930’s’.
Since the passage of the Obama Stimulus the economy has gotten worse. Unemployment has not only surpassed 8.5% (currently 9.7%), it is now forecast - by the White House - to hit at least 10% this year. Other forecasts target 11.5% unemployment in 2010. Which says nothing of the real unemployment rate (which is not how the Government counts) of 15% currently or what it will be in 2010.
Mortgages in delinquency rates have reached highs never before seen. According to the MBA (Mortgage Bankers Association), which has records going back to 1972, the delinquency rate – loans that are more than 1 month late but not in foreclosure – is 8.86% as of August. That is a new high, breaking the record set in the 1st quarter of 2009. If we include mortgages that are in foreclosure the rate is 13.16% also an all-time high.
Thus we see directly that actions to prevent increases in home loan defaults have failed, and the Obama Stimulus failed in this regard as well. Which breaks promises that President Obama made about passage of the Stimulus package.
Yet none of this prevented the White House from claiming that 150,000 jobs were “saved or created” by the Stimulus in May. Which was announced as the White House pushed the auto industry into bankruptcy, immediately forcing over 100,000 people into unemployment.
Better yet. Over 1 million more people are currently unemployed today than if the Obama Stimulus was never passed. That is according to figures given by President Obama to Congress and the nation.
Still none of this has prevented the Obama Administration from strutting like a peacock while stating that they have now “saved or created” 1 million jobs with the Obama Stimulus.
Less noted by the Obama Administration is another part of the conversation the White House Council of Economic Advisers had at the same time with the news media
“In a conference call with reporters, the council chairwoman, Christina Romer, said it was “absolutely correct” that other factors may have affected the economy, but that the stimulus plan was “one of the biggest.”
So with my 5th grade math I get the following. The White House says they “created or saved” 1 million jobs. But you can’t count a “saved” anything because you can’t prove it. Effectively it does not exist. So that is 0. Thus we are left with 1,000,000 + 0 = 1million jobs.
But we must subtract no less than 1,240,000 jobs up until June and add in at least 216,000 jobs lost in August or 1,240,000 + 216,000 = 1,456,000 jobs lost.
So the real math of 5th grade says 1,000,000 – 1,456,000 = negative 456,000 jobs.
Thus the math that allowed the Greeks to figure out the distance to the moon, the math that every child in America can do, the math that has Americans balancing checkbooks and buying groceries says that the Obama Stimulus – at best – has lost almost 500,000 more jobs than promised. And this assumes that 1 million jobs were created somewhere that no one has seen, nor has been reflected in the unemployment numbers. A strutting peacock indeed.
I suppose the ultimate thing is this. What do you believe, simple math or the polispeak words of an elected official with a vested interest in the 2010 mid-term elections and Health Care Reform Bill?
I think you can see my choice. What’s yours?
Alcoa - my investment update
Written by Michael Vass
Back on Febrary 24 of this year I was discussing the stock market and economy. At the time I was mentioning my expectations for a continued drag on the market, and that there were several opportunities to be had. One of those opportunities was Alcoa (AA on the NYSE).
At the time Alcoa was severely below book value. So I took the opportunity to buy the stock at $5.55 and decided to follow the investment with my readers. On March 19th I stated that the target I was looking for was $14 - $20 and expected the stock to reach that in 18 - 24 months. My basis was via a valuation based on a then discounted book value of $10.
On April 14th the stock stood at $9.25, a solid 67% return. And at the time the market was still shaky. Unemployment numbers were just starting to exceed the projections of the Obama Administration (even after authorizing a $787 billion stimulus package meant to curtail unemployment). And I decided to see what would happen if I hypothetically traded the stock and repurchased after the 30 day tax window.
On May 18th I proved that holding a position, while the fundamental reasons for owning the stock have not changed, outweighs the concept of trading a stock. the net difference was small, but when you are talking about losing money that you could have kept even a small amount makes a difference.
All that being said, I now will inform my readers that I sold half my position in Alcoa (AA). My sale price was not my $14 low end target, nor the $13.60 it recently reached as a high. I sold the position for $11.60. A tidy 109% profit. And I continue to own some of the position as I still believe that under my original outlook, the stock should reach $15 - $20 in the next year. Though the book value of the company has dropped as I factored into my expectations.
But I want to also share with you my next intention. And this is based far less in empirical numbers than the shape of the economy. I plan to buy E-Trade (ETFC on NASDAQ) at the open of the market. I expect to get a price of $1.50 or so.
My reasoning is simple. One of 3 things are going to happen to the company in the next 18 months.
As a bonus, E-Trade also has another factor that I like. It is trading around .5 of book value. In addition it is held 20% by insiders and more importantly 44% by institutions. Thus the company is worth more absorbed or liquidated than as it exists. Even discounting the book value significantly the company is worth more just on the basis of the number of active and long-term accounts it holds.
My guess is that there are too many institutions holding this stock. They all couldn’t get out without killing each other, and certainly not at a profit. Thus a take-over is likely to happen. In fact it is logical considering all likely factors.
I would expect this company to be aquired for around 3x book or roughly $9. But again I will adjust the current numbers down and discount the book value to $2 per share. Which gives a takeover price of $6.
I may be wrong on this price, or the exact nature of what moves the stock higher. But I believe the chance of the stock collapsing is minimal. So I will take the shot. My target, without a takeover is still $6, as once the stock rises above $5 it becomes marginable and will rise on that basis.
Keep in mind one thing as I say all this. A stock trading at $1.50 is expected to go bankrupt. The real challenge is to get out of the stock before it does so. Thus any good news will lift the stock dramtically, while negative news is already priced in generally.
Before you follow any of this advice, speak to an investing professional. I used to be a stockbroker and I have several factors I use for my own decisions. I have not discussed them all here, nor will every investor be willing to assume risk as I do. Think about any investment before you make it.
Now let’s see how well I do with this.
American economy: 2nd half 2009 to 2Q 2010
Written by Michael Vass
Once again I am looking forward in time at what I expect to see happen to the American economy in 2009 and the first half of 2010. In past years such reflections have always wound up being 62% or more correct. Something I am of course happy to say, though considering the downturns that I have correctly anticipated I did prefer to be wrong.
Still we all look forward. And this is what I expect.
It is a given that the Obama Administration currently states that the unemployment levels will reach 10% in this current year. Debate rages on the potential of unemployment going even higher in 2010, and the exact number of people unemployed that do not count into the Government unemployment figure (people no longer count as unemployed after several weeks – even if they remain without work).
My expectation is that we will see unemployment hit 11.5% by the second half of 2010. Which by my estimate would mean that some 18% of the nation would be unemployed in total. This obviously bodes very badly for consumer goods companies. As well as the banking sector. Likely the rate of new business growth will be negative and existing small businesses will close at an exponential rate.
Thus 4th quarter sales in 2009 will be very bad. I expect to see no growth and relatively strong losses over the season. I would not be surprised to see the quarterly figures down to -1.5%, and that retailers will be slashing prices 40% just to clear out inventory. The start of the 1st quarter of 2010 will have some of the largest increases in unemployment ever, with the exception of the Great Depression maybe.
This ties directly into the mortgage foreclosure rate and new home sales. I expect the worst here. Already there have been 75 banks that have failed in 2009 so far. The largest of the year has been Colonial BancGroup, directly tied to mortgages. But I believe that by the end of the year we could see a total of 125 banks closed and an even larger financial institution collapse.
I expect that this will bolster another round of pressure on the housing industry. Home prices will likely fall another 3 – 5% on average. And it will reinforce the sluggish sales going into the 4th quarter.
A factor that has not been spoken about much at this point will be energy costs. Not considering the effect of Cap & Trade, crude oil has been on the move ahead of the cyclical trend in pricing. Currently prices are around $70 a barrel. I believe that this winter will be colder in the northeast (so much for global warming) and with all the other factors involved we could see the price of crude oil rise to $90 by the 1st quarter 2010.
Moving hand in hand will be the price of gold and other commodities. Fueled by the increase in mortgage failures, the increase in bank collapses, and the unemployment increases, there will be a rush to security with Gold being the thing to have. I can imagine seeing gold spot prices reaching $1100 early in the 1st quarter and stabilizing there.
Very likely, due to these circumstances, the dollar will weaken especially from the spending spree in Congress and the White House. IF Cap & Trade, Health Care Reform, and several other promised changes are enacted as proposed the national debt will increase quickly with projections exceeding $11 trillion dollars in 10 years. Which will make American debt nearly worthless to purchase by nations like India and China. The only reasonable means to encourage their continued support will be to increase the Bond rates, sparking inflation.
Higher costs of energy means increased costs to employers. Which will be passed to consumers, who will already be burdened by the prospect of losing jobs. The other alternative will be to fire more workers. Again adding to the pressure on 4th quarter sales and mortgage foreclosures.
Increased transportation costs, the proposed increase in taxes for the Health Care Reform Bill (which I expect to be shoved thru Congress under Democrat only support and with minor changes), and the pending repeal of the Bush tax cuts will all create inflation. This will likely be hidden as it has been to date – via smaller portions of food and goods, coupled with slightly higher cost, plus an exodus of companies to foreign soil where workers are cheaper to employ.
I expect that oil companies will again be the target of Windfall taxes, while domestic offshore oil and natural gas drilling will be killed as an option. Renewable energy options will be touted as answers, and more money will be dumped into Wind Energy and Corn-based Ethanol. Neither is viable or anywhere near realistic, but will contribute to the inflationary increases that should start to catch attention in February 2010.
I expect that the stock market will react to all these factors in late September – amplifying the normal October sell off. I believe that another downturn will take hold of the market in January until April as year end earnings will be flat compared to estimates in most industries especially retail sales. Mining, Gold, Coal, and other commodity dominated stocks should prosper though. If I am correct then we could see a low in the market of somewhere around 8200 – 7900 by November 2009 and again in March 2010.
Expect a growing call for a second Obama stimulus to start around November at the latest. I would expect this to take the form of a check, much like the Bush stimulus, in the range of $200 billion. I would believe that this will pass in March of 2010, and distributed to the public by September – in time for the 2010 mid-term elections.
Like in any look forward there are many factors that cannot be foretold. Many of these factors are outside of the influence of the nation, many are reactions to events that have nothing to do with us. Thus the following can have an effect on what I have stated above:
Iran (especially their nuclear program)
North Korea (especially firing more missiles)
Afghanistan war (especially American losses)
Iraq (growth of insurgents and internal strife)
Pakistan (especially if America strikes targets in their nation and/or collateral damage to civilians)
African regional conflicts escalate (notably Darfur and others)
Israel (especially if they take pro-active steps against Iran or others)
Gold and/or Crude Oil production
Increases in Piracy
Terrorist attack against Americans
The abovementioned list is not complete, but does equate some of the larger issues facing the nation. I have listed them in order of potential threat and action. But there is no limit to things that might happen, say with China curtailing Rights or Russia becoming more aggressive as it did last year.
Factors that could adversely affect my projections with domestic influences include:
Health Care Reform (passed in a very different form, or completely shut down)
A 2nd Stimulus
Cap & Trade
The end of media support to President Obama
Accelerated job losses and unemployment
The collapse of a major financial institution (I still don’t like CitiGroup)
Public questions about czars and their power (ie. pay, automotive, ect.)
Additional new programs like Cash 4 Clunkers
A national disaster
Increased racial tensions
A new Government plan for mortgage foreclosures
Use of repaid TARP funds
The unused Stimulus money
Renewed questions about illegal aliens (or undocumented workers if you really prefer)
One of the biggest factors that will affect 2010 is the mid-term elections. The Democrat majority will be seeking every means of maintaining their powerbase. This means that several controversial issues, if not addressed and passed by the end of 2009, will not be touched in 2010. It also means that several options that will bolster the image of Democrats will be pushed forward as we approach May 2010 (ie 2nd Stimulus).
Overall I expect that the Obama Stimulus will continue to be a failure, though as we reach June 2010 there will be some improvement in unemployment numbers and will be claimed as due to the Stimulus. This is a false assumption as it appears the recession is following a natural path, if not slightly impeded by the Stimulus.
The stock market will enter a stable period after the 1st quarter drop. It will slowly rise back to current or higher levels by mid-summer 2010 based on improving unemployment numbers. Several companies will beat estimates strongly, and the foreclosure rate will drop by 2%. Housing prices will stabilize. I think that oil prices will hold at the $85 a barrel level into the summer. But the recession will not end until April 2010 – though politicians will proclaim its demise by November 2009.
Inflation will give way to an early trend of hyper-inflation. Credit card debt will again start to be a talked about concern. Car loans will remain sluggish, waiting for another Government program that will arrive before the mid-term election.
There are many factors that can effect the economy. No one person can ever anticipate them all. Likely only a portion of the things I have projected will happen. Still having an objective view is essential to creating plans for various outcomes.
Always discuss changes to your investments with a qualified investment advisor. Check events and information for yourself. And have a plan.
Sen. Schumer responds to Michael Vass
Written by Michael Vass
On August 11, 2009 I sent email and written letters to Senator Gillibrand, Senator Schumer, Representative Hinchey, and President Obama about the proposed Health Care Reform Bill currently in Congress. To date there has been only 1 response, from Senator Charles Schumer.
The entire email from Senator Schumer can be seen in the comments section of the post Asking Sen. Gillibrand, Sen. Schumer, Rep. Hinchey about the Healthcare Bill. This post is a commentary on the response I have received compared to what I asked.
First I want to thank Senator Schumer for responding. On an issue that is so critical to the nation, and so hotly debated, information is critical. I am happy to be able to share his response with all my readers, and the constituents of New York State that Sen. Schumer represents.
As to what I asked Sen. Schumer, I detailed 22 questions that I have found to be among the top questions Americans have about the health Care Reform and how it will affect American lives. Senator Schumer provided me what I believe is a form letter response. That response did not answer even the most simple question I asked,
“Have you personally read and understood all 1000+ pages of the proposed Health Care Reform Bill?”
Worse, the letter sent to me by Sen. Schumer assumes I support the Health Care Reform being proposed, and the public option.
“Thank you for contacting me and expressing your support for increasing access and coverage in health care reform.”
To be clear, I took a neutral stance in my letter asking that he provide answers to questions only.
Sen. Schumer further stated
“I also strongly support the establishment of a public health insurance option which would create a not-for-profit insurance plan, started by the government, which would compete on a level playing field with existing private health insurance plans. Because the public health insurance option would be not-for-profit, it would help to lower premiums and, therefore, exert downward pressure on the premiums of existing insurance plans. This change is pro-consumer because it adds competition to insurance markets, allowing New Yorkers and all Americans one more choice of affordable and comprehensive health insurance.”
It’s a nice pat response. But it does not address the question of why alternatives are not on the table. Like increasing competition by allowing Americans to pick ANY insurance plan in the nation and not just those in their state. Or the question of why any employer would continue to pay increased costs to maintain a healthcare plan (that workers may be happy with) when they can increase funds by dropping healthcare and forcing workers onto the Government plan (which they may not like or want). Or other questions that I directly asked about
“2) Does the current Health Care Reform Bill (HCRB) require any Americans to switch existing coverage to a Government plan? If so how many Americans are estimated to be required to change and where does that estimate come from?
7) Is there a punitive cost to the HCRB? To clarify, it has been stated that those electing not to take the Government plan will incur a 2.5% penalty assessed in their taxes. Is that correct? Is there any additional cost beyond that?
11) Will the American Government have access to private patient information that is currently restricted by law from the Government database?
12) What incentive will private insurers (who employ tens of thousands of Americans) have to compete with a Government plan that is paid for by taxpayers and thus can be run at an annual loss?
15) Will Congress and/or any elected official be mandated to be covered by the exact same Government program as the general public? If not why?19) Why is there a need to pass the HCRB before the 4th quarter? Already we have seen that immediate passage of the Obama Stimulus package created unforeseen problems, as one example. Why is taking more time to review all aspects of the 1100 page Bill, and it’s most likely effects, counter-productive to the American public?
21) How many of the estimated 47 million people (roughly 12% of all Americans) without healthcare will remain without coverage based on the HCRB, if any?”
Notice that not one of my questions, and there are more, is answered. Not one of the issues that Americans across the globe have raised is covered. Not one reason other than Sen. Schumer says it’s a good idea and that he is working hard is provided.
Now I will not make a conclusion about the response of Sen. Schumer, beyond what observations I have already made. I leave that to you my reader.
Is his response to my 22 questions good enough? Is his answer enough of a reason for you to support the Health Care Reform? Are your questions answered?
I do not know if, or when, any other elected official will respond to my 22 questions on Health Care Reform. I do know that when the mid-term elections of 2010 come up, I will make sure that the several hundred thousand voting Americans that read my posts are reminded of the verbatim response (or lack thereof) our elected officials felt was worthy of giving the public.
In addition, I will be sending another letter to Sen. Schumer. In that letter, which I will provide to my readers on this blog, I will remind the Senator that he failed to address a single concern I mentioned. And that as a voting New York State resident, as well as member of the press, I am deserving of a bit more than what seems to be a form letter that fails to provide any direct or indirect information on one of the admittedly most important issues of our day.
Perhaps Sen. Schumer will respond better on the second try. In addition, I will attempt to contact the Senator via phone.
More as I have details.
Results of my 2009 first half economic predictions
Written by Michael Vass
Back in 2008 I made a couple of predictions about how the economy would fare through the 2nd quarter of 2009. That was over a year ago, before the election, before the mortgage crisis really took hold, and before all the bailouts and stimulus packages we now have. How good was I?
The post was Predicting the U.S. economy for 2nd half 2008 and 2009. In that post I stated
“The Fed has been providing banks extra money to ensure their solvency, but not requiring that loan reserves be increased. It’s kind of like stopping a leak in your tub by adding more water. The problem is not getting fixed and may get far worse. And all the panic about the mortgage industry seems to have done nothing but whip up polispeak from political candidates and political parties, each looking to sway voters…
I expect that in total some 7% of homes are in danger of foreclosure this year…
Of course what is likely to happen is that Congress (with it’s 9% approval rating - sure to go lower) will take taxpayer money and bailout homeowners and financial institutions alike. Thus more water will fill the leaky tub. Undoubtedly the current Administration will be blamed (even more than they should) and the war in Iraq (and possibly Afghanistan) will be identified as the cause of all these ills. Which is false…
The outcome will probably be a surge for Senator Obama, who prefers a bailout. This may lead to him being elected and higher taxes to pay for that bailout. And if anyone thinks a bailout of this size will be limited to just the top 1% of the nation they are insane…
1. Confidence in all financial will go lower forcing the need for more liquidity
2. Several institutions will fail - focused mostly on those dealing with housing markets first
6. Home foreclosure will hit 5.5%
7. Bankruptcies will increase by 3%
9. A Democratic Congress will be re-elected
10. Senator Obama will likely be elected
11. Republicans will be blamed
12. Taxes will be increased for all incomes by 3% by 2009
13. Corporate taxes will be increased by 10% early in 2009
14. Inflation will soar unchecked by 3 - 5%
15. Unemployment will grow to 8.5% by December 2008There may be other sources of opportunity but they will be guided by factors including but not limited to:
Iran
Iraq and Afghanistan wars
Inflation
Unemployment
Manufacturing and Industrial layoffs
Retiree growth rates
Healthcare costs
International political stability”
Other than the increases in inflation, corporate and individual tax rates, (which I still expect) and the timeframe of the events everything mentioned above happened roughly as I expected they would. The net result I expected
“As money tightens, gold will be a hedge and prices for all precious metals will soar again. Credit will get severely crunched, and credit card rates will fly. The debt load on the average American will increase from the current $6,000 to $8,500. Most of this increased debt will be from higher energy costs. Thousands of small businesses will shutdown.
As a result of all these things I expect that the Dow Jones will drop to 10,200 by December. If I am correct about Congress and Senator Obama - for the reasons stated - then I further expect a drop to 9,300 during 2009. A significant bear market indeed.”
As of today, the net debt of every American citizen is in excess of $10,000 (just from the $3.5 trillion budget). Gold prices are up. Credit is still crunched. Energy costs are rising, and Cap & Trade will drive it substantially higher. At least thousands of small businesses have folded already, with more expected to go under as the year continues. The Dow Jones Index blew past 9,300 on its way to 6,440 at the bottom.
Overall, looking at everything I expected to happen and the things that have not, plus the parts I got partially right I was roughly 62.5% correct. [30 dead on, 14 dead wrong, and 4 partially correct]
I wish that this was something I could cheer about. My predictions were gloomy and filled with trouble. It was an outlook that continued forward for potentially several years. It predicted that millions would be placed into a position of financial instability and workplace insecurity. I truly would have like to be massively wrong.
But for those that heeded my comments a year ago, some solace was gained. And that at least is a positive. Going forward I will soon be making my predictions for the second half of 2009 and the first 2 quarters of 2010. I cannot promise that all my outlook will be positive – if any of it. But if I remain as consistent as I have for every year I have made a prediction (so far I have never been lower than 62%) at least my readers will be prepared.
Visualizing the Obama Administration so far
Written by Michael Vass
Earlier today I was being yelled at by a significant family member. The source of the debate was President Obama, and Democrats more as a side issue. Because all of my immediate family are Democrats, and I am the lone Republican. More to the point, I am the most Conservative of my family, though the others are more or less so as well.
As you might imagine this made the 2008 election difficult. And the Stimulus package, Cap & Trade, the budget, and now Health Care Reform. In each case my family has difficulty swaying from the side of Democrats, though several freely admit reservations with current policy and the economic plans. They even grudgingly accept that over 70% of the campaign promises made by President Obama have been broken by this point.
To have gotten them that far took a great deal of work. And not all of the family will budge even when faced with direct facts. At least not as long as I state them.
So to help others with this same dilemma I present a bit of work by others that present in clear and easy to understand ways, EXACTLY what President Obama, House Speaker Nancy Pelosi, and Majority Leader Harry Reid have done for the nation in the past 7 months.
Perhaps this visual representation, done by someone completely other than me will help sink it all in.
*** I want to thank 10000pennies (http://politicalmath.wordpress.com) for the videos that you can find on Youtube. I have never met or spoken with him (yet), but I applaud the time well spent to highlight just how bad things are. And how much polispeak has been flying since January 2009.
Oil, healthcare, middle class taxes and the economy
Written by Michael Vass
Over the weekend I was speaking with a real estate lawyer about the economy. My friend is one of the top corporate lawyers in New York City, as well as the nation. They have worked on multi-billion dollar deals for institutions as large as Citigroup as one example.
Our conversation covered what the public might expect to happen in the near future. Neither of us foresaw good news of any signifigance until April of 2010. And that is iffy.
The prime concerns are inflation, the recovery, and the cost of real goods. Right now, the Government is looking forward to passing further laws that will increase the cost of healthcare while reducing quality of care. That is without question.
Right now the Government continues to move slowly on a stimulus plan that was described as “an immediate need to prevent a pending doom”. A stimulus plan that has harmed some with the greatest need, that has inspired creation of temorary jobs that are not full-time nor in many cases even existant for 30 days. Which says nothing of the fact that unemployment has grown far past the promised ceiling the Stimulus was promised to provide - with current expectations of even higher levels, and real unemployment has reached the 12% level in the nation.
But seperate of this has been something we all have heard little about. Oil prices have grown in the last month from $60 to $71 a barrel in less than 1 month. Which is troubling on several levels.
Oil prices are cyclical, and there is a normal drop in prices during the summer. The natural cycle start to ramp up to higher prices as we enter fall. The peak is normally somewhere in the late 4th quarter or early in the first quarter.
But right now we are watching crude oil prices rise with little fanfare in the news. Which is ahead of they normal fall increase. Indicating the potential for a huge increase in prices as the year continues. Adding the burden to families and businesses.
Couple that with the fact that sales for the 4th quarter will be lower due to the number of people continuing to be unemployed. Throw in the potential of higher taxes for businesses if the current healthcare proposal is passed (and the 2.5% tax to individuals that don’t accept the Government plan). And this says nothing of the Democrat Cap&Trade program. A program whose intention is to raise energy prices to force America to use less energy. With side effects of increasing costs of food and housing.
Not inclusive is the cost of food due to the push for green energy. The increase in the ethanol glut alone will push the price of food higher by at least another 2-5%, seperate of any other factor.
This is a recipe for hyper-inflation. Between the growing costs to create goods, and the pressure on food and oil, with a national debt so large (and growing) that the interest alone is greater than the GDP of dozens of nations around the globe combined. Hyper-inflation is unavoidable in my opinion.
My friend saw much of the same factors. They added that there is a huge expectation that the real estate market will take another hit before the end of the year. They expect that the unemployment levels will fuel greater numbers of foreclosures and mortgages in default. This will again attack the confidence of banks and financial institutions.
Add to that instability the probable creation of taxes on the middle class (which will increase foreclosures and bad debt), the continued spending of the Government on new programs (like the Cash for Clunkers program that is seperate from the Stimulus, budget, or currently proposed spending bills), and the unknowns of international actions like those in Afghanistan, Iraq, Iran, and North Korea.
Net net, the outlook is far from rosey or even beneficial.
If the conversations I have had are correct, even in part, and my projections are even half as sound as I believe, then I expect several things to occur.
Unemployment will grow to 11.5% by mid-2010
Interest rates will increase by 5% over the next 2 years, potentially increasing by 10% within 3.
Mortgage foreclosures will increase by another 3%
Mortgages in bad standing will increase by 8%
Food cost will increase by 5% in the next 9 months
A tax on the middle class of at least 3%, likely as high as 12%, will become a reality
The stock market will retract by some 10% and become stagnant
Crude oil prices will reach $90 per barrell with a very probable spike to $115 within a year
The value of the dollar will drop at least 20%
While all of these things may not happen, and/or not to the degree I have described, I expect that the majority will. If I am only half-correct on any and all points, the American economy will be ensured to remain in trouble for another 2 years at best.
I say all this because this is what I see coming. In each of my projections over the past 3 years that I have posted I have never been less than 65% correct. Thus if my readers prepare for what I foresee, if I am incorrect they will be in an advantageous position, and if I am correct they will be well-protected.
But I am open to hear what you think.
Things to remeber about the Obama Stimulus in 2010
Written by Michael Vass
Every now and again I hear politicians justifying the passage of the Obama Stimulus. Which is something that even President Obama has backed far away from. I mean when was the last time you heard the Obama Administration trying to spout its “saved or created jobs” mantra?
The fact that since the Stimulus was passed, the American public has learned how little any politician knew about the actual Bill. That essentially every promise for what the Stimulus would do has been broken. That multiple unforeseen, or rushed past, consequences of the Stimulus appear more and more as time is going by.
But in New York State, I recently read an article trying to justify the Obama Stimulus once again. And they are using the old mantra one more time. Which seems laughable to me.
When I say laughable, it’s not a good thing. I mean this in the sense of how Secretary Clinton was elected 2x, promising Upstate New York the creation of 200,000 jobs – but the reality was a loss of 30,000. Just like there are comments now across the State of how the Stimulus has saved thousands of jobs. A fact that cannot be proven just asserted. And hundreds of jobs have been created.
But a friend recently brought up a great point. This was based on the fact that many cities and towns are doing what is ongoing in Binghamton. They are employing workers to fix roads. Not main streets, but minor secondary streets that really don’t matter. All with Stimulus funds.
My friend noted 2 things
“Funny how the roads that need the work the most are untouched. And you might have noticed none of the bridges have been touched. But worse, none of these jobs will last past the summer if that long.”
The second point is perhaps the most important. In States across the nation, jobs are being created, bolstering the claims of the Democrats and President Obama. But few in the media have asked how long those jobs are existing.
Has the Obama Stimulus really created a job if it only lasts a month through the summer? Have they really helped the economy is people are employed for 35 hours, as is the case in Oregon?
“By their definition, that’s 3 million jobs,” Buckstein said. “Is anybody gonna buy that?”
Of course politicians that voted for the Stimulus will quote these “created” jobs as they bid for re-election. They want to justify their actions to voters. And the media is more than willing to allow them to spout half-truths. But none of that helps the economy.
The nation has spent hundreds of billions that will be repaid in the trillions once taxes and inflation are added. And the best that politicians can give us is that some people, far less than was promised, got an extra week or month of work before losing their jobs. Not exactly a plan I would count on. Yet Americans reading this will be paying for it. For decades.
I want to mention this now, because in October a list will be made that will spout the success of the Obama Stimulus and the jobs “saved or created”. When that comes up I want people to recall what was happening before the media blitz. That created includes less than a week of work, and saved is a number that is about as credible as the transparency President Obama has provided to date.
And when your local Democrat comes to your town asking for your vote in 2010, I want you to ask them 2 questions for them to answer and back up with proof.
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1) How many jobs that lasted more than 90 days were created by the Obama Stimulus they voted for but did not bother to read.
2) Prove that a ‘saved’ job was due to the stimulus and not the sun rising in the East.
Democrats new plan to pay for health care and the budget?
Written by Michael Vass
With the $600 billion health care “plan” passed by Congress – though no details exist to the plan or its implementation, the first order of importance is getting the money. And when you add in the spending spree Congress and the Obama Administration have been on, well the numbers just get stupid.
I’ve already addressed the ridiculous amount of money wasted so far on the $787 billion Obama stimulus (that doesn’t work), the $410 billion for the funding of the Government with 9,000 earmarks, and the $3.5 trillion dollar budget that guarantees to nearly triple the national debt in about 10 years. The question is where is all this money, plus whatever else the Democrats can slip in (like a second stimulus package), going to come from. And I think the first indication has slipped out.
In New Hampshire a man paid for a pack of cigarettes with his Bank of America Visa card. That’s the bank that the Government owns a piece of, regulated with never before seen power by the Treasury Secretary who does not pay his taxes, and the evil habit of smoking that Democrats would prefer you not be able to do in even your own home (at least in some towns in California). Thus he was slapped down with a charge for his purchase of $23,148,855,308,184,500 (twenty-three quadrillion, one hundred forty-eight trillion, eight hundred fifty-five billion, three hundred eight million, one hundred eighty-four thousand, five hundred dollars).
It’s an ingenious plan. Attacking all the evils perceived by Democrats – smoking, gas, cars, banking, having enough money to have a credit card, and using money to frivolously pay for something that neither goes to the poor nor is under the control of the Government – they will force the evildoers of this nation to pay for everything.
Now some might say this was a bank error. Some might say it was a credit card screw up. Bank of America and Visa are blaming each other. But I think it was a subtle attempt to see if the public will pay stupid amounts of money for anything.
Under the seeming logic of Democrats today, the rich have hordes of money that they greedily won’t use outside of a swimming pool even Scrooge McDuck would envy. There has to be some way to get that money. And since they own the banks, auto industry, and soon newspapers – not to mention thinking about becoming landlords over private homes – well why not try it.
$23 quadrillion may be a bit over zealous, but wait til you see your bill for heating and electric after Cap & Trade passes. They are going to get the money. One way or another.
Democrats admit they know nothing about economics
Written by Michael Vass
Yes, I made that headline. Not that this is anything new to my readers. I have been stating that the Democrat-led Congress had about as much financial knowhow as a wet noodle since Speaker Nancy Pelosi started hinting at a $50 billion stimulus package before the election.
Well the numbers balloned out of control immediately after President Obama was elected. And based in no small part on his mantra of change, Congressional Democrats passed the bloated social reform package that is the Obama Stimulus. I should add that at the time Democrats, notably the President, insisted that we had to approve this packed or the sky would fall and a depression far worse than that of the 1920’s would descend upon the nation.
This was a dire message indeed. Democrats blamed President Bush, Republicans, Wall Street, and everyone else they did not like for the woes of the economy. They promised that the stimulus package would revitalize the nation. That millions of jobs would be saved or created. That the recession would end before the year ended, if only we passed the Stimulus package.
And it was passed. 99% of all the votes came from Democrats; about the same proportion of legislators that actually read most (no one read all) of the proposed Stimulus Bill.
But as we know now, the Obama Stimulus really had nothing to do with jobs or the economy. It had lots of social reform and redistibution of wealth. It took lots of time to distribute the money (most of it being spent anything but immediately as we were promised), does virtually nothing for the economy, and has created a string of problems for some of the most needy of Americans. All of which I have discussed over the past 5 months or so.
Yet, just a month and a half after President Obama and Democrats alluded to the Stimulus as saving jobs and showing signs of turning around the economy, we now see them admitting it was all just polkispeak. Not that it is a straight-forward admission. It too is veiled in polispeak.
“The truth is, we and everyone else misread the economy.” - Vice President Biden
Misread? How is that possible. We were told the economy was about to collapse and doom was on the horizon. We were promised in no uncertain terms that the only hope for the economy was President Obama and the Stimulus package. And that the price would be the future indebtedness of our children and grand-children.
Since the Stimulus has been passed, even as the Obama Administration proffered the idea of success, the unemployment rate has risen dramatically. The economy has sagged. More people are in danger of losing homes and jobs than ever before. And the most optimistic reports from the Obama economic team now forecast this situation to continue to get worse for perhaps another year before any real improvement occurs.
Thus calls for another Stimulus package are starting to circulate. Much in the manner that Speaker Nancy Pelosi prepared the public for what became the collosal $787 billion waste. Just comments right now, stating that another stimulus is not an outright bad idea. Setting the stage to run polls and see if the President’s popularity can support yet another plan to spend money that the public does not have, nor will earn in the next decade.
Now I said this was an admission of failure. And I believe it is, though shrouded in polispeak. Because to say that another stimulus is needed means that the intital Democrat passed plan isn’t doing the job. If you fix a flat tire you don’t need to go back and fix it again.
Yet where are the inquisition styled questions that the major news media loved to level at Republicans and President Bush? Where are the cries that the public wealth has been raided as if barbarians had just ransacked the nation. Why is no one mentioning that our grand-children are about to be stripped of their potential future?
Democrats have failed the nation. They passed a Bill that they did not read, that was filled with loopholes that peanalized the most in need, that fails to do what it was supposed to be created for. Which has nothing to do with Republicans or past Presidential Administrations. This all happened under their control and their promises of redemtioon from an economic apocalypse they envisioned.
Do we need another stimulus plan? If Democrats and the Obama Administration had any clue about finances, the promises they made, or the actual state of the economy the answer would be an emphatic no. But this is a group of legislators that prefer to grandstand on blaming someone else for what they did. A group of Congressional lawmakers that achieved the least possible with the most press coverage of them assailing everyone else for their failures. This is a Democrat plurality in Government that is the equivalent of a dim bulb that someone forgot to turn on.
I suggest this. Instead of taking even more of our money for even more social change and Congressional pet projects that truely help few if any of the public that needs help; why not revamp the stimulus plan that was passed? Since the need is immediate, yet 85% or so of the money has not been spent yet, why not re-allocate where the money will be used.
In all honesty, if every American was given roughly $3000 to use as they needed the economy would truely have a boost. And it would still be a discount to the amount of money that has been allocated as a Stimulus so far. At least then, when we had to pay back the full loan amount (with interest that everyone forgets to talk about) we might have something to show for it.
But politicians are not know for their honesty, or concern for promises made. Even less so when they are in a legislative control situation. 2010 and 2012 cannot come fast enough.
The imaginary and real Obama Administration
Written by Michael Vass
Well I’m still looking for the jobs that the Obama Administration claimed to have “saved or created” since the Democrat-led Congress passed the $787 billion Economic Stimulus Plan early this year. You do recall that plan right?
Yes, President Obama was on a bandwagon then. Telling the nation how well his economic policies have been helping the average American. A soapbox that he jumped off of just in time to switch to trying to pass his healthcare plan. You might wonder why he has switched gears. The answer is the following data just out.
Does that sound like a plan that is working? Does it in any way sound like the average worker is more secure now or less so? Are you willing to spend more money in this economic environment or less?
In fact, these numbers place my observation about how the Obama Stimulus money is hurting some families right now as severely under-estimated.
Keep in mind that IF you are RECEIVING a paycheck you are getting the stimulus money right now. No check from the Government, but an extra $25 off of your taxes. So the stimulus is in effect right now. And you can see how this is improving the nation. With forecasts from even the most lenient economists stating that the unemployment levels will hit at least 10%, perhaps as high as 11%, going into 2010. So it will only get worse for many people across the nation, not better.
But President Obama PROMISED that his plans for the economy and budget would save jobs – some 3 million of them. He also promised that immediate action upon passing the Stimulus package – which won’t mostly go into effect until the 2nd quarter or so of 2010. Lightning fast.
I bring all this up because President Obama has hustled the nation from one economic crisis to another, with Congress cheerleading the whole way. There was the $410 billion to keep the Government funded, and the $3.5 trillion for his budget - all separate and not including the $787 billion stimulus package. These included over 9,000 earmarks – something President Obama PROMISED to remove if elected. This included the situation that PREVENTS families from getting food stamps to feed their families. This includes social changes like the Government now owning 2 auto companies (costing over $50 billion dollars and losing around 100,000 jobs conservatively), and the desire for the Government to dictate employee pay and hiring. Not to mention the ability of the Government to violate contract law, invalidate bondholder rights, and potentially to take over any private business it wishes.
But now the President has moved on to healthcare. Again we are being told that this is an immediate need. That this is our sole option. That this will help the nation. At a cost conservatively around $1.5 trillion, an amount greater than all the taxes collected by the Government (around $1.3 trillion a year). None of this counts the interest we must pay on all the borrowed money.
Plus there is the promise that President Obama seems to be on track for.
But wait, there is more. Don’t forget that there is also the Cap and Trade idea of the Obama Administration floating around. A plan that promises to increase the cost of gas and energy. A plan that will FORCE the public to conserve energy because of the higher prices. And by the way, some in Congress (House Speaker Nancy Pelosi for one) will benefit hugely and directly because of this.
And this says nothing of Representative Barney Frank’s attempt to create another housing crisis in the future by lowering the requirements for mortgages again – this time in the Condo market. A brilliant move by the person directly responsible for telling the nation, on national television, that anyone warning the public about problems at Fannie Mae and Freddie Mac was lying for political gain – 2 weeks before they failed under his direct oversight.
So to sum up, looking at the Obama Presidency to date, where are the benefits? For all the calls of change and improvement, where are they? What is better now than before? I bet they are with those jobs that have been “saved or created” that no one can find.
Obama Stimulus costs or keeps $38 million from 344,000 Americans
Written by Michael Vass
Interesting headline isn’t it? The best part is that I can back it up. At least as well as the Obama Administration can back up the jobs they have “created or saved” with the Stimulus package. In fact I can provide better proof. The worst part though is that the money is being lost by the poor and the unemployed.
The problem stems from the very $787 billion stimulus package that the Democrat-led Congress and President Obama shoved down the throats of the American public. In the rush to capitalize on the popularity of the President, with the cries of absolute depression emanating from every Liberal politician and pundit in the background, the stimulus package was passed without ANYONE reading what was in the 400 pages. Thus an extra $25 a week was ensured for 4 months to every American that GETS a paycheck.
But that’s also the problem. Because the extra $100 a month was never factored into any other Government program. Which means that if you happen to be getting unemployment as 6.8 million Americans (and more each month) are, and you happen to need food stamps as well to feed say your family, you may have a problem.
This is happening right now. According to the Associated Press (hardly a conservative arm of the media) there are cases in Iowa and Georgia, and other States, already. People are finding out that because of the extra $25 they cannot decline, calculations made including this money is placing Americans over the Government limits for food stamps and other forms of aid. The range of the loss is unknown (and likely to remain so), but the AP provided an example – costing a family $300 in food stamps they now cannot receive. The average for food stamps as stated in the AP article is $111.
So using a bit of math that President Obama and his entire Administration cannot do for his claim of “creating or saving” jobs with the stimulus package I will now present you with how much Democrats have cost the poor and unemployed in this nation. Conservatively.
Since there are no less than 6.8 million people on unemployment right now, I will take 5% of that total as people potentially being affected by the extra money. That comes to 344,000. A really small number of people. It’s 1/10th the number of people in the nation. It’s about the number of people that lost their jobs in March alone.
Now taking the average provided by the AP on food stamps, and not the actual example provided that is about 3x as high, and you get 344,000 x $111 = $38,184,000. That’s $38 million being lost or prevented from helping people feed their families in this nation right now. And that figure is monthly. So to be really honest, for the life of the stimulus package (at least the part that the public actually gets as a stimulus) the poorest and most needy in this nation will lose of be prevented from having $152,736,000 in food.
I bet Democrats across the nation are feeling really proud now. I can see Speaker Nancy Pelosi and Senator Harry Reid giddy in Congress. Rep. Barney Frank must be searching the political map for someone else to blame this oversight on. And I can imagine that the Obama Administration is taping Vice President Biden’s mouth shut lest he reveal how much is being taken from the poor INSTEAD of the rich as Democrats promised would happen.
Yes, there is nothing like an unfettered Democrat-led Congress to rush serious and profoundly important legislation through all the hoops, passed in votes without a single concern for the American people or a glance at the actual wording and thus effects.
So I say again, the stimulus plan was idiocy. It was a bad idea created by people who think the Government is smarter than the average person. Yet they prove consistently that there is virtually no part of the Government, or its programs, they can’t screw up. And the bonus is they are growing the size of the Government so they can do even more.
Only another year and 5 more months before we can elect a new Congress. 3 years and 5 months till we can see if President Obama gets re-elected. Don’t you just feel confident.
Stimulus plan in Binghamton, New York
Written by Michael Vass
Recently I read about a part of the $787 billion Stimulus Plan President Obama has spent, that affects my town of Binghamton, New York. The funds that will be coming to the city is just over $850,000. Not a huge sum, but in a small town like Binghamton it’s a lot.
This money is part of the Neighborhood Stabilization Program. Obviously this is intended to improve neighborhoods across the nation. In Binghamton, the local press did a story of how 8 buildings are to be condemned. In addition some unnamed amount of funds are to be used to pay for apartment housing. Sounds good yes?
Not exactly. First consider this. The only housing project I am aware of going on in downtown Binghamton is student housing. And that was paid for before the Stimulus Plan. So where is the money going?
Another question is how much does it cost to tear down a building? If we look at just the 8 buildings that were detailed in the newpaper then that means around $100,000 per building. The average home in Binghamton does not cost that much. In fact you can easily buy a home in the range of $60,000 – which is including the increase in housing prices that has been going on for the last 6 months at least. So it would seem there is some waste there.
Separate of that is the question of what impact removing these houses has. Of the buildings identified, the neighborhoods are some of the worst in Binghamton. The homes on the same streets are in horrendous condition. The people there are lucky if they can be considered part of the local middle class (not the national average which is way higher). So fixing or removing 1 building is suddenly going to improve the neighborhood?
And this is in the face of the fact that every time there is a strong rain (which is frequent here) several areas have flooding, in part due to the poor drainage system, which cause traffic and health issues. It is in the face of the fact that 1 in 3 (if not more) storefronts in Downtown Binghamton is empty – and has been for the last 5 years I have lived here. In fact there are dozens of empty buildings in the downtown area right now. Not just the storefront, but the entire 4 or more stories of building. Which includes space that easily can be or is apartment space.
What stabilizes a community is jobs. Not short-term projects like tearing down a building, but a full-time consistent job. It gives the people in the area the funds to improve their homes, and buy furniture. It creates a feeling of anything but despair and disdain. It provides opportunity for a better life of a family.
What do apartments in a vacuous downtown mean? Nothing. Beyond students that only live in the city seasonally and would like to be closer to the bars, there is no benefit to citizens. There are no new jobs that are nearby for students, or citizens, to work at. There are no grocery stores close by. Nothing is centralized beyond the bars. Oh and 4 banks plus the sports arena. The framework for a thriving downtown it is not.
I’m not saying that the condemned buildings don’t need to be torn down. They do. But the limitiations on how the money from the Stimulus Package can be spent seem to be more waste than benefit. Because the decreasing numbers of citizens in Binghamton will not reverse itself with 8 more abandoned buildings no longer standing. Adding more aparment space in a town with ample cheap housing does not improve the standard of living. And none of this employs anyone (except the bars downtown).
It just makes me wonder where the stimulus is in the Stimulus Plan? Because the window dressing in Binghamton does nothing but anger me. I’m not paying a mortgage on top of my actual mortgage to watch a building be torn down and politicians claim that this rights the ills of the entire town. I’m just not that stupid.
How is the stimulus money being spent in your town or city? Is it actually creating real jobs? Is it improving the lives of people around you? Or are you finding that your $120,000 (approximately your share of future earnings for the entire stimulus plan including interest) is just going nowhere fast?
I really would like to know.
Investing vs. Trading - the Alcoa example – the follow up
Written by Michael Vass
Back on the 14th of April I decided to make an example of the position I own in Alcoa to demonstrate the difference between trading and owning. At the time I stated
Based on the examplew above I would have sold the AA position for $9.25 from my cost basis of $5.55. The 32% total takes into account the cost of the trade and the taxes on the profit. Because of the 30 day rule the position could not be bought back until May 14th. Which would give me a repurchase price of $8.74 as of the close.
The difference is .51 cents or roughly 6% less than the sale price of April. Thus if we add in the 5% cost to repurchase the stock, the net added gain to me is 1%, granting a total gain of 33%.
While that gain is very respecatble, especially in a down market, having just held the stock my return to date is 70% at the time of this post (AA is currently $9.43). Had I made the sale for the trade and repurchased the position my current gain would be 3% (including the cost to repurchase the stock giving me a net cost of $9.18).
So in comparison, holding the stock would have me currently with a 70% gain, minus tax and sale cost becoming a net 40% gain. Trading the stock, with a repurchase, gives me a net 36% gain. While the difference may not sound large, it is taking net profit out of my pocket.
This also does not factor in the fact that if I had not repurchased the stock I would be out 6% of profit. If I purchased the stock one day later I would have had to buyback the position at $9.03, which including commission would plce me at a loss on the current price and drop my profit to 31%. And if for any reason I was unable to purchase the stock until today, I would be losing even more of the initial profit in the stock (a repurchase cost of roughly $9.90 net or a loss of 7% dropping the profit to 25%).
All of this ignores the fact that I had the option, if I held the stock, to have sold it at $10.50 – a 90% gain or a net of 60% as of the close May 6th. Not counting the fact that I recall the stock having an intraday high of $11. That is a home run in a bad market and horrible ecomonic environment.
Still the stock has not hit my first target of $15. So I have no intention of selling yet.
But the question is if trading a stock is better than buying and holding. In my opinion, buy and hold is always better if you have sound fundemental reasons for purhasing the stock in the first place. As this example shows, the net gain is better under all circumstances, by holding the position. Only luck could allow a better net return, potentially.
This is of course a theoretical example. Actual returns and strategies may result in differing returns. Objectives of your portfolio may be substantially different than those posed in this example. Any portoflio decision should always be discussed with professional.
But at least you may have a bit more insight to the question of Investing versus trading. I hope this has helped.
Chrysler - the bad bet of President Obama
Written by Michael Vass
You know what’s really sad about the economy? What really angers me about the bailouts? The way that the Obama Administration, Congress, and the Bush Administration have all wasted our money.
Yes even the anointed President Barack Obama is complicit in the waste of money that has been the bailouts and stimulus package. While President Bush started this waterfall of taxpayer money, and Congress has failed in every respect on these matters, President Obama has jumped in with both feet on making this a costly mistake since day 1.
Chrysler has now declared bankruptcy. They told America they would back in November of 2008 when they didn’t get the full bailout they requested, along with the rest of the U.S. automakers. Rather than allowing the automakers to do the inevitable, the Government has thrown away our money in amounts that are near incomprehensible. Chrysler alone is responsible for some $10 billion of our money that will now not only fail to send our kids to school, or buy new homes, or build new businesses, but has effectively vaporized.
Of course there will be a cheer from Democrats since the American Government now owns 8% of Chrysler. What a bargain. They paid more than top dollar for a miniscule percentage of ownership, that currently is worthless. But don’t worry, the Government can always buy more with your taxes and printing as much money as it wants. Your kid didn’t need college anyway.
This is not a joke. I’m being serious. President Obama announced to the nation, along with Speaker Nancy Pelosi and Harry Reid, that the only way to save American jobs and fend off a depression was to keep the automakers out of bankruptcy. That was a big part of the $1.29 trillion that President Obama spent in the first 100 days. Yet bankruptcy is what has happened.
Can you imagine $10 billion dollars? Does it make sense? Imagine a stack of dollar bills that reaches to the moon and back, with lots of money left over. That’s how much money just disappeared.
Had the Democrat leadership just said no, and allowed the car makers to fail there would be that much more money available to help people survive this outcome. There would be that much money ready to help new smaller businesses to pick up the pieces of the failed companies and create new jobs and innovation. But the Government knows better than you or I. The Government can manage everything better - though facts to the contrary abound.
Think about this. If the Government is wrong about the billions it gave Chrysler, which has been proven by the bankruptcy, what else is it wrong about? That a depression will not be the outcome of this action? That they wasted more of our money on bad ideas than AIG, the automakers, and most of the major banks combined? That the total of the Congress and the President have less knowledge and acumen in the world of business than your local paperboy?
Each of the political parties is culpable in this mess. They all have played their part in creating this fiasco over the past two decades at least. But I must say that all the polispeak of President Obama stands out the most. Because the buck stops at the President, and his assurances are the ones that have failed the biggest right now.
I am pissed off because of in my forced ownership of Chrysler (via the bailouts using my cash like yours), I gain nothing. Had I made the choice of what to do with my money, I would have kept it in my pocket. Or gone out to a small dinner and helped the economy. Or added it to my investments (though future taxes on those investments would surely be more than the some of money I started with). I might even had given it to charity (though the tax on that gift might have been more than my charitable gift now that President Obama raised the taxes on that too).
Simply put, the President and the Democrat-led Congress made a bad bet. If they were a publicly run corporation I’d have shorted their stock long ago. But instead of their stock price going down, national unemployment is continuing to rise, my tax bill is increasing, I’m paying a mortgage of other Americans on top of my own mortgage, and I get to fear for my ability to maintain just what I have. Because they made their bets with my money, and yours.
This will no doubt be spun to blame everyone but the current Administration and Congress. There will be no end to the flowery views of future green cars and some abundant productivity in the future. But the fact staring us all in the face is that all those dreams would have been just as true, and likely, without an extra $10 billion in debt for the nation.