I read an editorial this morning that really put a number to why I think this whole stimulus concept we are getting from our elected officials is crap… and much worse the whole “New New Deal” thing Obama is pushing.

From IBDeditorials.com:

When a private employer offers a job and the offer is accepted, the welfare of both the employer and employee is improved. The employer has a new worker who will make the company more productive and the worker has a job to meet his needs.

But when a government job is filled, a third party is involved, and the welfare of that party — the taxpayers who pay the public employee’s salary — is harmed and the economy ultimately damaged.

It’s hard to make a reasonable argument that the country needs 22 million public sector employees. With a total population of 304 million, that’s one government worker for every 14 Americans.

The full editorial is really worth the read, but that is the part I wanted to point out.  For every 14 Americans there is 1 government worker.  There are more workers in government than in manufacturing!  So wouldn’t real economic stimulus be in reducing the size of our government?  This would reduce the cost of operating along with freeing up resources that would actually contribute to the economy in general.

Sadly, I see the reverse being far more likely in our new administration.  (Bush really didn’t have any redeeming qualities in the smaller government area either - so certainly not a partisan argument there.)

It has been projected that less than half of the stimulus money Obama is planning on “pumping into the economy” will be spent in the next two years.  So my question is: Then what is the freaking point???  If it is going to be too late to be effective, then is it really needed?  The answer is no, but with a big government “spend our way out of our problems” looming, I am guessing it will happen regardless of whether or not it is a good idea.  (See Rob’s post on the issue.)

The whole point is that the government is increasing its drain on the economy - not stimulating it.  Bailouts, stimulus packages, etc are making an exploding national debt worse.  In this drives inflation and not only will it not really help in the short run, will quite possibly make things much worse in the long run.

Why we don’t need more stimulus bills - Olorinpc.com

A bailout of the auto industry will save a few jobs for a little while.  OK, it will save a lot of jobs for a little while.  But in the long run, a bailout reduces everyone’s standard of living.  It’s interference in the free market, and causes a misallocation of resources.  It’s a misallocation because the market has already given the company the thumbs-down, in that the company has not been able to deliver a product profitably at a price that the market is willing to pay.  A bailout says to the market: “You’re wrong.  This company deserves to stay in business.”

We all lose because the resources have been re-allocated inefficiently by force, against what we, the customers, have already said we want.  We instead get more of the failing business’s products and less of the succeeding business’s products, and have to pay for this situation to boot.

Apparently our local state government misses the concept of being fiscally conservative just as much as the federal government does.  Rob from SayAnythingBlog has a great recap of Hoeven’s tax plan for the next fiscal session.  (Every 2 years in ND.)  This is a 26% increase in government spending - on the heels of a 24% increase in spending during the last session!

Hoeven’s budget requests $3.11 billion in state general fund spending from July 1, 2009, until June 30, 2011, an increase of 26.4 percent. North Dakota’s general fund is financed mostly by taxes on sales, income, energy, corporations, tobacco and gambling. Total spending, which includes federal funds, state gasoline tax collections, and other revenues, would rise 19 percent, to $7.71 billion.

I agree with Rob 100% on this part - [Hoeven is talking about] “one time spending.”  Which is baloney.  If you increase spending on an agency that is on going spending. Ummmm duh.  It is in government agencies best interest to perpetuate their own existence.  They will never voluntarily cut their own budgets.  So increasing them is not “short term.”  Whoever thinks so is smoking some really good crack.

Rob goes on to cover other points in his article, so very much worth reading.  The only other part I really can contribute is the fact that part of this budget is raiding the oil tax trust fund.  (To the tune of $562 million)  With oil prices going down, that fund will not be replenished quite as quickly.  So does draining it really make sense?  That is exactly why I was so disappointed the protection measure on the ballot this year was defeated.  It would have prevented this exact situation.

View Rob’s original post here.

Cory over at Boing Boing has been doing some research on the costs associated with all of these bailouts.
In doing the research for the “Bailout Nation” book, I needed a way to put the dollar amounts into proper historical perspective.

If we add in the Citi bailout, the total cost now exceeds $4.6165 trillion dollars.

People have a hard time conceptualizing very large numbers, so let’s give this some context. The current Credit Crisis bailout is now the largest outlay In American history.

Crunching the inflation adjusted numbers, we find the bailout has cost more than all of these big budget government expenditures – combined:

• Marshall Plan: Cost: $12.7 billion, Inflation Adjusted Cost: $115.3 billion
• Louisiana Purchase: Cost: $15 million, Inflation Adjusted Cost: $217 billion
• Race to the Moon: Cost: $36.4 billion, Inflation Adjusted Cost: $237 billion
• S&L Crisis: Cost: $153 billion, Inflation Adjusted Cost: $256 billion
• Korean War: Cost: $54 billion, Inflation Adjusted Cost: $454 billion
• The New Deal: Cost: $32 billion (Est), Inflation Adjusted Cost: $500 billion (Est)
• Invasion of Iraq: Cost: $551b, Inflation Adjusted Cost: $597 billion
• Vietnam War: Cost: $111 billion, Inflation Adjusted Cost: $698 billion
• NASA: Cost: $416.7 billion, Inflation Adjusted Cost: $851.2 billion

TOTAL: $3.92 trillion

Does anyone else thinking this is starting to get insane?  Bailing everything out will reduce us to a broke welfare nation.  It seems to have gotten to the point where the numbers have lost all meaning.  It has gotten so large that a trillion just doesn’t mean anything anymore.  Perhaps if more people look at the above numbers, some meaning will be brought back to it.  This is also why we should say no to more bailouts.  We have to draw a line somewhere.

Well word has come down.  Any sort of bailout for the automakers is on hold at the moment.

“Until they show us the plan, we cannot show them the money,” House Speaker Nancy Pelosi, D-Calif., said at a hastily called news conference in the Capitol. “Hopefully in another week or two we can see a plan.” - USA Today

That is the part that scares me.  By telling them they must have plan, you are implying that we are just going to hand them the money when we do.  When is this crap going to stop?  Business’s run themselves into the ground, and instead of failing and learning from it like any normal business, we hand them billions and say “do better.”  Where the hell is the incentive for them to do better?

Rob over at Sayanything blog had an excelent post on this issue just yesterday.  Basically Mitt Romney says to let Detriot go backrupt, for a lot of the reasons I mentioned above.

That extra burden is estimated to be more than $2,000 per car. Think what that means: Ford, for example, needs to cut $2,000 worth of features and quality out of its Taurus to compete with Toyota’s Avalon. Of course the Avalon feels like a better product — it has $2,000 more put into it. Considering this disadvantage, Detroit has done a remarkable job of designing and engineering its cars. But if this cost penalty persists, any bailout will only delay the inevitable.

Second, management as is must go. New faces should be recruited from unrelated industries — from companies widely respected for excellence in marketing, innovation, creativity and labor relations.

Will it be bad for all of us in the short term?  I am sure it will.  Jobs will be lost, companies will have to restructure, etc.  Will it force the automakers to kick it into gear and actually make their companies profitable?  Yes.  Bailouts are incentive to continuing the bad behavior that got them there in the first place.  Hopefully our elected leadership will catch onto that.  (Especially since the 700 billion bailout plan isn’t going like they thought it would… though it is going like a few of us feared it would.)

In a follow up to my other post on Obama looking promising on the tech front, this came across my desk today.

Basically the plan seems to be to have weekly YouTube addresses.  I actually like this plan.  I am a little leery of it in light of the Twitter Feed not having been updated since the election.  However, if it is done, perhaps that will be the nudge people need to keep more informed on what their government is doing.  Sure it will probably be partly PR, but that is to be expected.  Yet, if it allows people to stay more connected with what is going on in Washington, perhaps it will also equate to people taking more ownership and responsibility in their government as well.

It is still a government in transition, so we are going to have to wait and see how it pans out in the long term.  I think we can expect though other parties and politicians to finally start taking note on what technology is capable of.  Perhaps even start making use of it.

I recently read a Star Tribune article about how Obama built this huge communications network and that is one of the reasons he won the Presidency.  In essence I agree with him.  I disagree with a lot of his policies and liberal viewpoints, but this is one area where I think Washington needs improvement.  Understand and use of technology.  Obama has shown them it can be done.  How many big time politicians do you know that even know what Twitter is, much less use it?

I really hope this is a start of a trend.  Yet Obama’s staffers have proven they don’t quite have a firm grasp of the technology.  Once you put something on a website and it is there long enough to be cached, it is permanent.  There is no “undo.”  Especially in the case of the President Elect.

A few - “Computers can do that???” moments:

Mandatory Community Service policy disappears

Assault weapons ban disappears as well

That being said, I look forward to seeing how are next President uses technology to connect with his constituents.  Can he keep going what he had during the campaign?  Seeing as the Twitter feed hasn’t been updated a single time since the election I am not sure.  However, I am willing to reserve judgment on that one as the guy (or staffer) probably deserves a break.  The people will be watching from both sides of the fence.

Take a look at the below chart:

It is from this article.

Currently 33% of Americans have zero, *zero*, tax liability.  This is the 33% that McCain and Obama continue to talk about helping.  With their tax plans… that is projected to increase to 43% and 44% respectively.  What does that mean?  It means an increasing percentage of our countries population take no part in funding the government they *expect* to receive services from.

On the linked editorial:
By one estimate, the federal government already spends more than $20,000 per household in direct services or services that are considered part of the “general good” of the nation (like national defense).
That’s a big number. A married couple filing jointly wouldn’t pay $20,000 in income taxes until they earned about $110,000 in taxable income — that’s income after deductions.

Why do I find this so objectionable to increase and accelerate that trend?  Well for starters I believe in a smaller government and less taxes.  It is better to let people screw up with their own money then give it to a government that has proven it will screw it up.  The second part is simply this:  The American Dream.

I prefer the classic definition:

“The American Dream is that dream of a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement. It is a difficult dream for the European upper classes to interpret adequately, and too many of us ourselves have grown weary and mistrustful of it. It is not a dream of motor cars and high wages merely, but a dream of social order in which each man and each woman shall be able to attain to the fullest stature of which they are innately capable, and be recognized by others for what they are, regardless of the fortuitous circumstances of birth or position.”

That is simply part of the American Dream is the ability to achieve.  By punishing the people who do manage to achieve more and more, reduces the incentive for people to do so.  Furthermore the wealthy, businesses, and corporations are the ones who employ us till we manage to get ahead!  By increasing their tax burden, you reduce their available capitol.  In doing so, to keep the business profitable, a change will have to be made somewhere.  The easiest way to do that is to reduce the headcount and make everyone else cover.  So in a vicious cycle you have just made it worse for the same people you were trying to help.

Yet it continues towards the trend of less people funding a growing government?  Why is that?  As Rob from SayAnythingBlog points out to us that “an increasingly sizable majority pays no taxes.”  If people get the services but have no contribution into funding it, they are less concerned with how well those funds are spent.  (Bailouts and pork added to bills are a great example of this.)  When did we surrender to mob mentality and tyranny of the majority?

Well we haven’t yet, but we are getting there.  Is this an objection to taxes?  Hell no.  Some taxation is necessary to operate a government.  As a volunteer firefighter in my community, I know quite well where our operating budget comes from.  Quite frankly I believe I will benefit from the McCain/Obama tax proposals.  However I also believe in planning for the future and dreaming.  I doubt I will ever be rich, but I would like to think someday I can have my own business that takes care of my family and sets my wife and myself up for retirement.

“Of liberty I would say that, in the whole plenitude of its extent, it is unobstructed action according to our will. But rightful liberty is unobstructed action according to our will within limits drawn around us by the equal rights of others. I do not add ‘within the limits of the law,’ because law is often but the tyrant’s will, and always so when it violates the right of an individual.” ~ Thomas Jefferson

“A society that will trade a little liberty for a little order will lose both, and deserve neither” ~ Thomas Jefferson

(View other Thomas Jefferson quotes here)

Think about those for a moment.  By punishing the rich (we know the bar for being considered rich is just going to get lower and lower), you are not only tarnishing the American Dream for yourself, but tarnishing it for your fellow Americans.  Groupthink *is tyranny* people – it the antithesis of Liberty and the core values America was founded on. Our founding fathers would be ashamed.
Cross-posted on Olorinpc.com