The Financial Bailout Fiasco

by Dakota Helphenstine
Catastrophe Book
I’ve been reading a new book called Catastrophe by Dick Morris and Eileen McGann......I winced at its claim that Obama & Co. are turning “freedom into socialism”, but I decided to take a peek anyway. Broad, shock value statements like that aren’t my thing. Also, you should also know that I reject 99% of conspiracy theories. Maybe that makes me boring, but I think the real world is exciting enough. As far as this socialism claim, I would like to examine it in a later article, but Dick Morris is right about it in the sense that Obama seems enamored with the European model of democracy, which is known to have socialist components.............
Here are some other categories and how much money they received:
Aid to state & local governments: $58B (with a B)
Education: Around $30B
Energy: $41B
Health care: $18B
Science and technology: $13B
Transportation and Infrastructure: $98B
Here are some main points we can glean from Morris’ “panel of experts”:
1. As I already touched on, bills like these are hastily constructed and there is not enough time to read them to really make a responsible, accountable decision. I realize Congress does this a lot with other omnibus bills—I am not ignorant of it—but I have never agreed with that either.
2. One thing I did not really touch on is that these bills can be full of pork barrel legislation. This is true, and I know there was some in the $787 billion stimulus bill, given some of the really random things in it. But this is not as big a factor for me, because pork is in a lot of bills. It’s not native to bailouts of stimulus bills.
3. There is a risk that all the money spent to invest certain job fields will just create lateral movement of already employed persons from their previous job to one of the new stimulus jobs. It was supposed to create new jobs that people who were unemployed could fill. While it is true that someone could just enter the job someone else who took a stimulus job had left open, it’s still not really working as intended.
4. These bills create a lot of debt for an uncertain return on investment.
5. Some of the spending is long-term, which means it will not help us right now, and it may initiate once the economy has already recovered, which could actually be harmful.
6. I have to quote this one, because it is worded so well. Arnold King of the Mercatus Center Financial Markets Working Group said this: “There is a risk that government will absorb a permanently higher share of the GDP. Policymakers will be reluctant to cut public spending for fear of causing a downturn. Moreover, it will be difficult politically to cut public spending (Morris, 33).”
7. Instead of actually adding more money into the economy, stimulus bills just shuffle money around. They redirect it from one use to another. By “adding more money” I don’t mean “printing more money”, which causes inflation. The stimulus money comes from government savings that would have been used for something else.
see http://www.examiner.com/x-15978-Curry-County-Conservative-Examiner
http://www.dickmorris.com/blog/2009/06/30/obama-breaks-read-my-lips-prom...
Browse the book Catastrophe