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Archive for February, 2009

A Billion Here, A Billion There

Posted by hanson807 on February 10, 2009

pretty soon it adds up to real money. Let’s just start by looking at the White House’s agenda for the economy off of the white houses webpage. Every single item listed under economy is government spending. Look at his health care. Not only is it spending on stupid stuff, he wants you to spend money on generic drugs and not reinvest in pharmacies in our country, and on pg 140 he proposes 1.5 trillion to the NIH for research. One has to ask, if research is important, why not buy drugs from the pharmacuetical companies instead of the generics? After all the generics are cheap because the pharmacuetical companies spent billions of dollars developing and testing the drugs, and the generics don’t have too. So they can ride on the backs of the big pharmacueticals, at least until they can’t afford to do research anymore. Then, we lose. We are going to cough out 550 million on page 128 for Indian health centers, that should stimulate the economy. On page 148 a new cabinet post is created “Office of the National Coordinator For Health” and we give 2 billion to start that office. Three billion will go to “Prevention and Wellness Fund”, thats on page 153. But hey, 335 million to prevent AIDS and other STD’s, that just smacks of economic stimulation.

Education gets a boost in Subtitle C – Education. The department of education will get 13 billion. Its right there on page 163. But on page 167, they toss in another 13.6 billion for special ed. Then on 169 they toss in another 15.6 billion for financial aid. 14 billion will come on page 171 for modernization and school repair, followed by 6 billion to more modernization. That is 7% for education. Of course if you go back to Title XIII State Fiscal Stabilization Plan, another 79.9 billion is to be controlled by the department of Education. That makes it 17%. And we know the Department of Education is good with money, they are so good, they don’t bother to keep books. And apparentlly, they don’t really have a standard for cutting checks to folks. Not sure where that fits into economic stimulus, but I don’t think it really matters to those who want to pass the bill. I guess on page 182 do they do make a point that if iron or steel is used it has to be made in the USA. Smoot-Haley, no lesson learned. Also on page 183 they want to make sure at least 25% is spent rehabing the school to green standards. Nice.

Okay, just a bit of Irony. On page 204, I can’t make up material this good, Social Security Administration Limitation on Administrative Expenses will get 900 million dollars. What is it going to be used for you ask, because maybe it sounds reasonable(okay, not really). Seriously, I didn’t make this up. $400,000,000 for the construction and associated costs to establish a new National Computer Center, which may include lease or purchase of real property: Provided, That the construction plan and site selection for such center shall be subject to review and approval by the Office of Management and Budget: Provided further, That the Committees on Appropriations of the House of Representatives and the Senate shall be notified 15 days in advance of the lease or purchase of such site: Provided further, That such center shall continue to be a government operated facility; and (2) $500,000,000 for processing disability and retirement workloads: Provided, That up to $40,000,000 may be used by the Commissioner of Social Security for health information technology research and activities to facilitate the adoption of electronic medical records in disability claims, including the transfer of funds to ‘‘Supplemental Security Income Program’’ to carry out activities under section 1110 of the Social Security Act. Honest to god, do they read this crap after they write it?

At least he didn’t take Stiglitz’s advice and did include tax cuts. Stiglitz is an unreptant socialist who believes it is the job of the government to control the common people. He even states it in his office when he talks about modifying behavior with handouts. Of course we will have real over sight. On page 16: SEC. 1222. COMPOSITION OF BOARD. (a) MEMBERSHIP.—The Board shall be composed of seven members as follows: (1) The Chief Performance Officer of the President, who shall chair the Board. (2) Six members designated by the President from the inspectors general and deputy secretaries of the Departments of Education, Energy, Health and Human Services, Transportation, and other Federal departments and agencies to which funds are made available in this Act. (b) TERMS.—Each member of the Board shall serve for a term to be determined by the President. So an entire group of people to provide over sight, not one with business experience or even a business background, and mostly lacking any ethics or morals. Perfect.

The question is, will the 5 year plan work because we are the United States or will it fail as it did in the USSR, China and the rest of the countries it was tried in? I know, you could ask the question: Why do 5 year plans fail? but that would be so petty. Why not ask what would it take to make one work? You see if you ask why the 5 year plans fail, you end up with an answer that is just obvious. Government can’t buy a good economy. It would lead you to a universal truth about money, it comes from business and it is only printed by government. Government can print all the money it wants, but only business will give that money worth. Not one thing in this bill benefits business or the people of the United States. It is all about big government. If you think the government can run the economy and save you, you’ll love this bill. If you actually read history and understand that the government generally damages the economy, you are waiting to see just how much damage this bill will inflict.

Posted in Economic | Leave a Comment »

Anticipating Unemployment

Posted by hanson807 on February 3, 2009

My estimation of the coming summer appears to be rosey compared to what is actually happening currently. If you have been paying attention to the headlines, you will note that Liz Claiborne is cutting 725 jobs, Macy’s is cutting 7000 jobs, Boeing is cutting 10000 jobs, IBM is cutting 2800 jobs, Sprint is cutting 8000 jobs, Motorola is cutting 4000 jobs, AT&T, DuPont and Viacom announced 15,000 will be cut collectively, Kodak has announced 4500 cuts, AMD will cut 1100 jobs, Starbucks will layoff a 1000, Pfizer-Wyeth plan to cut 8000 jobs, New York state is planning to layoff 3100 state workers, UAL will cut 1000 salaried positions, Harley-Davidson is cutting 1100. Others can be added but this is a list of about 60,000 jobs that are going to get cut.

Along with those cuts you should anticipate other companies and small shops to begin to close. These were their customers and they are about to be unemployed. Small craft and mom and pop stores will be closing later this summer as well. Most of the big retail stores will be cutting their inventories and over seas orders will be dropping significantly. With these drops you will see plants being shuttered. The closing of plants and reduced orders will require less resources, so you will see mining and processing plants reduce output and some cases close all together. This will drop the consumption of oil and we should see a down turn in oil use so the $40 a barrel price is going to be here for a while. Not sure I would say it is going to drop, but I wouldn’t be surprised by a $30 a barrel price by mid July.

New developing energy markets are going to be hit hard. The wind farms we have will continue to run of course, but new ones will be put on hold or canceled. The tax credits associated with these projects are going to lose value and make the project unprofitable.

Unfortunately, research and development will also decline as companies try and increase the bottom line. This is exactly backwards of what I think they should do. I beleive if they increased R&D, because the cash is going away anyway, they may be able to develop a way out of this mess. You will see more people returning to college and university. My guess is you will see more people going into science fields and health care and less in business and education. The way out is through technology and new markets.

The stimulus package we should be seeing should be an increase in R&D, a new space mission and goal of making a huge moon base. The budget should cut all road and highway maintenance. The social security and medicare program benefits have never been tied to the market, the socialists believe this is the way to go. However, the amount of money that they get is tied to employment. As unemployment climbs if we don’t cut all social programs across the board we are going to just get hammered. It will increase the length of time it takes to recover.

State employees and other government employees had better start to understand where the money is coming from. The 60,000 job cuts I mentioned early pay their salary and they are gone, so they will be taking a pay cut or a job cut. I realize they won’t like it, but I’m sure the 60,000 thousand who lost their jobs didn’t like it either.

California is in serious trouble. I don’t think they understand just how bad off California is. California is going to go bankrupt this year.

Posted in Economic | 2 Comments »