This is not a happy chart:
That’s the growth in the money supply. Note the monetary expansion of the past year.
record deficits, failing banks, benchmark lending rates at near-zero, protectionist trade measures, tax increases, a helpless treasury… and just for good measure, wild monetary expansion.
I’m quoting Tad DeHaven from Cato in full.
Page 14 of the President’s FY2010 budget “blueprint” contains a section called “Fiscal Irresponsibility” that deserves scrutiny:
“Another manifestation of irresponsibility is the large budget deficits we are inheriting. These deficits, over time, will harm economic growth and impose burdens on our children and grandchildren.”
True.
“Between 2000 and 2008, real Government outlays increased at a 3.6 percent annual average rate, three times the 1.2 percent annual average rate between 1992 and 2000…Furthermore, the amount of debt held by the public has nearly doubled to $6.4 trillion from 2001 to 2008. We are now living with the fallout of this deep fiscal irresponsibility.”
True.
“Unfortunately, we are also inheriting the worst economic crisis since the Great Depression—which will force us to increase deficit spending temporarily as we try to jumpstart economic growth.”
Time-out. The administration accurately states that federal spending and debt have increased at a detrimental pace this decade. Then it says we’re in the worst economic crisis since the Great Depression.
And the solution to the economic downturn caused in part by too much spending and debt is to increase deficit spending and further run up the national debt? By the administration’s own logic, shouldn’t we be experiencing economic growth with all the deficit spending it “inherited?”
A lot of people are pointing this out. You can’t blame Bush for profligate and irresponsible spending when you qudruple the national deficit in your first four weeks. OK, you can blame Bush, and you should blame Bush and his bleating, craven Republican colleagues for eviscerating the poltical organization that should have resisted this policy disaster.
“Congress is supposed to be the lead dog…” Yes, but who holds the whip?
Biden to lead the way on the recovery! Yay! Biden is… sma… well, you see, he’s really cohere… we trus… he’s got white hair! (What’s the number of that website again?)
The comments about the war on terror and the war in Afghanistan are excellent.
Ed Driscoll, Rendezvous with Scarcity:
But hey! Obama will unveil a budget that will reduce the deficit in half in four years. You know, that’s the deficit that he doubled in four weeks.
So, the stimulus plan will “save or create” jobs and the budget will “double or halve.” It’s a wild, woolly, double-speak world!
These are my favorites:
“If your family earns less than $250,000 a year,” he said, “you will not see your taxes increased a single dime. I repeat: not one single dime.” Unless you count taxes like gas taxes, sales taxes, excise taxes, or taxes on miles driven.
And there’s this:
(Note: I’m moving the order of the last couple posts around because I really liked my Friend Me post and think that the photos of bat soup are really icky.)
Rick Santelli is seething:
“How many of you people want to pay for your neighbor’s mortgage?”
“Cuba used to have mansions and a decent economy… now they’re driving ‘54 Chevy’s.”
We’ll see considerably more of this kind of rage in the coming months and years. Far from ushering in a post-partisan era of political change, the Obama administration has undertaken a highly partisan spending spree that will spur the opposition to mobilize. The moral outrage on display in the video won’t be easily dissipated. Just as the decline in combat casualties and the general improvement in the situation in Iraq did nothing to dispel the anger over the Iraq war, slowly improving economic conditions will do nothing to dispel this outrage.
A couple of quotes from the Austrian Economists,
Sober assessment suggests that, politically, Keynesianism may represent a substantial disease, one that can, over the long run, prove fatal for a functioning democracy. — James Buchanan and Richard Wagner, Democracy in Deficit
The body of economic knowledge is an essential element in the structure of human civilization; it is the foundation upon which modern industrialism and all the moral, intellectual, technological, and therapeutical achievements of the last centuries have been built. It rests with men whether they will make the proper use of the rich tresure with which this knowledge provides them or whether they will leave it unused. But if they fail to take the best advantage of it and disregard its teachings and warnings, they will not annul economics; they will stamp out society and the human race. — Ludwig von Mises, Human Action
Update:
White house press sec. Gibbs responded to Santelli:
Gibbs is the spokesman for the Whitehouse, and he’s deliberately misleading about the mortgage plan.
If the lender agrees to reduce the monthly payment to 38% of a borrower’s monthly income, the government will pay half of the additional cost of lowering the payment to 31% of the borrower’s income. …
The administration also supports changing federal bankruptcy law so that judges can unilaterally reduce the mortgage debt owed by borrowers in bankruptcy proceedings. — LA Times
Santelli’s response–the viscera of his outrage–is the idea that responsible homeowners will be subsidizing irresponsible homeowners. Gibbs wants to say that the plan will be limited to borrowers who have been “responsible.” But participating in the plan in the first place is the part that sparks the outrage.
Owners who do not or can not participate in the bailout will be subsidizing the owners who participate. That’s a core truth of the administration’s plan, and no dancing around that truth is possible. If that weren’t a part of the plan, then the plan would be entirely and utterly meaningless.
Gibbs waved a fact sheet on the plan. Here are some quotes from that fact sheet:
…offer assistance to as many as 7 to 9 million homeowners making a good-faith effort to stay current on their mortgage payments …
What constitutes a “good-faith effort?” A good-faith effort isn’t the same as actually staying current (otherwise, why qualify it?) so what is it? 90% current? 50% current? What?
Focusing on Homeowners At Risk: Anyone with high combined mortgage debt compared to income or who is “underwater” (with a combined mortgage balance higher than the current market value of his house) may be eligible for a loan modification. This initiative will also include borrowers who show other indications of being at risk of default. …
Delinquency will not be a requirement for eligibility.
Delinquency isn’t a requirement, but it’s not a barrier either.
This program will bring together lenders, servicers, borrowers, and the government, so that all stakeholders share in the cost of ensuring that responsible homeowners can afford their monthly mortgage
That’s govt. speak for “the taxpayers will subsidize mortgages.”
To provide an extra incentive for borrowers to keep paying on time under the modified loan, the initiative will provide a monthly balance reduction payment that goes straight towards reducing the principal balance on the mortgage loan.
Mr. Gibbs, I read the fact sheet and you sir, are a liar.
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