At the end of last year, the total paper money and IOUs of the entire globe totaled more than $600 trillion. Gold, at its 2008 year-end price of $869.75 an ounce, equals just $831 billion — less than 1% of the total outstanding paper in the world.
It’s “delusional” to expect the U.S. fiscal stimulus plan crafted by President Barack Obama to “jump start” the economy, Stephen Roach, Morgan Stanley Asia’s chairman, told a panel in Davos today.
Will confidence be restored? Will something that appears so unfocused and misguided give Americans that cozy feeling that the government is there for them; everything will be okay? From where I sit, the details of the stimulus package seem ridiculous. If such a thing is truly necessary to drag us out of recession and inevitable depression, this ill-constructed piece of work can’t possibly be the answer.
-Jack Crooks - Money & Markets
'Special Report' Panel on Republican Opposition to Obama Stimulus Package
KRAUTHAMMER: I think Mort's suggestion that Obama clean it up and take out the junk in it points to the original error in this -- he let it out of his control.
Had it been written in the White House, we might have had a clean bill. Instead, it was written by the House, by Pelosi, and it is one of the ugliest ever produced by an American legislature.
It has got pork. It is a 40-year wish list. It has all the stuff that you heard about. It's novel length -- a late Norman Mailer novel long. You throw a dart at it and you will have on any page six items which are outrageous.
Now, what's ironic about all this is that Obama ran as the man who would redo our politics, who would eliminate the lobbying and the special interests and the earmarks.
This is the largest earmark bill - earmark, but without stealth, just out in the open -- of special interests, favors, parochial interests, in American history. And it is under his aegis.
I think it contradicts his idea of the new politics, but he's stuck with it. And all he can do now is strip out the stuff that's in it. But I think it's impossible. It's -- more than half of it that is all of this small stuff.
RESEARCH: Stimulus Bill Full of Pork and Payoffs
The Congressional Budget Office (CBO) recently found that the cost of the Pelosi-Reid stimulus package now exceeds $1.1 trillion. CBO also estimated that only 7 percent of infrastructure money would make its way into the economy by the end of the year and only 38 percent would be spent by the end of the 2010 fiscal year. Senator Jeff Session's (R-Ala.) office estimates the actual number going to tangible road and bridge construction is just a little more than 3 percent.
Where is this money going to? A not exhaustive look at the 1,588 page legislation, H.R. 1, "The American Recovery & Reinvestment Act of 2009" shows the bill is more payoffs and pork then stimulus. Many thanks to the website readthestimulus.org and its participating organizations.
* $600 Million To Buy New Cars For Government Workers (Page 89). These cars would be "green" friendly cars - however very few gas pumps have the right gas to run these cars. The Federal government already spends $3.5 billion a year.
* $150 billion in new federal spending, a vast two-year investment that would more than double the Department of Education's current budget. The proposed emergency expenditures on nearly every realm of education, including school renovation, special education, Head Start and grants to needy college students" Sam Dillon, "Stimulus Plan Would Provide Flood of Aid to Education," New York Times. January 27, 2009. NOTE: Private and religious schools are excluded.
Representative Henry Waxman (D-Calif.) inserted in the original bill billions of dollars for family planning groups, including the abortion giant, Planned Parenthood. Pressure and public exposure from Congressional Republicans forced the Democrats to remove such funding from this bill. However the bill still provides billions in reforming the health care system and working towards nationalized health care - with little to no debate.
* $3 Billion for Prevention & Wellness Programs, Including $335 million for STD Education and Prevention - Recent government expenditures in this area include a transgender beauty pageant in San Francisco that advertised available HIV testing and an event called "Got Love? - Flirt/Date/Score" that taught participants how "to flirt with greater finesse."
* $4.19 billion open to ACORN. The Pelosi-Reid bill makes groups like ACORN eligible for a $4.19 billion pot of money for "neighborhood stabilization activities."
* $54 billion will go to federal programs that the Office of Management and Budget or the Government Accountability Office have already criticized as "ineffective" or unable to pass basic financial audits.
* $227 million for oversight of the pork barrel spending in the stimulus.
Discretion is given to governors and Mayors for how to spend a large chunk of the money. The U.S. Conference of Mayors recently sent Congress a $96.6 billion wish list of "shovel-ready" projects which now could be funded by the stimulus. These projects include: "$1 million for annual sewer rehabilitation in Casper, WY; $6.1 million for corporate hangars, parking lots, and a business apron at the Fayetteville, AR airport; 28 projects with the term "stadium" in them; and 117 projects mentioning landscaping and/or beautification efforts. The taxpayers should be most teed off at the 20 golf courses included in the list."
Are you angry yet? I only cut and pasted a couple things from the list. Do you you see ANYTHING here that is going to stimulate the economy? This is outrageous. This stimulus bill is an Obamanation Abomination. If this pile of pork is allowed to pass into law this country will truly be F**cked! We can all grab our ankles and kiss our asses goodbye. The President should himself be ashamed for running around the media declaring this bill must be passed to "save the nation". LOOOOOOOOOOOOOOOOOOOOL! America! WAKE UP!
Good Politics Is Often Bad Economics - Why the Stimulus Plan Won't Work
Even a cursory look at the bill being rushed through the Congress reveals its Frankenstein-type nature. It is a wish list for unrelated spending programs that, on their own, would not be considered reasonable. Even the parts that make some sense, like the much-touted infrastructure spending, are small potatoes in the bill. Instead we get millions for the National Endowment for the Arts. The Department of Education gets $66 billion for . . . well, we aren’t sure, but how can you oppose to education? Amtrak gets a billion so that it can continue to lose money each year. Congress even provides more millions to help those poor souls who will flounder from a lack of analog television transmission. Some of the items are laughable – Speaker of the House Pelosi defending contraception subsidies as stimulus on the weekend new shows was a sure sign of some of the insanity behind this bill. Even traditional liberals can’t stand the stench. Former CBO head and Clinton budget guru Alice Rivlin suggests separating the defendable stimulus pieces from the pork and the other things that have magically appeared without the usual substantive review. According to some analysts only 5 to 10 percent of the total bill is actually related to stimulus spending. Even worse, the “buy-American” requirements will likely result in WTO sanctions and encourage retaliation by our trading partners, hurting U.S. companies and workers in the export market – one of the few remaining shining lights in our current economy. Just ask Caterpillar (CAT).
Pork-laden spending frenzy
The American people are hurting and our economy is in a recession. Congress is right to take action to stimulate the economy, but the American people deserve better than a pork-laden spending frenzy with very little money going to the people who need it most. Any such economic stimulus package must be timely, temporary and targeted.
Unfortunately, congressional Democratic leaders in the U.S. House put forth an economic plan based on increased deficit spending for agenda-driven earmarks. The bill will not stimulate the economy in the near term and may hurt the economy in the long run, because the deficit for the next two years is already projected to exceed $2 trillion. If deficit spending was an effective stimulus, the economy would already be on the verge of a rebound.
Economic recovery is invariably achieved by the economy itself, but Washington can accelerate that process. The best way to do that is to improve the incentives that drive economic activity. Lower marginal tax rates will stimulate the economy because they create incentives for individuals and businesses to work, invest, take risks and seize opportunities.
The American people deserve a better proposal than the wasteful spending approach envisioned under this bill.
-U.S. Rep. Mike Coffman, Colorado's 6th Congressional District
"Bad bank" may be put on hold: report
WASHINGTON (Reuters) - Policy-makers have yet to reach a consensus on how a U.S. government-run bad bank would work and the idea may not move forward, CNBC television reported on Friday, citing unnamed sources.
"The government-run bad bank idea that was being floated ... apparently has hit a snag, it might not happen," a CNBC anchor said recapping an earlier report. "Charlie (Gasparino) says the government has no consensus right now on how the bad bank would work, the issue is pricing."
"Making that thing work right now from what I understand is proving to be very difficult," CNBC's Gasparino said in his report.
I knew I could find some good news. This "bad bank" idea is a BAD IDEA. This stimulus package is a bad idea. The governments response to this entire financial meltdown has been one bad idea after another. Particularly in light of the fact that this entire mess lies at the governments feet. Are they serious about cleaning this mess up? Apparently not yet. Their delusion that they, the government, can fix things remains intact. And as long as the sleeping American public continues to have faith in Uncle Sam, this delusion will persist. We'll know the government is serious about ending this when talk surfaces of disbanding the US Federal Reserve. Because unless and until the Fed is abolished, America will sink ever deeper into the abyss. ...And that's a pretty safe bet.
Gold is getting whacked this morning. Nothing Shocking there. With overhead resistance clearly evident around 930/35 and the seasonality charts turning bearish as February arrives, this was expected. Silver of course remains in Gold's shadow, and follows it wherever it goes. Gold support comes in at 902 / 895 /880 . Silver Support comes in at 12.15 / 12.03 / 11.78