Tuesday, March 03, 2009

Real Stimulus

The more I read about Obama and his spending, the more hopeless I am about the future of economic growth in this country. I had a real estate class last semester and one guest speaker said he would work through the first part of the year until he reached the 70% tax bracket. Once he got there, he would sit around all day and play cards.

He said, "I am not going to work for a 30 cent dollar." If Obama keeps up his spending, we will be back there soon. I will go fishing before I work for a 50 cent dollar. Economic growth will only come when the most productive have a reason to work their tails off all year. And I don't want to be lectured by Joe Biden that it's my patriotic duty to pay more taxes.

The biggest problem with Obama's spending is that it will never go away. Bureaucracy is the only thing humans have ever created that borders in immortality.

The government's appetite for our money is insatiable. The worst parts of Obama's spending is that most will be spent after the recession is over and that none of it will stimulate job growth.

It has become clear that the cheapest and most temporary way to stimulate the economy would have been to collect no FICA taxes this year.

If there were no FICA withholdings from any American worker this year, they would automatically stimulate the economy. They would save, pay off debt, pay for their mortgages, and go out and buy new stuff.

I have already had over $1500 of my money withheld. Which means my employer has paid another $1500 to the federal government. That $3000 is most of a month of my salary. If construction slows down too much in Texas, that is the difference between keeping my job and getting fired.

Jonah Goldberg has this analogy for the "savings" in Obama's dishonest budget:
Try this with your boss sometime. First, go buy a Mercedes on the company credit card. Then tell him that you saved money because you were planning on buying a Lear Jet — two years after your mandatory retirement age. Then ask him for an attaboy, or even a raise. See what he says. I dare you.
Read Goldberg's whole article.


Mark said...

ridiculous... the subject, not the article... It's appalling.

WhiteEyebrows said...

ha ha! the best quote from this is the bureaucracy immortality thing. it's so true!

there's only two ways out of this: kick start spending (the gov't is the only one with deep enough pockets to do that now) or drastically revalue assets. if we did the latter, almost every bank in america would fail.

in other news, i had dinner the other night with someone who works for the FDIC. he's got LOTS of work these days... when God closes a door, he always opens a window... :)

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cougartex said...


The government is the only single payer with deep enough pockets, but that is the problem. I don't want one payer. I want 150,000,000 individual wage earners out there spending money. 70% of the economy is private individuals spending money. Isn't it better to give more power to the 70% than the 30%?

Having a FICA holiday for a year is the fastest and cheapest way to kick start the economy. I would get more than $700 a month to spend, save, or invest.

And the other thing is that there is tons of cash out there in the economy. No one is willing to spend it until the government has one plan and sticks to it.

As long as there is massive uncertainty about what Geitner and Obama will do (it's not like they even know what they are doing - every time either one opens their mouth about the economy the Dow Jones loses 300 points) everyone with cash is going to sit on it.

Just imagine if people making more money than me are behind on their mortgage and they get to keep more of their wages. They will catch up on their mortgage. Those who have no debt will be free to save or invest as they see fit.

That is the only fair and just way to do this. Otherwise, the wise stewards are bailing out the unwise steward and we just dig a deeper hole.

cougartex said...

Check this out:


This is a chart showing the projected deficits of Obama. Each of his years is more expensive than the most expensive of Bush's years.