As part of the American Recovery and Reinvestment Act of 2009, between January 1 and November 30, 2009, qualified first-time home buyers are eligible for tax credits of 10% of the home’s purchase price, with an $8,000 limit, through the filing of an income tax return.
According to the Treasury Department, through August approximately 314,000 buyers had bought into the program at an estimated $154-million in credits. The National Association of Home Builders (NAHB) and the National Association of Realtors (NAR) anticipate final figures will show over 1.5 millions homes sold, at a total cost of about $15 billion. The NAR estimates that only 350,000 homes, or 23%, will be directly attributed to the program incentives, claiming others would have made the purchase regardless.
With time running out, on June 12, Senator Johnny Isakson (R-Georgia) introduced legislation to not only extend the tax credits but up the ante to $15,000 to any homebuyer, plus eliminate income caps of $75,000 for individuals/$150,000 for couples. It has bipartisan support, including Senators Chris Dodd (D-CT), Joe Lieberman (ID-CT) and Senator Bob Corker (R-Tennessee).
From the words of Sen. Isakson, “In the mid-1970’s when America faced a similar housing crisis following a period of easy credit and loose underwriting that flooded the market with new construction and a three-year supply of vacant homes, Congress responded by passing a $2,000 ($8,000 in 2009 dollars) tax credit for anyone purchasing a new home for their principal residence. The results from that tax credit were clear and swift as home values stabilized, housing inventory dropped and the market recovered.”
The projected cost, adding to national debt, would be $50 to $100 billion. It’s a relatively small price to pay considering the hundreds of billion of dollars that were chucked out to stave off the failings of large scale banking institutions. The little guy deserves a good slice of the stimulus pie. Unlike the big, bad banks, consumers would be less likely to hoard their moneys.
I’m all for it. This could be the deciding factor in following through on an anticipated move to where there are “42,145 square miles of scenic beauty” in the Smoky Mountains. Think of me as a future right-wing, gun-totin’ Second Amendment Patriot of The Volunteer State. Seriously.
As reported by the U.S. Census Bureau, there were 18.7 million unsold homes in the U.S. at the end of the second quarter, a slight increase from the 18.6 million homes a year earlier. Representing a full 14% of the total 130.8 million homes in the U.S., at the current sales rate it would take 9.4 months to sell those homes and get them off the market.
With Alt-A and Option ARM mortgages due to balloon over the next three years, this recession is set to inch ever closer to something worse than a recession. It’s too late to cushion the blowout from these toxic loans that, at over $2.75-trillion, are more than double the mess caused from sub-prime loans.
Steps must be taken to keep people in their homes and move others into vacant homes. Going forward, lax lending practices must be avoided through strong regulatory oversight. The slight of information from applicants must be tamped by prohibiting further use of an automated loan process that avoided the review of income and assets.
Since the glut of unsold homes puts in doubt a surge of new-home construction anytime in the foreseeable future, incentives would give realtors, our masters of property investments, something to cheer about in the meantime, snuggly sandwiched between buyers and sellers and giving everyone that warm, fuzzy feeling of home sweet home.
Hopefully a temporary setback to a growing population, America has largely lost its means of being a mobile society. People are stuck in the humdrums of doing too much of nothing, driven to levels of complacency that may have long-lasting affects on its place in the cutting edges of the new world order.
There are plenty of positive prospects for the redistribution of the population and the limited wealth that some have managed to cling on to. Many realize they must downsize, thus having extra cash that will bolster local businesses as they make the best of their home investments with remodeling, upgrades and purchases of new home furnishings.
A number of little sparks across the nation would light a brighter future for small and mid-size businesses; a stimulating lifeline toward a prosperous tomorrow – job creation. As people begin to once again earn wages, the momentum will help grow the economy sooner than any other government program imaginable.
A move from one region to another necessitates a wardrobe change; southerners going north will need seasonal apparel, northerners heading south would shed layers of winter cloths for shorts, swim suits, year-round tank tops, sandals, beach towels and suntan lotions as they lounge beneath their hammocks and large beach umbrellas.
What would this hold for Florida? Between the springs of 2008 and 2009 the state population declined by 58,294 – no doubt, bad news. But, as some leave, others would see this as an opportunity to head south, especially retirees who have tired weeks upon weeks of cold and freezing temperatures under gloomy, overcast skies.
According to a report issued by a 2008 CDC report, in 2005 the life expectancy for those over the age of 65 suggests retirees could spend another 18 years (16 male, 19 female) in the Sunshine State making new friends in the vast number of retirement communities.
The best of all bets is that first-time home buyers who already have the funds for a down payment will finally own a piece of the American dream and take hundreds of thousands of unoccupied homes off the housing market. To affectively move large numbers of people into new homes, giving incentives to all prospective homebuyers, new and existing alike, is a necessity. As a compromise new homebuyers could be offered the full $15,000 incentive package while existing homeowners given the offering of $8,000.
I’m all for it. This could be the deciding factor in following through on an anticipated move to where there are “42,145 square miles of scenic beauty” in the Smoky Mountains. Think of me as a future right-wing, gun-totin’ Second Amendment Patriot of The Volunteer State. Seriously.
Showing posts with label stimulus package. Show all posts
Showing posts with label stimulus package. Show all posts
Thursday, September 17, 2009
Sunday, August 30, 2009
A Stroll Down Wall Street
As if we’re allowed to believe otherwise, Wall Street’s continued surge is all but sure to continue to rise toward a closing bell figure of 10,000. And there are plenty of examples of news to keep those faint of pocketbook from being fearful of losing their skivvies after their pre-recession wealth has already been stripped of their greenbacks.
The second quarter 1% decline in the Gross Domestic Profit was better than expected by one-half a percent point, a vast improvement over data released by the Commerce Department for the previous two quarters that showed declines of 6.4% January-March and 5.4% October-December 2008.
Looking ahead, an anticipated 2% increase in GDP for the period July-September is based on the assumed affects from the $787B stimulus plan and the Cash for Clunkers program. If this fails to materialize, expect to hear the words “market correction” as financial news commentators continue to grin in front of the camera to no one’s joy but for their own paychecks.
A hopeful sign for economic recovery was the announcement that only 247,000 jobs were lost in July, the smallest figure in nearly a year. It could have been worse and may still spike higher on the chart of the unemployed, but the outlook on the Street is a view of a clear road ahead to a higher Dow Jones Industrial Average. Consumer spending declined a mere 1.2% during the same period. Not too dismal, huh?
A positive light in employment figures show that state and local governments have added 110,000 jobs since the recession began, along with their above free market salaries and overly generous benefits. But Jon Shure, deputy director of states’ fiscal policies of the Center on Budget and Policy Priorities, is realistic in saying, “Crunch time is still to come for the states.” What a killjoy!
In May, the savings rate among Americans reached the highest level since 1993 at 6.9%, keeping nearly $770B from circulating through the economy, the highest rate since 1959 when statistics were first gathered. Not only that, in April borrowers slowed down their buying power with a 16.5% decline in credit card purchases, or 16.5B on $1 trillion of total debt. This is no way to spur an economy that thrives on ever-increasing consumer debt.
According to international lender ING Direct, European Union members have cut back on using plastic money by 10-20% while 46% Americans say they have refrained from adding to credit card debt. Meanwhile, with high unemployment, foreclosure figures, tight credit and reduced consumer spending….
The Conference Board, an independent research group, released information last week that the Consumer Confidence Index (CCI) rose from 47.4 in July to 54.1 in August, quite a bit better than the expected 47.9 that had been forecast. Still, the index is well below 90, the minimum level indicative of a healthy economy. There’s a lot of boom to go before the economy is deemed revived.
As a reference, the significance of historical data of the CCI, it stood at 109.4 (August 1996); 82.2 (October 2001, after 9-11); 110.3 (January 2007).
The Expectations Index, taken from the same sampling of 5,000 households and measures a 6-month view on economic conditions, rose from 63.4 in July to 73.5 in August.
On the flipside of consumer view of economic recovery, the Reuters/University of Michigan Consumer Sentiment Survey, also taken of 5,000 participants, decreased from 66.00 to 63.2 from July to August although economists surveyed had expected an increase to 69 so, although the news isn’t good, it’s not as bad as feared, so it’s actually good news. Right?
The benchmark for the Confidence Survey is 1985; the Reuters/UM Sentiment Survey is referenced to 1966 with both having a base figure of 100.
As if to confuse matters, a third sampling of 1,000 participants conducted by telephone, the ABC News Consumer Comfort Survey reflected a rating of –45 (yes, that’s a negative sign on a scale of –100 to +100). Putting this in perspective, the 23-year average is –12. Only 8% rated the economy in a positive light, maintaining a single-digit trend for 43 of the past 46 weeks. By all measures, not very comforting.
And let’s not ignore the 77% decline of funds held by the FDIC from $45.2B a year ago. The current $10.4B balance would be considerably, and alarmingly, less but for the $9.1B in higher deposit fees garnered from banks in the first quarter. Not to worry, your banking account balances are still covered up to $250,000. The FDIC can draw on its no-limit credit line with the Treasury Department as it did in 1993.
Sales of new one-family homes increased 9.6% in July (plus or minus 13.4%) over June figures but 13.4% below July 2008 figures (plus or 12.9%). The plus or minus figures leave a don’t add up to anything but confusion and doubtful significance.
On a truly positive note, August figures show an increase of 4.9% for durable goods over July, and upward swing for three out of the past four months.
Who’s to say our economic future is anything other than what is portrayed by the wooly bullies on Wall Street? Anybody?
The second quarter 1% decline in the Gross Domestic Profit was better than expected by one-half a percent point, a vast improvement over data released by the Commerce Department for the previous two quarters that showed declines of 6.4% January-March and 5.4% October-December 2008.
Looking ahead, an anticipated 2% increase in GDP for the period July-September is based on the assumed affects from the $787B stimulus plan and the Cash for Clunkers program. If this fails to materialize, expect to hear the words “market correction” as financial news commentators continue to grin in front of the camera to no one’s joy but for their own paychecks.
A hopeful sign for economic recovery was the announcement that only 247,000 jobs were lost in July, the smallest figure in nearly a year. It could have been worse and may still spike higher on the chart of the unemployed, but the outlook on the Street is a view of a clear road ahead to a higher Dow Jones Industrial Average. Consumer spending declined a mere 1.2% during the same period. Not too dismal, huh?
A positive light in employment figures show that state and local governments have added 110,000 jobs since the recession began, along with their above free market salaries and overly generous benefits. But Jon Shure, deputy director of states’ fiscal policies of the Center on Budget and Policy Priorities, is realistic in saying, “Crunch time is still to come for the states.” What a killjoy!
In May, the savings rate among Americans reached the highest level since 1993 at 6.9%, keeping nearly $770B from circulating through the economy, the highest rate since 1959 when statistics were first gathered. Not only that, in April borrowers slowed down their buying power with a 16.5% decline in credit card purchases, or 16.5B on $1 trillion of total debt. This is no way to spur an economy that thrives on ever-increasing consumer debt.
According to international lender ING Direct, European Union members have cut back on using plastic money by 10-20% while 46% Americans say they have refrained from adding to credit card debt. Meanwhile, with high unemployment, foreclosure figures, tight credit and reduced consumer spending….
The Conference Board, an independent research group, released information last week that the Consumer Confidence Index (CCI) rose from 47.4 in July to 54.1 in August, quite a bit better than the expected 47.9 that had been forecast. Still, the index is well below 90, the minimum level indicative of a healthy economy. There’s a lot of boom to go before the economy is deemed revived.
As a reference, the significance of historical data of the CCI, it stood at 109.4 (August 1996); 82.2 (October 2001, after 9-11); 110.3 (January 2007).
The Expectations Index, taken from the same sampling of 5,000 households and measures a 6-month view on economic conditions, rose from 63.4 in July to 73.5 in August.
On the flipside of consumer view of economic recovery, the Reuters/University of Michigan Consumer Sentiment Survey, also taken of 5,000 participants, decreased from 66.00 to 63.2 from July to August although economists surveyed had expected an increase to 69 so, although the news isn’t good, it’s not as bad as feared, so it’s actually good news. Right?
The benchmark for the Confidence Survey is 1985; the Reuters/UM Sentiment Survey is referenced to 1966 with both having a base figure of 100.
As if to confuse matters, a third sampling of 1,000 participants conducted by telephone, the ABC News Consumer Comfort Survey reflected a rating of –45 (yes, that’s a negative sign on a scale of –100 to +100). Putting this in perspective, the 23-year average is –12. Only 8% rated the economy in a positive light, maintaining a single-digit trend for 43 of the past 46 weeks. By all measures, not very comforting.
And let’s not ignore the 77% decline of funds held by the FDIC from $45.2B a year ago. The current $10.4B balance would be considerably, and alarmingly, less but for the $9.1B in higher deposit fees garnered from banks in the first quarter. Not to worry, your banking account balances are still covered up to $250,000. The FDIC can draw on its no-limit credit line with the Treasury Department as it did in 1993.
Sales of new one-family homes increased 9.6% in July (plus or minus 13.4%) over June figures but 13.4% below July 2008 figures (plus or 12.9%). The plus or minus figures leave a don’t add up to anything but confusion and doubtful significance.
On a truly positive note, August figures show an increase of 4.9% for durable goods over July, and upward swing for three out of the past four months.
Who’s to say our economic future is anything other than what is portrayed by the wooly bullies on Wall Street? Anybody?
Thursday, July 9, 2009
Obama, Sally and Stimulus Attitudes
Sally Rae has an attitude. In but the fewest of words there was a flare of disgust and a tinge of anger about the overindulgence homeowners had exercised during the sublime years of sub-prime loans and second-mortgage frenzies.
Although typically calm, cool and in control, Sally’s uncomely attitude was spurred by the Making Homes Affordable Plan. She grumbled for a moment but, quicker than Obama can swat a fly on the back of his hand, her demeanor returned to the sweet, charming little lady she is.
The Home Affordable Refinance Program targets 4 to 5 million homeowners with loans owned or guaranteed by Fannie Mae or Freddie Mac to lower their monthly payments. The Home Affordable Modification Program aims to keep an additional 3 to 4 million Americans from facing foreclosure.
The $75B allocated to the programs intends to lower interests rates to as low as 2% and/or give loan extensions up to 40 years – anything to bring the payment below 31% of pretax income, thus stemming the flow of bankruptcies and short-sales – but only applicable to owner-occupied, primary residences, not speculators or house-flippers, for up to $729,750 in unpaid balances. How sweet it is! For some, not all.
Sally has a problem with her tax dollars being given to irresponsible people who, with just a bit of common sense should have known the bottom-line monthly payment shown on the closing papers was unaffordable with their given incomes. An oversized house is nice to live in but when there’s a family to consider you not only have to plan for retirement but also consider college costs for the kids and, accept it or not, emergencies.
You can only blame lending practices so far because, in the end, it’s the person who signed the loan papers who are just as much at fault. Irresponsible indeed, dear sister, but I can top your angst with lenders who were too eager to give unsecured loans in the form of credit cards with little oversight of the individual’s ability of repayment.
A recent article in The NY Times related a cardholder who had been contacted by a lender that offered a 20% write-off on a $5,486 balance to which he declined but whose counter-offer of 50% was immediately accepted. An elderly gentleman who owed $112,00 on four credit cards, through a third-party settlement company that charged him a 12% fee, was able to reduce the balance to 35% of the outstanding balance, thus whittling down to 47% the outstanding balances.
In neither case was there a hint of them having to relinquish any of their assets. They had their cake and ate it too, and the rest of us are left with the crap that came out in the end – paying for the tasty morsels of their consumerism in the form of credit card companies jacking up interest rates much too quickly and all to often, even to those who continue to make on-time payments.
Obama’s Congress passed the Credit Card Act in May but the rule on 45 days advance notice of major changes won’t take affect until September and the majority of the new rules don’t apply until February next year. Consumers are of little concern compared to the demands of the corps or corporations.
The actions people took to enhance their immediate lifestyles were shameful. Whether by means of uncontrolled credit card usage or double-mortgage abuse, they set aside common sense for the good-time feeling of keeping up with other consumers who went on swanky spending sprees.
They beset themselves on the most difficult of futures with purchases of joyful trinkets like big screen TVs and monstrous vehicles that lose value the moment they’re taken off the showroom floor. Phantasmagoric vacations too, I’m sure.
There’s also the woman whose arrogance came out in full bloom when she bragged about the home equity loan she took, knowing the additional payment couldn’t be met. She pocketed the money. Despicably American.
The ones deserving of compassion, which doesn’t help them one bit, are those who became indebted due to health costs. I could make a wager and be fairly certain that, minus their conditions, their homes would still be secure investments, their stomachs less empty, their electric bills paid and they’d in be in much better off than the ones who pillaged their financial security for earthly pleasures.
Perhaps against Sally’s recommendation but in reader interest, particularly those faced with foreclosure, I suggest you visit www.financialsecurity.gov for information and www.makinghomeaffordable.gov to start the process that could ease your weary mind from the fears of losing your home. The entitlement was given by Obama. As far as other debt, call the number on the back of your credit card(s) and cry, “Fools!” You and them but the rest of us most of all.
Although typically calm, cool and in control, Sally’s uncomely attitude was spurred by the Making Homes Affordable Plan. She grumbled for a moment but, quicker than Obama can swat a fly on the back of his hand, her demeanor returned to the sweet, charming little lady she is.
The Home Affordable Refinance Program targets 4 to 5 million homeowners with loans owned or guaranteed by Fannie Mae or Freddie Mac to lower their monthly payments. The Home Affordable Modification Program aims to keep an additional 3 to 4 million Americans from facing foreclosure.
The $75B allocated to the programs intends to lower interests rates to as low as 2% and/or give loan extensions up to 40 years – anything to bring the payment below 31% of pretax income, thus stemming the flow of bankruptcies and short-sales – but only applicable to owner-occupied, primary residences, not speculators or house-flippers, for up to $729,750 in unpaid balances. How sweet it is! For some, not all.
Sally has a problem with her tax dollars being given to irresponsible people who, with just a bit of common sense should have known the bottom-line monthly payment shown on the closing papers was unaffordable with their given incomes. An oversized house is nice to live in but when there’s a family to consider you not only have to plan for retirement but also consider college costs for the kids and, accept it or not, emergencies.
You can only blame lending practices so far because, in the end, it’s the person who signed the loan papers who are just as much at fault. Irresponsible indeed, dear sister, but I can top your angst with lenders who were too eager to give unsecured loans in the form of credit cards with little oversight of the individual’s ability of repayment.
A recent article in The NY Times related a cardholder who had been contacted by a lender that offered a 20% write-off on a $5,486 balance to which he declined but whose counter-offer of 50% was immediately accepted. An elderly gentleman who owed $112,00 on four credit cards, through a third-party settlement company that charged him a 12% fee, was able to reduce the balance to 35% of the outstanding balance, thus whittling down to 47% the outstanding balances.
In neither case was there a hint of them having to relinquish any of their assets. They had their cake and ate it too, and the rest of us are left with the crap that came out in the end – paying for the tasty morsels of their consumerism in the form of credit card companies jacking up interest rates much too quickly and all to often, even to those who continue to make on-time payments.
Obama’s Congress passed the Credit Card Act in May but the rule on 45 days advance notice of major changes won’t take affect until September and the majority of the new rules don’t apply until February next year. Consumers are of little concern compared to the demands of the corps or corporations.
The actions people took to enhance their immediate lifestyles were shameful. Whether by means of uncontrolled credit card usage or double-mortgage abuse, they set aside common sense for the good-time feeling of keeping up with other consumers who went on swanky spending sprees.
They beset themselves on the most difficult of futures with purchases of joyful trinkets like big screen TVs and monstrous vehicles that lose value the moment they’re taken off the showroom floor. Phantasmagoric vacations too, I’m sure.
There’s also the woman whose arrogance came out in full bloom when she bragged about the home equity loan she took, knowing the additional payment couldn’t be met. She pocketed the money. Despicably American.
The ones deserving of compassion, which doesn’t help them one bit, are those who became indebted due to health costs. I could make a wager and be fairly certain that, minus their conditions, their homes would still be secure investments, their stomachs less empty, their electric bills paid and they’d in be in much better off than the ones who pillaged their financial security for earthly pleasures.
Perhaps against Sally’s recommendation but in reader interest, particularly those faced with foreclosure, I suggest you visit www.financialsecurity.gov for information and www.makinghomeaffordable.gov to start the process that could ease your weary mind from the fears of losing your home. The entitlement was given by Obama. As far as other debt, call the number on the back of your credit card(s) and cry, “Fools!” You and them but the rest of us most of all.
Sunday, February 1, 2009
TARP, ARRP and HARP
We Floridians are all too familiar with “tarp”, especially during summer months when hurricane force winds rip off shingles from rooftops and large sheets of the bright blue canvas are tacked over leaks to protect the inside of the home from additional damages. It takes weeks, even months, for an insurance company to assess the extent and dollar value of a loss.
Tarp is a makeshift remedy with no guarantee that there won’t still be scars on a structure, such as mold or mud-flooding, that aren’t covered by that hefty insurance premium. To make matters worse, if you’re like most people, your savings are pretty much nonexistent and your credit cards are maxed out and you don’t qualify for additional short-term loans. Tarp isn’t the answer to your troubles.
TARP (Troubled Assets Relief Program) has proven to be pretty much the same. The initial disbursement of the $700B government investment of taxpayer dollars was virtually wasted with the cash infusion to banks. The banking industry was given a blanket policy whereby their misdealing was covered by shoddy government workmanship.
The remaining $350B from TARP is being held in escrow with the Obama Administration in a quandary as to how to safely disburse the money without being snookered again by financial institutions. Instead of sparking up loans, banks want to be left alone to fan a smoke screen that will leave the economy smoldering for years and no assurance that in the end there won’t eventually be a raging firestorm of depressing proportions. This isn’t meant to discredit President Obama; it’s just a plain and simple belief that no one really knows what to do. It’s all guesswork.
Now we’re looking head-on at another program, ARRP (American Recovery and Reinvestment Plan), which is too much of a sound-alike to TARP. It’s not a bad omen though, with over $800B of funds to assist in resolving the somersaults of the worsening recession. Its effect on the economic meltdown isn’t likely to be enough to make an immediate difference to corporate or individual financial shortfalls.
For eight years, Democrats too easily played patsy to Bush politics. They had no backbone from the very start of the war in Iraq, doing their part to make billions of dollars available to keep the military ball rolling on foreign oil. Eventually, they tried to backtrack and admit it was a mistake but the alternative at the time was to confront a Republican-controlled Congress and be accused of being unpatriotic, even traitors.
To the very end, Democrats pledged taxpayer money by failing to properly earmark the initial $350B of TARP.
By the end of the Bush reign of errors, most Americans conceded Iraq was poorly planned and much too expensive. Heck, last year the Iraqi government had a surplus of $79B of what can be called as an American taxpayer relief fund. Iraq got a pretty darn good return on American monetary “investments” that cost us anywhere from $600B (Pentagon), $1T to $2T (Congressional Budget Office) or $3T (Joseph Stiglitz, Columbia University Professor, 2001 Nobel Prize in Economics, and 2007 Nobel Peace Prize). It’s kinda like what happened on the home front - trillions of dollars were lost to Wall Street.
The blame game is fairly pointless, although George “The Scourge” Bush is the primary culprit with his commandant-in-chief attitude, convincing every American that they too can become a homeowner. The resultant excesses of lackey lending institutions helped create the 10-digit budget deficit, a dollar figure that makes no sense.
And yet, Republicans in general are proving themselves to be afflicted with same-minded ideas with a rehash of the monetary policies of the past eight years. When the House passed the $819B stimulus package, Republicans in unison barked up the wrong money tree with their insistence that tax cuts and reduced spending would be an appropriate action to stimulate the economy. It was probably a token stance of solidarity – Senate Republicans will likely give passage to ARRP.
The National Republican Party is way out there in right field, no pitcher, no catcher, just a shortstop with Democrats hitting one left field hit after another. And yet, red and blue states alike are already making plans to spend their share of relief funds. Just how many friends (voters) do Republicans think they’ll make with such game plans?
Which leads me to suggest that any recovery package that Republicans might drum up would be labeled HARP (Hapless Anemic Republican Program). Let’s lay that idea to rest and canvas such a leaky premise with an oversized blanket of tarp.
Tarp is a makeshift remedy with no guarantee that there won’t still be scars on a structure, such as mold or mud-flooding, that aren’t covered by that hefty insurance premium. To make matters worse, if you’re like most people, your savings are pretty much nonexistent and your credit cards are maxed out and you don’t qualify for additional short-term loans. Tarp isn’t the answer to your troubles.
TARP (Troubled Assets Relief Program) has proven to be pretty much the same. The initial disbursement of the $700B government investment of taxpayer dollars was virtually wasted with the cash infusion to banks. The banking industry was given a blanket policy whereby their misdealing was covered by shoddy government workmanship.
The remaining $350B from TARP is being held in escrow with the Obama Administration in a quandary as to how to safely disburse the money without being snookered again by financial institutions. Instead of sparking up loans, banks want to be left alone to fan a smoke screen that will leave the economy smoldering for years and no assurance that in the end there won’t eventually be a raging firestorm of depressing proportions. This isn’t meant to discredit President Obama; it’s just a plain and simple belief that no one really knows what to do. It’s all guesswork.
Now we’re looking head-on at another program, ARRP (American Recovery and Reinvestment Plan), which is too much of a sound-alike to TARP. It’s not a bad omen though, with over $800B of funds to assist in resolving the somersaults of the worsening recession. Its effect on the economic meltdown isn’t likely to be enough to make an immediate difference to corporate or individual financial shortfalls.
For eight years, Democrats too easily played patsy to Bush politics. They had no backbone from the very start of the war in Iraq, doing their part to make billions of dollars available to keep the military ball rolling on foreign oil. Eventually, they tried to backtrack and admit it was a mistake but the alternative at the time was to confront a Republican-controlled Congress and be accused of being unpatriotic, even traitors.
To the very end, Democrats pledged taxpayer money by failing to properly earmark the initial $350B of TARP.
By the end of the Bush reign of errors, most Americans conceded Iraq was poorly planned and much too expensive. Heck, last year the Iraqi government had a surplus of $79B of what can be called as an American taxpayer relief fund. Iraq got a pretty darn good return on American monetary “investments” that cost us anywhere from $600B (Pentagon), $1T to $2T (Congressional Budget Office) or $3T (Joseph Stiglitz, Columbia University Professor, 2001 Nobel Prize in Economics, and 2007 Nobel Peace Prize). It’s kinda like what happened on the home front - trillions of dollars were lost to Wall Street.
The blame game is fairly pointless, although George “The Scourge” Bush is the primary culprit with his commandant-in-chief attitude, convincing every American that they too can become a homeowner. The resultant excesses of lackey lending institutions helped create the 10-digit budget deficit, a dollar figure that makes no sense.
And yet, Republicans in general are proving themselves to be afflicted with same-minded ideas with a rehash of the monetary policies of the past eight years. When the House passed the $819B stimulus package, Republicans in unison barked up the wrong money tree with their insistence that tax cuts and reduced spending would be an appropriate action to stimulate the economy. It was probably a token stance of solidarity – Senate Republicans will likely give passage to ARRP.
The National Republican Party is way out there in right field, no pitcher, no catcher, just a shortstop with Democrats hitting one left field hit after another. And yet, red and blue states alike are already making plans to spend their share of relief funds. Just how many friends (voters) do Republicans think they’ll make with such game plans?
Which leads me to suggest that any recovery package that Republicans might drum up would be labeled HARP (Hapless Anemic Republican Program). Let’s lay that idea to rest and canvas such a leaky premise with an oversized blanket of tarp.
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