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Wednesday, March 11, 2009

Why Obama is Ignoring The Financial Crisis

As long as the crisis continues, Obama feels free to push more socialist policies!

"Never let a serious crisis go to waste. What I mean by that is it's an opportunity to do things you couldn't do before." White House Chief of Staff Rahm Emanuel

Just about everybody, including many high fliers like Warren Buffett who were early supporters of Obama, wonder why he isn't focusing on solving the financial crisis first before pushing his socialist agenda of income redistribution, extreme environmentalism and the government takeover of health care.

The best indicator of Obama's lack of seriousness is the fact that Treasury Secretary Geithner has yet to put forward a detailed plan for restoring the banking system and hasn't even hired the deputies in his department that are key to managing a banking recovery. Is it that hard to find a financial expert who has paid their taxes? Meanwhile, Geithner has become the butt of jokes. Larry Johnson likened him to television character Doogie Howser and Saturday Night Live shows him taking economic advice from callers (video here).

Instead of tackling the most important problem first Obama has held a series of "summits" (otherwise known as campaign events) on fiscal responsibility (that's a laugh), health care and education while signing into law $TRILLIONS in new spending to address practically every issue but the most important one.

All the while Obama's White House responds to criticism by attacking Rush Limbaugh as if it's Rush's fault Obama's economic team remains incomplete.

Senate GOP Leader Mitch McConnell addressed these concerns in the context of Obama's budget proposal in a speech Wednesday on the Senate floor:

Speech Highlights of
Senator Mitch McConnell
The Senate Floor
March 11, 2008

‘Americans want the administration to fix the economy first. Unfortunately, the Budget avoids the issue entirely’

“We’ve all seen the numbers: unemployment is at a 25-year high. Millions are worried about holding onto their jobs and their homes. And with every passing day, Americans are waiting for the administration to offer its plan to fix the banking crisis that continues to paralyze the economy.

“Every day it seems, administration officials are unveiling one new plan after another on everything from education to healthcare. Meanwhile, the details of a banking plan —to address our main problem — have yet to emerge.

“We need reforms in healthcare and education and many other areas. But Americans want the administration to fix the economy first. Unfortunately, the Budget avoids the issue entirely.

“It simply assumes that this enormously complex problem will be fixed, and then proposes massive taxes, spending, and borrowing to finance a massive expansion of government. It assumes the best of times. And, as millions of Americans will attest, these are not the best of times.

“Over the next few weeks, the Senate will debate the details of this Budget. But one thing is already certain: it spends too much, it taxes too much, and it borrows too much. This Budget would be a stretch in boom times. In a time of hardship and uncertainty, it is exactly the wrong approach.

“The Budget’s $3.6 trillion price tag comes on top of a housing plan that went into effect last week that could cost a quarter of a trillion dollars, a financial bailout that could cost another $1 to $2 trillion, and a Stimulus bill that will cost, with interest, more than a trillion dollars. Some are now talking about another stimulus. The national debt is more than $10 trillion. And we just passed yesterday a $410 billion government spending bill that represented an increase in government spending over last year of twice the rate of inflation.

“In just 50 days, Congress has voted to spend about $1.2 trillion between the Stimulus and the Omnibus. To put that in perspective, that’s about $24 billion a day, or about $1 billion an hour—most of it borrowed. There’s simply no question: government spending has spun out of control.

“Given all this spending and debt, the cost of the Budget might not seem like much to some. But this is precisely the problem. To most people, it seems that lawmakers in Washington have lost the perspective of the taxpayer. It’s long past time we started to think about the long-term sustainability of our economy, about creating jobs and opportunity for future generations. That will require hard choices. The Omnibus bill avoided every one. And unfortunately, so does the Budget.

“Stuart Taylor, of the ‘National Journal’, recently praised the President in two consecutive columns. Yet he was shocked by the President’s Budget: Here’s what Taylor said about this Budget:

‘… Not to deny that the liberal wish list in Obama’s staggering $3.6 trillion budget would be wonderful if we had limitless resources,’ Mr. Taylor wrote. ‘But in the real world, it could put vast areas of the economy under permanent government mismanagement, kill millions of jobs, drive investors and employers overseas, and bankrupt the nation.’

“There is no question: in the midst of an economic crisis, this budget simply spends far too much.

“In order to pay for all this spending, this Budget anticipates a number of rosy scenarios. It doesn’t explain how the economic recovery will come about. It simply assumes that it will. It projects sustained growth beginning this year and continuing to grow 3.2 percent in 2010, 4 percent in 2010, and 4.6 percent in 2012. While I hope we return soon to this growth, we can’t promise the growth that we hope to have — especially when this growth is far from likely, particularly given a host of new policies proposals in the budget itself that are certain to tamp down growth even more.

“There’s no question this Budget spends too much.

“But even if this growth does occur, it would not be enough to support the spending proposals.

“And that’s why the budget calls for a massive tax hike.

“In fact, this budget calls for the largest tax increase in history — including a new energy tax that will be charged to every single American who turns on a light switch, drives a car, or buys groceries. Unless you’re living in a cave, this new energy tax will hit you like hammer. During the campaign, the President said his plan for an energy tax would “cause utility rates to skyrocket.” He was right: the new energy tax will cost every American household. I can’t imagine how increasing the average American’s annual tax bill will lift us out of the worst recession in decades.

“There’s more.

“A new tax related to charitable giving would punish the very organizations Americans depend on more and more during times of distress. One study suggests that the President’s new tax on charitable giving could cost U.S. charities and educational institutions up to $9 billion a year — money that will be presumably be redirected to the 250,000 new government workers the Budget is expected to create. There is no question this Budget taxes too much.

“Remarkably, the largest tax increase in history and a new energy tax still aren’t enough to pay for all the programs this Budget creates. To pay for everything else, we’ll have to borrow — a lot. This budget calls for the highest level of borrowing ever.

“Now, if there’s one thing Americans have learned the hard way over the past several months, it’s that spending more than you can afford has serious, sometimes tragic, consequences. Yet government doesn’t seem ready to face that reality — not when it’s spending other people’s money, and not when it’s borrowing from others to fund its policy dreams.

“It’s not fair to load future generations with trillions and trillions of dollars in debt at a moment when the economy is contracting, millions are losing jobs, and millions more are worried about losing homes. It’s time the government realized that it’s a steward of the people’s money, not the other way around, and that it has a responsibility not only to use tax dollars wisely, but to make sure the institutions of government are sustainable for generations to come.

“I don’t know anyone who would borrow money from people thousands of miles away for things they don’t even need. Yet this is precisely what our government is doing every day by asking countries like Saudi Arabia, Japan, and China to finance a colossal budget in the midst of an economic crisis.

“The administration has said it intends to be bold. And I have no doubt this budget reflects their honest attempt to implement what they believe to be the best prescription for success. We appreciate that effort. We simply see it a different way: a $3.6 trillion Budget that spends too much, taxes too much, and borrows too much in a time of economic hardship may be bold. The question is, is it wise? And most of the people who’ve taken the time to study this Budget have concluded that it isn’t. Republicans will spend the next few weeks explaining why that is to the American people.

“Americans want serious reforms. But in the midst of a deepening recession, they’re looking at all this spending, taxing, and borrowing and they’re wondering … They’re wondering whether, for the first time in our nation’s history, we’re actually giving up on the notion that if we work hard, then our children will live better lives and have greater opportunities than ourselves.

“Americans are looking at all this spending, taxing, and borrowing and they’re wondering whether we’re reversing the order — whether we’re beginning to say with our actions that we want everything now — and putting off the hard choices, once again, for future generations to make.

“That will be a most important question in this debate.”

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