Once again, a Washington Post reporter asks Team Obama how they are going to keep from wasting the hundreds of billions of "stimulus" dollars by spending it too fast and Team Obama replies that they are going to work hard to not spend it too slow:
Because they are intended to pump cash quickly into the economy, stimulus measures are released from the usual budgetary constraints that require the cost of new programs to be covered by cutting spending elsewhere or by raising taxes -- a one-time pass that could invite lawmakers to load the bill up with favored items.
[Larry] Summers and other Obama advisers said they are keenly aware of the problem and are working to convince lawmakers of the wisdom of limiting the package to projects that would create a large number of jobs quickly or make a down payment on Obama's broader economic goals, such as improving the health-care system or reducing emissions that contribute to global warming.
"While this may be Christmastime, it doesn't mean there's going to be a large number of unrelated ornaments under the Christmas tree," Summers said. "There's a commitment by all of us to discipline and to doing the right things in terms of accountability."
Summers said Obama's budget team is "scrubbing" various proposals for "basic soundness." The team also is developing ideas to make expenditures transparent to the public, perhaps through regular progress reports or even Internet sites where "people could monitor the fraction of each project that had been spent out," he said.
My published articles are archived at iSteve.com -- Steve Sailer
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22 comments:
1) The goal is to create (or "preserve") 3 million jobs. With $850 billion in new borrowing. That's $283,333 per job. Can I have one of those jobs?
2) Obama is covering his political ass by saying that his goal is to create or "preserve" 3 million jobs. If the US loses 20 million jobs next year Obama can say "but we woulda lost 23 million!"
3) Extending unemployment insurance is a dumb thing to do when there are still about 8 million or so jobs that "Americans won't do" being done by OTAs ("Other Than Americans"). The result will help the Democrats do something they desperately want to do: keep 15 million illegals in this country, breeding new Democrats (though not New Democrats). Oh, and he's going to expand H1B visas, too!!!
4) This is not 1932, Mr. President-elect. Americans aren't gunna tolerate another 10 year recession. Obama's plan looks like he's trying to essentially punt: throwing money around to look like he's responsible for the inevitable economic recovery, like a rooster credited with causing the sun to rise. Only this time the problem may require the sort of long-term fixes that Democrats especially aren't willing to do: like spending less money, fixing entitlements, and slowing immigration (low-skilled especially). If this thing drags on 2 years the Democrats are toast in 2010 and the memory may linger through 'til the 2012 elections.
"Spent out"? It's a way of making sure all the pork is handed out (overwhelmingly to blue states) before its effectiveness can be evaluated, before the economy recovers on its own, and before the Democrats possibly lose Congress in 2010.
It's an even larger sum of money than we're used to. Keep in mind that those $300 billion transportation bills are spread out over 5 years or so.
"...or make a down payment on Obama's broader economic goals, such as ... reducing emissions that contribute to global warming." --Wash. Post
Newsflash to Crew Obama: With the great deflation now going on, with the immense reduction in the shipping of raw materials, and with recession worldwide,"emmisions" have already been reduced everywhere. Get a clue.
"While this may be Christmastime, it doesn't mean there's going to be a large number of unrelated ornaments under the Christmas tree," Summers said.
Ornaments *under* the Christmas tree? WTF is Summers talking about? Got mixed up in his Gentile metaphors there, methinks. ;-)
I wish I could spend myself into prosperity.
The Shakedown Economy
New UAW rallying cry: "You might as well buy one of our overpriced clunkers, you're going to be paying us anyway."
New Unique Selling Point for desperate real estate agents: "You might as well buy a house, you're going to be paying for one anyway."
WELCOME TO THE BUSH-OBAMA KEYNESIAN NIGHTMARE!!
(those two guys are the frontmen........)
Steve: your friend Karl Denninger is really doing great work on these $$$ issues. Read Denninger and weep!
http://market-ticker.denninger.net/
For some reason he holds the discussion forum on a second web address called ticker-forum. The forum is filled with very good economic debate also.
Denninger's commentary the past few weeks basically predicts economic armageddon as a mathematical certainty unless drastic corrective action is taken quickly. But it looks like the required corrective action is the last thing that Obama has in mind.........
Obama's plan looks like he's trying to essentially punt: throwing money around to look like he's responsible for the inevitable economic recovery, like a rooster credited with causing the sun to rise.
Sounds like a pretty good plan to me. It's definitely what I would do if I were Obama.
Come on Steve-0, chastising a man with a family of four for driving a mid-sized American car seems a little...desperate.
To Jun:
The "ornaments under the Christmas Tree" metaphor is from an old Hillary Clinton For President commercial, in which she is shown simpering like a sick dog while giving Good Things wrapped as presents (nationalized health care, etc.) to the American people.Good grief. I thought Summers was supposed to be smart.
Sounds like a pretty good plan to me. It's definitely what I would do if I were Obama.
Yes, except that this crisis was precipitated by too damn much debt and government dogoodery. So let's take on another trillion and postpone the day of reckoning...
Steve,
this is just run-of-the-mill socialism. Yesterday I was reading an article about Helmut Schmidt who turned 90. He was the socialist Chancellor of Germany prior to Helmut Kohl, the buddy of Reagan and Bush I. The guy before Schmidt was Willi Brandt, a firebrand socialist with dubious loyalties brought down by a communist spy scandal. Government spending got out of control under his regime and was never brought under control again. Basically nowadays, by normal business standards, Germany is broke. The reason is that the socialists were handing out money and starting huge infrastructure projects in order to effectively buy the votes. This was possible initially because the conservatives under Adenauer and Ehrhard had piled up a huge surplus. But nowadays the money is gone so even socialists in Germany are careful about this type of spending.
I guess the US has no real experience with European type socialism so they confuse this Obama stuff with FDR. But Obama is European 60’s style socialism 2.0. And the pain will be felt starting 10 years from now.
this is just run-of-the-mill socialism. Yesterday I was reading an article about Helmut Schmidt who turned 90. He was the socialist Chancellor of Germany prior to Helmut Kohl, the buddy of Reagan and Bush I. The guy before Schmidt was Willi Brandt, a firebrand socialist with dubious loyalties brought down by a communist spy scandal. Government spending got out of control under his regime and was never brought under control again. Basically nowadays, by normal business standards, Germany is broke. The reason is that the socialists were handing out money and starting huge infrastructure projects in order to effectively buy the votes. This was possible initially because the conservatives under Adenauer and Ehrhard had piled up a huge surplus. But nowadays the money is gone so even socialists in Germany are careful about this type of spending.
I guess the US has no real experience with European type socialism so they confuse this Obama stuff with FDR. But Obama is European 60’s style socialism 2.0. And the pain will be felt starting 10 years from now.
why don't we create the "office of full employment" ??
the department could hire people to write memos to each other in tough economic times.
some people could proofread and edit, some deliver around offices (no email), some read and respond. depends on their skill level.
Jun beat me to it.
Presents go under the tree, Larry, and ornaments go on it.
The etymology of the word should've clued him in...
I am waiting for the bond vigilantes to show up. Why on earth would creditors continue to finance this government at the current pitifully low long term rates?
To both anonymouses (anonymi?):
1.) That's an excellent idea. The idea of the federal government as an employer of last resort is long overdue.. The only reason it hasn;t gained traction is because of outdated, gold-standard based thining about federal budgets that have no applicability in a floating currrency regime. See:
http://www.moslereconomics.com/mandatory-readings/full-employment-and-price-stability/
2.)Creditors will continue to finance the government at interest rate it chooses to pay, because a sovereign currency issuer does not "borrow" it's own money from anyone. Operationally, the government spends money into existance, destroys it by taxation, and supports a non-zero interest rate by exchanging non interest bearing liabilities (bank reserves or cash) for interest bearing ones (notes and bonds). The government could fulfill the latter role mcuh easier by simpley paying interest on overnight reserve deposits at the Fed, and ceasing to issue treasury securities at all.
Come on Steve-0, chastising a man with a family of four for driving a mid-sized American car seems a little...desperate.
Yes, two adults and two children, how to fit them into a sedan...is impossible
A Chrysler 300 is a sedan, Einstein.
A Chrysler 300 is a sedan, Einstein.
The first time I saw a 300 I thought, "that looks like a car a brotha would drive." The only two person I know personally who owns one is black. The only celebrity I know of (Obama) who drives one is black. It's the new pimpmobile.
First time I saw a Chrysler 300 I thought it was a Bentley. Im sure thats deliberate.
Because our debt is bought and sold in dollars, it's not so much the bond vigilantes you must fear, as the currency devaluation vigilantes or the global economic contraction vigilantes.
It would be nuts to default on our own debt, so that's nearly certain not to happen, and all investors know it. But if you're a German bank whose obligations are mostly in Euros, you really need to know that your reserves can be quickly turned into Euros at a reasonable rate. If the dollar starts falling against the Euro (or Yen, or Yuan, or whatever else), treasury rates will have to go up to attract any money from overseas, to cover the currency risk.
One thing hardly anyone gets: Our massive deficit and dependence on foreign investors to finance it imposes all kinds of constraints on our actions. We don't dare do anything that looks like it will screw over lots of foreign investors in treasuries, because if we do, our cost of financing the deficit will skyrocket, and we have no real hope of not running a deficit in the forseeable future.
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