The State of the Union

I watched President Obama's press conference with dismay last night. His response to a question about the trillions planned to be spent was that he inherited a large deficit from Bush. That was a somewhat accurate statement,but he forgot to mention Congress, both parties included. I cannot believe that one can solve a deficit problem with massive new spending. Blaming Bush for what the new administration is undertaking is incredulous.



When a business borrows money, it is investing in projects that will pay the cost of the borrowed amount as well as the principal. It weighs the risks and rewards and then usually goes to a bank who takes a second look at the purpose and signs off. Most often, the bank has the customer sign a document that insures the monies are properly spent and lays out a method of repayment.



If the above concept makes sense, then the spending that is on going and proposed should be prudent, have a positive cost benefit outcome, and safeguards to make sure the money is spent properly.



Lets review what has happened in the past 6 months spanning 2 administrations. The original "bailout" money had few safeguards or stipulations. I will give the Bush administration the benefit of the doubt, because, at the time, we were facing the risk of total financial meltdown. With that in mind, they agreed to only spend half and let Congress and the new Admin come up with a follow up plan that was supposed to be more specific and include more safeguards to insure compliance.



Even before the AIG got additional monies, there were complaints about sponsoring golf tournaments, baseball stadiums, etc. Many pundits are certain that in conference, the bonus exclusions were pulled from the document by the White House. President Obama was a recipient of PAC money from AIG while a Senator. What happened to this "new beginning and new way of doing business in Washington."



In the paper this morning, GAO reported that billions were lent to non existant or non qualified businesses over the past few years. SBA is going to be a recipient of stimulus dollars. In the new propsal, Detroit schools are going to get a new slug of money to improve their schools. The Detroit school system has had numerous issues with missing or misspent monies. Much of the state funds have few strings attached and there are new articles almost daily regarding some of the follies or questionable spending the states are going to undertake.



What we have hear is: To the tax paying public of the U.S.A., " We have a problem. We are going to throw a lot of money at it as well as simultaneously launch aggressive programs to change healthcare and energy consumption as we know it. Don't worry that we are going to double the deficit in around 3 to 5 years. Down the road the economy is going to grow at such a rate, we will actually bring down the deficit. Oh, by the way, the healthcare plan and the energy plan are going to be so successful, they will also cause the deficit to go down."



Wow, they are going to do all that yet offer NO SOLUTION to the Social Security deficit that is here now, and that threatens to undermine all citizens who are forced to be in this governement sanctioned Ponzi scheme. This doesn't give me a lot of confidence in them solving healthcare or energy consumption.

The irony is that these persons who are representing us in Washington as well as the bureaucrats have a gold plated benefits plan for retirement and healthcare. Most figure they will out of office or retiredwhen the problems come to roost. If they are still around, they will just blame the other party as the reason for the problem. I wonder how long they can blame Bush for all the problems in Washington.



The new argument is that the Republicans have no alternative. They slapped their plan together rather hastily. In fact, the stimulus package was so important that they didn't have time to let anyone look at it. What happened to transparency. Oh, it was too important and needed to be done NOW so we skipped the review process. Doesn't that remind you of the time that one of your children kept dogging you about wanting to do this or that or needing some purchase or they would just die. Most parents use patience and good sense to know that their "child" will eventually move on. Somebody in Washington has to be the parent.